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George Matthews, CPA and owner of A1 Mortgage, has been providing professional services for over two decades to a wide variety of clients ranging from the self-employed to employees in both private and public industry.
Call 410.599.9700 to see how A1 Mortgage can help you today.
Archived Articles
July 19, 2010
Foreclosure Rates Fall Again:
U.S. foreclosure rates fell for the third straight month according to RealtyTrac's new report. New foreclosure fillings in June dropped 2.81 percent from the previous month and 6.98 percent from the previous year.
While foreclosure rates are falling, they are still at high levels with 16 straight months of readings of over 300,000. Still 410 out of every 411 homes are not in foreclosure, so there is still some strength in the housing market.
Consumer Prices Continue to Fall:
Consumer Prices fell for the third straight month, providing bargains for American Shoppers.
The Consumer Price Index, the government's most closely watched inflation barometer, dipped 0.1 percent in June, according to the Labor Department. Less expensive energy bills were a big factor behind the drop. Prices for food items and airline fares also dropped last month. Also, "core" consumer prices are holding near a 44 year low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +44 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the back of some weaker than expected economic data. Manufacturing Data, Consumer Price Index and Consumer Sentiment all were much worse than market expectations. Economic concerns helped to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
July 12, 2010
Why are so many people listing their houses now?
Once the tax credit expired (new contracts had to signed by April 30th) everyone expected that listings would go down. But they haven't...they have gone up. With all of the negative media attention on housing it would be easy to consider that it is because the sellers are distressed in some way. Maybe they lost their job or they are trying to sell the home before it goes into foreclosure.
But here is the real reason why listings are up: Interest rates are at an all-time low. Despite the constant bombardment of negative media coverage, the vast majority of existing homeowners are very credit worthy, live within their means and have stable income. Experienced homeowners have seen interest rates in the 5's, 6's, and 7's in the last several years. And those that have owned homes for longer have seen double-digit interest rates. So, they know that when interest rates are at an all time low - it is time to make a move.
The idea is that if they were ever going to move to a different school district, move up or down in size, etc. now is the time to do it. Sure, they might get a little less for their house this year compared to what they might sell it for a couple of years down the road but that is more than offset by the huge savings in mortgage and interest payments.
This means that homebuyers also have attractive interest rates which is another good time to sell, because more people buy when interest rates are low. Buyers are a little slower to "pull the trigger" on a sales contract because there is moderate amount of inventory around. But many of these potential homebuyers already missed out on the tax credit window because they thought the government would keep extending it or maybe they just weren't ready to enter the market yet. Regardless that window of opportunity has shut. Don't miss this even bigger window of opportunity!
Mortgage rates can make a right turn at any second. Mortgage rates are not low because of anything that the Federal Reserve, Treasury, or Obama administration is currently doing. Mortgage rates are low because of global fear about the economy and financial system. This causes banks and investors to hoard their cash and park it into nice, safe and boring mortgage backed securities. You earn a very low interest rate in return for safety. But the financial markets and the global economy will turn around, and when it does it will move mortgage rates up with it.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +19 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on fears of a U.S. double-dip recession. Economic concerns help to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
June 28, 2010
Mortgage Rates Drop to Record Low:
30 year fixed mortgage rates dropped to their lowest levels in 39 years according to a new survey released by Freddie Mac, the second largest mortgage finance company.
Interest rates on 15 year fixed rates and hybrid adjustable rate mortgage rates reached fresh lows as well. While record low rates and high housing affordability helped the housing market gain ground over the last year, the sector is struggling since the popular home buyer tax credit expired on April 30th.
According to a Freddie Mac survey, the average 30 year fixed rate for conventional (non-FHA and VA) mortgages averaged 4.69 percent for the week ended June 24th and is the lowest since Freddie Mac started the survey in April 1971. Still, Freddie Mac's data is at least a week old before they publish it and it has been another week since then. Rates do vary depending on credit, debt ratios, down payment, area of the country, property type, points paid and many more factors.
