Market Update 09/12-09/16

Here is this week's market update.  Rates are still VERY low, so it could be a great time to consider a refinance.  Some hot points first:

• Many lenders are capping the adjustments that can be made on any given rate.  That means the spread between owner occupied and investment properties is MUCH smaller.  This gives a great opportunity to fix a low rate for your rental
• Low or no equity in your home?  Might not be a problem!  We can still potentially lend up to 125% of your home's value if your loan is backed by Fannie Mae or Freddie Mac
• I can still close quickly, so if you or someone you know is buying a home and the lender hasn't offered a free float down in the past 2 weeks, give me a call!

Without further ado:

Market Comment
Mortgage bond prices were near unchanged last week, which kept mortgage interest rates relatively steady overall. Rates started off on a bad note the first portion of the week as equities rallied on news of a White House proposal to spend $300 to $400 billion for job creation. Fortunately the weekly jobless claims data Thursday came in higher than expected which reversed the earlier rate spikes. Stocks struggled Friday with some 100 points swings. Despite the volatility, mortgage bonds ended the week near unchanged.
The Treasury auctions this week will be watched carefully. If foreign demand falters rates could come under pressure. The inflation data Wednesday and Thursday may result in mortgage interest rate volatility.
LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
2-year Treasury Note Auction	Monday, Sept. 12, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Tuesday, Sept. 13, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Producer Price Index	Wednesday, Sept. 14, 8:30 am, et	Up 0.4%, Core up 0.2%	Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Retail Sales	Wednesday, Sept. 14, 8:30 am, et	Up 0.3%	Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
30-year Treasury Bond Auction	Wednesday, Sept. 14, 1:15 pm, et	None	Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims	Thursday, Sept. 15, 8:30 am, et	410k	Important. An indication of employment. Higher claims may result in lower rates.
Consumer Price Index	Thursday, Sept. 15, 8:30 am, et	Up 0.5%, Core up 0.2%	Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production	Thursday, Sept. 15, 9:15 am, et	Up 0.5%	Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization	Thursday, Sept. 15, 9:15 am, et	77.5%	Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Philadelphia Fed Survey	Thursday, Sept. 15, 10:00 am, et	4.0	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Sept. 16, 10:00 am, et	52	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Data

The abundance of fundamental data this week provides a good opportunity for mortgages to improve.  If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally.  However, if the data shows that the economy is rebounding any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.


Feel free to call me with any questions!

June Market Trends for Portland Area

Here are this month's market trends for the Portland Area.  We are currently working on getting more areas represented, so expect those to come soon

Four signs that your Housing Market is Recovering

Reposted from mint.com

The bad news just keeps piling up for homeowners. Home values, according to the most recent data from Zillow.com, dropped by 3% in the first quarter of 2011: the largest decline since the first quarter of 2008.

In fact, thanks to the decline in values in the first quarter this year, Zillow has pushed back its expectations for housing recovery. Previously, the company expected home values to bottom out by the end of this year. Now, it envisions that to happen in 2012, at the earliest.

But the news isn’t all bad: depending on where you live, you may be able to dig out of the hole sooner. You just need to follow several critical indicators that will give you an idea of where your real estate market is headed. (And you know that when it comes to real estate, it all depends on three things: location, location, location.) Here are four factors to watch.

1. Foreclosures in your area

Many parts of the country are still in the middle of a deep foreclosure crisis that floods the market with low-priced housing. But once the number of new foreclosures in a particular area starts slowing down and those homes get absorbed by deal-seeking buyers, homeowners can reasonably expect that the value of their properties will at the very least stop going down. Since the value of any given home derives in part from the sale price of similar homes nearby, after all, fewer or no foreclosed homes will help the values of all other properties in the area. Track foreclosure listings and trends through RealtyTrac.com.

2. Indicator cities

With any cyclical trend, including housing prices, certain areas inevitably see the impact earlier than others. San Francisco and Miami were two of the first markets to see house prices crash back in 2006 and 2007. As a general rule, the areas hit the earliest also tend to be the first to recover. Miami and San Francisco are doing just that, experiencing an upturn in home prices during first quarter 2011, according to a report by Calculated Risk Finance & Economics. Some of the later-hit areas like Arizona, on the other hand, will likely continue to see stormy weather for a while.

3. New home sales

New homes have always been a problem for people trying to sell their current houses. After all, why would a home buyer pick a used home when they can buy a new one in a better-groomed neighborhood? Real estate, like most markets, responds to supply and demand. As a result of the real estate crisis, the supply of new homes to the market since 2008 has slowed down considerably — though, of course, in foreclosure-flooded neighborhoods that doesn’t matter much. As soon as you see those foreclosed and new properties in your area start selling out, hope is near that your own home’s value will start recovering.

4. Interest rates

Many people in an upside-down mortgage fear that when their home values do finally rise, the interest rates will go up right along with them. If that happens, a new loan or an interest rate reset (if they have an ARM) might actually increase their mortgage payments — leaving them in the same tough situation they’ve lived with for years. Robert Ward of the Economic Intelligence Unit does not anticipate a significant rise in US interest rates during 2011 or 2012. This means advantageous interest rates are likely to still be available when home values reach a point that qualifies for refinancing — or putting your home on the market.

The relief boat hasn’t sailed yet

Gradually rising home values is good news for some, but for those caught with untenable mortgage payments it may be a case of too little, too late. Fortunately for those in that position, foreclosures are expensive for banks and bad for the economy at large. Credit and mortgage counselor Tony Saenz reports that private banks are continuing, and are expected to continue, to negotiate with home buyers and settle with lower interest rates and partial forgiveness of the principal on home loan