Mortgage Business

The Surging Dollar

February 24, 2015
In the past few months, we have focused upon many factors affecting the economy. These have included low oil prices and interest rates. The same international economic and political factors which have pushed rates and energy prices lower and contributed to volatility in the stock market, also have caused the U.S. Dollar to surge to levels not seen for years.

There are many positives associated with a stronger dollar. For one, our dollar is strong because our economy right now is stronger than many other countries, especially Europe. In addition, a stronger dollar makes imports and travel cheaper, which lowers the threat of inflation and helps keep our interests rates low. However, there is a negative side of a strong dollar. Because our exports become more expensive to foreign nations, it can slow our economy and cost us jobs.

Like everything in life, each economic factor creates balances. If our economy is stronger than others, the stronger dollar can bring it down a notch. Here is the good news. With low oil prices and interest rates, the consumer has a chance to be an economic star in 2015. The creation of more jobs and low rates could very well turn into great news for the real estate market in 2015 and thus offset the negative effects of a stronger dollar. Meanwhile, it is a good time to book a hotel room in Europe and many other places.


The Markets.  Fixed rates on home loans rose again in the past week. Freddie Mac announced that for the week ending February 19, 30-year fixed rates increased to 3.76% from 3.69% the week before. The average for 15-year loans rose to 3.05%. Adjustables were mixed, with the average for one-year adjustables up slightly to 2.45% and five-year adjustables unchanged at 2.97%. A year ago, 30-year fixed rates were at 4.33%, which continues to be more than 0.50% higher than today’s levels. Attributed to Len Kiefer, deputy chief economist, Freddie Mac — “Rates on home loans rose for the second consecutive week as 10-year Treasury yields surged. Housing starts declined 2 percent to a seasonally adjusted pace of 1.065 million units and housing permits dipped 0.7 percent in January. However, homebuilders remain confident about new home sales although slightly tempered from last month as the NAHB Housing Market Index slipped 2 points to 55 in February.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.  

Current Indices For Adjustable Rate Mortgages
Updated February 20, 2015
Daily Value Monthly Value
February 19 January
6-month Treasury Security  0.07%  0.08%
1-year Treasury Security  0.23%  0.20%
3-year Treasury Security  1.05%  0.90%
5-year Treasury Security  1.58%  1.37%
10-year Treasury Security  2.11%  1.88%
12-month LIBOR  0.622% (Jan)
12-month MTA  0.128% (Jan)
11th District Cost of Funds  0.692% (Dec)
Prime Rate  3.25%

Adding in rental history to a credit score could make all the difference for potential homeowners. Experian published an analysis on almost 20,000 people in government-subsidized housing who pay their monthly rent on time. The survey found that before adding in rental history, 11% of the same had no credit file at all, which makes it extremely hard to get loans. However, once the rental history was included, 59% of that group had prime credit scores, and another 38% had “nonprime” scores, while only 3% were considered subprime. It was previously reported that lenders might start considering rent payment history in credit scores. In the current system, years of monthly payments to landlords do not show up on credit-bureau files. Two of the national bureaus — Experian and TransUnion — have begun incorporating verified rental-payment data into credit files where it can be included in the computation of consumers’ scores when they apply for a home loan. Source: Businessweek

About 800,000 families across the country could benefit from the Home Affordable Refinance Program by lowering their monthly housing payments, but fear is keeping them away from the program, said Mel Watt, director of the Federal Housing Finance Agency, in remarks recently. “HARP is designed to reward those borrowers who are the most committed in this country,” Watt said. “This is not a scam.” The FHFA estimates that eligible borrowers could save nearly $2,300 per year on their monthly payments with HARP. But Watt said too many borrowers are still not taking advantage of the program. Watt indicated that “we know that there are hundreds of thousands of borrowers who can still benefit from the Home Affordable Refinance Program and are essentially leaving money on the table by not taking advantage of the program.” To date, 3.1 million home loans have been refinanced through HARP. Watt said he hopes the public campaign that FHFA is launching will help more borrowers take part in HARP. “By engaging directly with local community leaders, faith-based organizations, local elected officials, and lenders, our goal is to leverage these trusted sources to reach as many ‘in-the-money’ borrowers as we can,” Watt said. Source: HousingWire

Home staging can influence buyers’ perceptions of a home and even motivate them to pay more, according to the National Association of Realtors®’ 2015 Profile of Home Staging, a survey of more than 2,300 Realtors® representing buyers and sellers. Eighty-one percent who represent buyers say that staged homes make it easier for their home buyers to visualize a property as their future home. Forty-six percent of buyer agents also reported that staging makes their buyers more willing to tour a home they viewed online, and 45 percent say that buyers tend to view the value of the home more positively if it is decorated to buyers’ tastes. Twenty-eight percent of agents said their buyers are even more willing to overlook other property faults if a home is staged, according to NAR’s survey. Buyer agents also say that staging can potentially influence how much their buyers are willing to offer for a home. According to the survey, thirty-two percent of buyer agents surveyed say that staged homes increase the dollar value buyers are willing to offer for a home by 1 percent to 5 percent; 16 percent said it could increase offers by 6 percent to 10 percent. Forty-four percent of seller agents say they only suggest that sellers declutter and fix property faults, and they do not recommend that their clients should professionally stage the home. Source: NAR

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