GDP, Economy Grow at Slower Pace in 1st Quarter:
U.S. economic growth was slower than previously estimated in the first quarter of 2010. In its final estimate, the Commerce Department said the Gross Domestic Product (GDP) expanded at a 2.7% annual rate instead of the 3% pace it reported last month. Although the growth pace was below market expectations it still marked three straight quarters of of expansion as our economy digs out of its most brutal downturn since the 1930s. The Federal Reserve left their key interest rates unchanged this week and struck a cautious note on the economy and said that the recovery was "preceding" and that the economy is not expected to to fall back into a recession. Fears of a "double-dip" recession is one of the factors that have kept mortgage rates so low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +62 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the heals of a a slow down in existing and new home sales and a downward revision in our GDP.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
June 14, 2010
Tax Credits May See Extension:
The home buyer's tax credit has been wildly popular. It gave both first time and previous home buyers a sizeable tax credit provided that they sign a purchase contract no later than the end of April and close no later than the end of June.
It was so successful, that pending home sales (contracts signed but not yet closed) rose 22.4% when compared to April 2009. However, with increased underwriting turn times, many people that met the requirement by signing a contract before the end of April will not be able to close in time. Under the current law, they would lose their tax credit.
Senator Harry Reid is offering an amendment to the American Jobs and Closing Tax Loopholes Act of 2010 that would extend the closing time from June 30th to September 30th. Note: If you did not sign a contract by April 30th then there is no extension for you. It is only for those that signed a contract in time but just can't close on time. It remains to be seen if his proposal will pass, I will keep you posted.
Consumer Confidence Reaches a High Point:
According to a newly released report by Reuters/University of Michigan, their Consumer Confidence index rose again to a reading of 75.5. This is the best reading this year and the best reading since January 2008.
It shows a picture that consumers are more confident in how they perceive their economic outlook. A higher consumer confidence number generally signifies that consumers are more willing to spend. This is important because consumer confidence is one of the largest factors in home demand.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -35 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. We did have a large swing in the middle of the week that helped us to reach another new low in mortgage rates. But we very quickly gave up those gains to close down for the week.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
June 7, 2010
Pending Home Sales Surge:
A pending home sale is simply a signed contract on a home that has not yet closed. The National Association of Realtors reported that we continued to see gains in home sales for the third consecutive month. The index rose 6.0% last month and 22.4% when compared to April 2009. The April increase follows a 7.1% in March and a 8.3% increase in February.
While certainly some of the gain can be attributed to the rush to get a contract signed prior to the end of the tax credit, there is definitely underlying demand as consistently low rates and increased consumer confidence in the housing market has helped to drive up demand for homes.
Unemployment Rate Drops:
The Labor Department reported that our nation's unemployment rate dropped from 9.9% to 9.7%.
Non-farm payrolls increases 431,000 in May. However, 390,000 new hires were due to the wave of census hiring. That means that only 41,000 private sector jobs were created. While this is an improvement, it was certainly much less than market expectations and a further sign that our recovery isn't as hot as once believed.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +69 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans and pushed mortgage rates to match the year's best levels. The better mortgage rates were due to very mild economic data and continued concern over debt and banking issues in the European Union.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
June 1, 2010
New Home Sales at 2-Year High:
The Commerce Department reported that sales of newly built homes rose much faster than expected in April, rising to their highest levels in nearly two years. Sales jumped 14.8 percent (month-over-month) to an annualized rate of 504,000 units in April. This is the highest rate since May of 2008.
The year-over-year increase was in excess of 22 percent. Certainly, the rush to sign a contract prior to the tax credit expiring has had an impact. But there is something else that it less temporary that is also having an impact. Consistently low 30 year fixed rates, an increase in consumer confidence, and a rise in non-farm payrolls are helping to fuel demand for housing. And unlike the tax credit, these items will not expire but continue to move upward.
The report also showed that inventories of new homes for sale fell a record seven percent to 211,000 units in April. That is the lowest level of inventories since October 1968! Lower inventories will eventually lead to further price stabilization.
Consumer Sentiment Rises:
The Thomson Reuters/University of Michigan's report showed that consumer sentiment rose again in May. The final May reading on the overall index was 73.6, up from April's reading of 72.2.
Consumer Spending drives 70 percent of our economy, so an increase in consumer sentiment readings could be good for economic growth in the near-term. Also, both consumer sentiment and consumer confidence are significant drivers for housing demand. Simply put, consumers are more likely to purchase a home if they feel more confident about their own financial outlook.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -69 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. The prior week, they were at their best levels of 2010. MBS pricing decreased (which causes mortgage rates to go up) due primarily to a rebound in the stock markets which pulled some money way from bonds. We also saw some strong economic data such as the Chicago PMI, Consumer Sentiment and Initial Jobless Claims. As the economy shows sign of expansion, it takes a toll on long bonds such as mortgage backed securities. However, mortgage rates remained at fantastic levels.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
May 17th, 2010
Foreclosure Rates Fall:
The most recent sign of growth in the housing industry comes from a new report released by RealtyTrac. They reported that foreclosures in the U.S. fell by more than 2% in April from a year earlier. The great news is that this is the very first year-over-year decline since the housing crisis began.
RealtyTrac's index fell 9% from March 2010 to April 2010 and 2.4% from April 2009 to April 2010. This data shows that the foreclosure situation is slowing and may have already hit a plateau. Currently, 1 out of 387 homes are in foreclosure. That means that 386 out of 387 homes are not in foreclosure!
Consumer Sentiment Strong:
The University of Michigan's Consumer Sentiment Index rose to its best levels since our Recession began. This is very important because housing demand is very clearly tied with how consumers feel about economic conditions and their own financial outlook.
Consumer Sentiment rose to 73.3 in May, up from the April reading of 72.2. Buried within this report were two other nuggets: The survey showed that the consumer inflation expectation index rose to 3.1% which is the highest reading since June of 2009. Inflation naturally causes mortgage rates to increase, so we need to keep an eye on this.
The survey's gauge of current economic conditions edged upward to a very high 81.1 and the barometer of consumer expectations also rose in May to 68.3.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +7 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans to their best levels of 2010. MBS pricing increased (which causes mortgage rates to go down) due primarily to Greece. Although there is over $1 trillion that has been made available through loans by the IMF, the European Union, and individual countries in the EU, most economists are skeptical that it is enough to stem the tide. The global uncertainty causes investors to park their money into U.S. treasuries and MBS. This artificial (and temporary) demand helped to push mortgage rates down after a very volatile week.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
May 10th, 2010
Pending Home Sales Rise 21.1%:
Pending sales of previously owned homes from March of 2009 to March of 2010 rose 21.1%, showing continued strength in the housing market.
The National Association of Realtors said its Pending Home Sales Index, which is based upon contracts signed in March, increased 5.3% on a monthly basis - building on the prior month's revised rise of 8.3%.
It is clear that we have seen a steady increase in housing demand. Now is the time to start to seriously consider buying now before prices start to accelerate.
Payrolls Increase Again:
The Labor Department reported that Non-Farm Payrolls increased by 290,000. This is the second consecutive week where our economy has added jobs. Plus, they revised March's numbers from 162,000 all the way up to 230,000.
Hiring for the census accounted for 66,000 of the new jobs. If you subtract the jobs added by the federal government, we can see that the private sector accounted for 224,000 new jobs. This shows that our economy is adding jobs. This is the largest increase since March of 2006. This is very important because housing is not about location, location, location. It is about jobs, jobs, and jobs!
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +81 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans to their best levels since March. MBS pricing increased (which causes mortgage rates to go down) due primarily to Greece. Yes, Greece. With concern about their looming default on their sovereign debt and the subsequent "domino affect" all across Europe, money flew into U.S. treasuries and MBS. This artificial (and temporary) demand helped to push mortgage rates down.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
April 26th, 2010
Home Sales Surge:
Two new reports were released that showed a strong surge in home sales. Existing Home Sales rose more than expected in March, reversing three months of declines. Kicking off what is expected to be a strong Spring selling session.
The National Association of Realtors reported that sales of previously occupied homes rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million units. This is the highest level since December. The nationwide median home price was slightly higher than a year earlier at $170,700.
In a separate report, the Commerce Department said new home sales surged higher by 27%. They reported that new home sales rose in March to an annualized rate of 411,000 units. It was the strongest month since last July and the biggest monthly increase in 47 years.
More Economic Growth:
Initial Jobless Claims fell for the first time in three weeks as new filings for state unemployment benefits dropped 24,000. Many market analysts expect that we will continue to see improvement in the labor market over the coming weeks.
Durable Goods Orders (long-lasting U.S. manufactured goods - for example: an oven) moved upward sharply. Orders for items (excluding transportation and defense) jumped 2.8% last month. This is the largest rise since December 2007. This coincides with the very strong manufacturing data that we have been seeing. This shows that personal and business consumption is on the rise and is very good news for the economy.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -40 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans to their highest levels in two weeks. MBS pricing decreased (which causes mortgage rates to rise) due to strong economic data such as Initial Jobless Claims, very strong housing data, and Durable Goods Orders. Positive economic news is great for consumers but long term bonds such as mortgage backed securities react negatively due to the increased potential of inflation.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
April 19th, 2010
New Housing Index Reaches Best Level in 2 Years:
The National Association of Home Builders announced that their Housing Market Index which measures builder's sentiment and outlook for the industry jumped 5 points in April to a reading of 19. This is the highest reading in 24 months. The survey of 417 residential developers also showed that foot traffic from prospective buyers rose 4 points.
In a separate report, nationwide housing starts rose for the third consecutive month to a seasonally adjusted 626,000 units according to the U.S. Commerce Department. Requests for new housing permits also rose. They increased to an annual rate of 685,000 units.
Federal Reserve Report Shows Economic Strength:
The Federal Reserve released their Beige Book last week. This report (named for the color of its binder) showed that "economic activity increased somewhat" in 11 out of 12 federal districts.
The results of the Fed's new survey is consistent with chairman Ben Bernanke's view that a modest recovery is unfolding, although it won't be strong enough to materially drive down unemployment rates for some time.
The new survey suggested that consumers, whose spending accounts for 70 percent of national activity, are doing their part to keep the recovery going. Retailers in most parts of the country reported sales increases and merchants were "cautiously optimistic regarding future sales".
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +44 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. MBS pricing improved due to a weak Consumer Sentiment report, a jump in Initial Weekly Jobless Claims, continued concern over Greece's solvency and a massive market shake-up that resulted from the new Goldman-Sachs charges.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
April 12th, 2010
Most Americans Say Now Is The Time To Buy:
A new Fannie Mae survey showed that nearly two-thirds of Americans think the time is right to buy a house, with a majority believing prices will be the same or higher over the next year.
The 64 percent that said it is a good time buy is just shy of the 66 percent that said the same thing back in 2003 as the U.S. housing market was racing higher, said the survey.
In a separate report, Pending Home Sales rose sharply in February. The National Association of Realtors reported that contracts for pending sales of previously owned homes rose 8.2 percent. First-time home buyers need to sign a contract before the end of April and close the transaction before the end of June to be eligible for the $8,000 tax credit. Clearly, there is a rush to take advantage of this with many Realtors reporting multiple offers on a single home. Buyers who are selling a home and purchasing a different one are eligible for a $6,500 tax credit.
Subprime Delinquencies Fall For First Time In 4 Years:
Subprime mortgages are simply loans that did meet Fannie Mae, Freddie Mac, FHA, or VA standards. The massive onslaught of subprime delinquencies was one of the main culprits in our housing slump. So it is great news that for the first time in 44 months, delinquencies bucked their trend and actually improved to the best levels in 2 years.
With Unemployment decreasing, delinquencies falling and home prices increasing, this could shape up to be a much better Spring/Summer housing market than last year.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +88 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans, but rates are still higher than two weeks ago which is a level that we are unlikely to see again this year.
We benefited from a strong 10 year Treasury auction, weaker Initial Jobless Claims, and global concern over Greece.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
April 5th, 2010
Vacation Home Sales Rebound
When the housing market started to head in the wrong direction, vacation homes led the way. Since they were not the borrower's primary residence, these properties were dumped on to the market first. So, it is great news that we can now see a reversal in that trend.
The National Association of Realtors reported that vacation home sales jumped 7.9 percent from 2008 to 2009 in their 2010 Investment and Vacation Home Buyers Survey. The big news is that 90% of the vacation home purchasers were buying the property as a true vacation home and not for investment purchases. Previously, wild speculative buying of vacation properties for the purpose of selling it again in the future was a large reason for the collaspe in that market segment.
Additionally, 70% of the purchases were for single-unit non-attached structures. The median transaction price increased from $150,000 a year ago to $169,000.
Positive Job Growth
Friday's Unemployment Rate was unchanged at 9.7% for the third month in a row. But we did have some very exciting news within that report: For the first time since the financial crisis began, we experienced Job Creation!
Yes, Non-Farm Payrolls increased for the first time as we added 164,000 new net jobs. This shows that private sector job creation is underway which is what will continue to lead us into stronger demand for housing. As people return to work, consumer confidence naturally rises and helps to stimulate demand for housing.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -103 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. Our worst mortgage rates were on Friday after the release of the Unemployment Report which showed positive job creation for the first time and pressured mortgage rates. We also felt the sting of the Federal Reserve ending their $1.25 trillion mortgage backed securities purchase program. This removed the single largest purchaser of MBS from the market place.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
March 29, 2010
February Existing Home Sales
Beat Forecasts
The National Association of Realtors released their report of the sales of previously owned homes. Compared to a year ago, Existing Home Sales increased an impressive 7.0 percent. At 5.02 million units, they beat the market expectations of 5.0 million units. Month over month sales decreased 0.6 percent.
Other interesting news from the report: First time home buyers made up 42 percent of sales and all-cash purchases accounted for 26 percent. The sector that had been hit the hardest, condominiums and co-ops actually rose 4.8 percent - finally showing some demand in that sector.
Positive Economic News Pressures Rates
The U.S. Census Bureau reported that Durable Goods Orders (excluding the volatile transportation sector) increased by 0.9 percent. This was a 120 percent increase from the prior period. As orders for Durable Goods increase, it leads to substantial capital investment and is a precursor to stronger economic growth.
Initial Jobless Claims fell for the fourth consecutive week and came in below an important level. They finally broke through the 450,000 level at 442,000. All eyes will be on the Friday release of the Unemployment data. Many economists feel that we have the potential to see actual job creation in the non-farm payroll sector.
Mortgage rates naturally rise when the economy expands. Since the economic data above was positive it helped to push mortgage rates higher.
Warning: The Federal Reserve Bank of New York will end their $1.25 trillion Agency mortgage backed security purchase program this Wednesday! This will remove the single largest purchaser of Fannie, Freddie, and Ginnie mortgage backed securities in the market. How will this impact rates? Contact me and I will keep you in the loop - but this will certainly lead to some volatility this week.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -62 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. Our worst mortgage rates were on Wednesday after we dropped -90 basis points in just one day. We saw further erosion on Thursday but made a small come back on Friday.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
March 22, 2010
Housing Starts Beat Forecasts
Two key indicators of new construction beat economists forecasts. New Housing starts were reported at an annualized rate of 575,000 vs. market expectations of 570,000. The month-over-month comparisons showed a drop of 5.9 percent.
New Building permits came in at 612,000 units vs. market expectations of 610,000 although they did decrease 1.9 percent from the previous month.
What is important is that we are not seeing a spike in new housing activity. This is great for housing markets that still have too much inventory to work through. By not adding to the existing inventory by building new homes, this helps to stabilize pricing.
Initial Jobless Claims Fall Again
Weekly Initial Jobless Claims fell for the third consecutive week. Initial Claims fell 5,000 compared to the period week, which makes a drop of 41,000 new claims for unemployment benefits over the past three weeks.
In a separate report, the Consumer Price Index (CPI) remained unchanged from the prior month. This is important as a rise in CPI will decrease the purchasing power of consumers. And any decrease in purchasing power could have an impact on housing. So, for now, this is seen as a positive for housing.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) lost -4 basis points last week which caused 30 year fixed rates to increase slightly for both government and conventional loans. Our best mortgage rates were on Wednesday but closed the week out on a bad note as Friday saw our highest mortgage rates. Make sure you call me for the real story on mortgage rate movements.
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
February 1, 2010
US Economy Points to
Good Housing Market
We have had very strong housing markets with 30 year fixed mortgage rates in the 7's and very poor housing markets with mortgage rates below 5. Regardless of interest rates, tax credits, or home prices, the number one factor that determines the level of demand for housing is Consumer Confidence. When consumers feel good about their future they are simply more likely to purchase a home.
So, it is great news when the Reuters/University of Michigan's Consumer Confidence readings hit their best levels since January 2008. The reading was 74.4 and showed "that consumers are convinced that the worst is over".
Consumers are not alone in their sentiment. The GDP for the 4th quarter was just released and it showed that our economy grew at a blistering rate of 5.7%. Which was more than double the 3rd quarter level of 2.2%. This was the best GDP numbers in more than six years.
What Happened to Rates Last Week?
Mortgage backed Securities rose +29BPS last week helping to lower 30 year fixed mortgage rates slightly. We saw our best rates on Tuesday but quickly lost -46BPS from our best pricing levels by the end of the week..
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
January 24, 2010
US Housing Starts Decline - Good For Housing
Starts of new homes have dropped well beyond expectations in December. New home starts have dropped 4.0% in December to a seasonally adjusted rate of 557,000 units per year. A much sharper decline than the 0.2% drop expected by industry experts. However, building permits have increased by 10.9%.
So why is this "good" news for housing? Because this helps to keep inventory levels in check and to help bring a balance between buyers and sellers. With too much inventory (which only increases with each new home built) the balance is tipped towards the buyers. With very low mortgage rates, tax credits, and a leveling of the inventory levels, this is helping to stabilize our market.
What Happened to Rates Last Week?
Mortgage backed Securities rose +29BPS last week helping to lower 30 year fixed mortgage rates slightly. We saw our best rates on Tuesday but quickly lost -46BPS from our best pricing levels by the end of the week..
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
January 11, 2010
Pending Home Sales Increase
The National Association of Realtors said its Pending Home Sales Index, based upon contracts signed in November increased 15.5% from November 2008 to November 2009.
The year-over-year increase shows a long-term pattern of continued stability in housing demand despite monthly volatility. November 2009 to October 2009 saw a drop in the index of 16%.
In a separate report, the Commerce Department showed that new orders at U.S. factories rose 1.1 percent in November. The financial markets had expected a loss of -.3%. This is the third straight monthly increase in factory orders. This is yet another sign that our economy has already turned towards growth and should be another factor in helping the housing industry
What Happened to Rates Last Week?
Mortgage backed Securities rose +29BPS last week helping to lower 30 year fixed mortgage rates slightly. We saw our best rates on Tuesday but quickly lost -46BPS from our best pricing levels by the end of the week..
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
January 3, 2010
Home Prices Rise for Second Straight Quarter
Freddie Mac reported that its Conventional Mortgage Home Price Index (CMHPI) registered a 0.9 percent quarterly gain during the third quarter of 2009. That follows a 2.0 percent gain in the second quarter and marking the second consecutive quarter of home price increases.
Additionally, they stated that sales volume was up 15 percent between the first and third quarters of this year. This further demonstrates that the housing market has already turned.
Call me today so I can help you to take advantage of this market before the good deals are gone.
What Happened to Rates Last Week?
Agency (Fannie Mae and Freddie Mac) mortgage backed securities lost 69 basis points last week. This is important because conventional 30 year fixed rates are based upon the sale of these agency’s mortgage backed securities. This caused 30 year fixed interest rates to rise to their highest levels in the last 30 days. The market was reacting to a very mild Initial Jobless Claims report and a very strong Retail Sales report. Remember, that as we get some economic growth, it will pressure mortgage rates slightly higher.
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
December 22, 2009
Foreclosure Rate Dips
The nation’s foreclosure rate fell last month to its lowest level since February according to new data. A total of 306,627 Americans received a foreclosure notice in November which is an 8 percent decrease from October.
That means that 416 out of every 417 housing units is not in foreclosure. Our housing market has stabilized in the past 12 months. One of the reasons for these great home prices is the flood of artificially low fire-sales prices on foreclosed homes. With foreclosures leveling out this will help home pricing gain some traction.
What Happened to Rates Last Week?
Agency (Fannie Mae and Freddie Mac) mortgage backed securities lost 9 basis points last week. This is important because conventional 30 year fixed rates are based upon the sale of these agency’s mortgage backed securities. This caused 30 year fixed interest rates to rise slightly last week..
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
December 17, 2009
Home Prices Rise for Second Straight Quarter
Freddie Mac reported that its Conventional Mortgage Home Price Index (CMHPI) registered a 0.9 percent quarterly gain during the third quarter of 2009. That follows a 2.0 percent gain in the second quarter and marking the second consecutive quarter of home price increases.
Additionally, they stated that sales volume was up 15 percent between the first and third quarters of this year. This further demonstrates that the housing market has already turned.
Call me today so I can help you to take advantage of this market before the good deals are gone.
What Happened to Rates Last Week?
Agency (Fannie Mae and Freddie Mac) mortgage backed securities lost 69 basis points last week. This is important because conventional 30 year fixed rates are based upon the sale of these agency’s mortgage backed securities. This caused 30 year fixed interest rates to rise to their highest levels in the last 30 days. The market was reacting to a very mild Initial Jobless Claims report and a very strong Retail Sales report. Remember, that as we get some economic growth, it will pressure mortgage rates slightly higher.
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
December 7, 2009
Drop in Unemployment Helps Housing
As employment levels stabilize it always leads to stronger demand for housing. This is natural as consumers feel more confident in their employment and income stability.
We received two reports about Unemployment that pointed to a rebound: First, we had the Initial Claims report that showed that it had its lowest level in 2009. It is the first time that we cracked the 460K mark. Secondly, the Unemployment Rate was released and showed a decline for the first time this year. The Unemployment rate came in at 10.0%, down from last month’s 10.2%. Also, the non-farm payroll losses were only 11,000 vs. last month’s 111,000.
As we start to see more stability in the employment sector, it will naturally push up demand (and home prices) when combined with very low mortgage rates and declining inventories of homes for sale.
What Happened to Rates Last Week?
Newspapers are reporting that we are at the lowest interest rates for 2009 but data in the newspapers is always from industry surveys that are at least a week old. The fact is that mortgage rates rose every single day last week. They are still at great levels but are off of our yearly lows from last week. It is important that you check with me for current mortgage rates as they change often and you don’t want to miss an opportunity by relying on old newspaper data.
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
December 2, 2009
Several Reports Point to Stronger Housing
Existing home sales shot up 10.1% in October and reached the highest level in 2 ½ years, according to the National Association of Realtors. They also reported that the national median home price had the smallest decline in over a year.
New home sales jump 6.2%, to reach their highest level in over one year. The U.S. Commerce Department reported that new home sales hit annual rate of 430K with the strongest sales coming from the South. I reported last week that new home starts were down. This bodes well for home prices if inventory is being reduced and demand is increasing.
And lastly, the Standard and Poor’s/Case-Shiller Indexes were released and showed that U.S. home prices rose for the fifth straight month. This is a composite index of 20 metro areas and showed a price increase of 0.3 percent.
What Happened to Rates Last Week?
We saw our best 30 year fixed mortgage rates in six months last week. This gain primarily was due to the U.S. Dollar hitting 17 month lows coupled with a holiday shortened week that caused many traders to park their funds temporarily into mortgage backed securities until next week.
What to watch out for this week
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
November 22, 2009
Positive News for Housing Industry as New Housing Starts Decline:
Both U.S. housing starts and permits dropped for the second consecutive month according to the U.S. Census Bureau. Single family starts dropped 6.8% and building permits dropped 4.0%.
So why is this good news?
This is good news because it does not add to our inventories of homes available for sale. We have had several months of very strong sales in both existing residences and newly constructed homes which have helped to lower our inventory levels each month. The newly extended and expanded tax credit and ultra low mortgage rates could ensure continued strength in sales. While we are still in a buyer’s market, many are starting to realize that it will not continue forever. As inventory levels continue to move towards an equilibrium, it will gradually shift to a more balanced market for both buyers and sellers.
What Happened to Rates Last Week?
We moved sideways for the week as Mortgage Backed Securities lost -13 basis points. This did put a little pressure on 30 year fixed mortgage rates but we still are trading in a range that is great for rates.
What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
November 16, 2009
5% of Americans Plan to Buy a Home Next Year
A new survey conducted for Move, Inc. showed that Americans are starting to respond to the housing recovery after three years of price declines.
The survey shows that these purchasers are at least 34 years old. A quarter of those surveyed said the number one reason they would buy now is because they believe prices have bottomed out.
Home sales have always relied heavily on consumer confidence. With potential home buyers believing that prices may have bottomed, and three consecutive months of existing home sales increases, it points to good demand for housing.
Let me show you how to take advantage of these great home prices, interest rates, and tax credits!
What Happened to Rates Last Week?
We ended our week on a high note as mortgage backed securities rallied 37 basis points causing 30 year fixed rates to drop to their lowest levels in two weeks. Mortgage Backed Securities reacted favorably to a very weak U.S. dollar which made bonds attractive to foreign purchasers and reduced the threat of near-term inflation.
What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700
November 13, 2009
Homebuyer Tax Credit Extended and Expanded:
The highly successful first-time homebuyer tax that was set to expired at the end of this month has been extended for a second time. Plus, it is now available to people that currently own homes. There are a lot of myths about who can get this tax credit, so I have prepared the following for you:
Important date: May 1, 2010. This is the date that purchase contracts must be signed to be eligible. The transaction must close by July 1, 2010. But purchase contracts dated June 1st, for example, are not eligible even though they will close prior to July 1st because the contract was executed after the May1, 2010 deadline.
First-time Homebuyer: Tax Credit Amount = up to $8,000. How is this calculated? It is 10% of the home’s value or $8,000 whichever is less. So, any home over $80,000 will get a maximum tax credit of $8,000. What is a First-time homebuyer? It is anyone that has not previously owned a home or has not owned a primary residence within the last 36 months. Individuals that currently own second homes or vacation homes but have not lived in them for the past 36 months may still qualify.
Existing Homebuyer: Tax Credit Amount = up to $6,500. This is for current homeowners that have lived in their current home for at least 5 years. So, if you purchased your home 2 years ago you would not qualify.
Military Bonus: If you served in our military for more than 90 days outside of our boarders, you get a one-year extension and have until 2011.
Income Limits: The tax credit begins to phase out for a single person that makes more than $125,000. For married couples it phases out at $225,000.
What Happened to Rates Last Week?
We ended our week on a high note as mortgage backed securities rallied 34 basis points causing 30 year fixed rates to drop to their lowest levels in two weeks. Mortgage Backed Securities reacted favorably to the Unemployment rate of 10.2%. With Unemployment increasing, it offsets the threat of inflation. Inflation is the number one enemy of mortgage rates.
What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.
I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional and government mortgage rates are based upon. So, I know if there is going to be a trend reversal in mortgage rates.
Please call on me any time for an industry update.
Respectfully,
George Matthews
410.599.9700