Showing posts with label Sanibel Captiva mortgage rates home sales. Show all posts
Showing posts with label Sanibel Captiva mortgage rates home sales. Show all posts
Tuesday, January 30, 2024
Tuesday, December 5, 2023
Tuesday, July 11, 2023
Tuesday, April 17, 2012
Keeping you Updated on the Mortgage Market
For the week of April 16, 2012
MARKET RECAP
The shift from winter tranquility to spring volatility is readily apparent in the mortgage markets. Fed Chairman Bernanke has noted that there are still considerable challenges which face the economy and that the Fed’s low rate stance is what is driving them back downward. Freshly-released minutes of the last Fed meeting from three weeks ago reflected the strong economy leading up to that point. This pushed rates back up, with the deepening woes in Europe and the weak March employment report causing rates to go back down again.
The statement accompanied by the close of the Monetary Policy Setting Committee and subsequent testimony of Fed Chairman Bernanke both suggest that the economic climate may require additional support for the coming time period. The meeting minutes themselves indicate otherwise, in them is a stronger assessment of the state of the economy – one in which the Fed may be less inclined to start or expand any programs designed to keep interest and mortgage rates low into the future.
In other words, the economy is growing but with less strength than previously thought. Interest rates had been easing somewhat, as an accumulation of the most recent economic data pointed towards expansion, with slightly less upward momentum at the end of the first quarter than at the beginning of it. The mixed signals are continuing.
Adding to the challenge of determining whether or not the current market conditions are moving upward or downward is the recent unemployment figures with 357,000 new applications for unemployment benefits filed during the last week of March. However, fewer people getting laid off is different than more people getting hired and new jobs being created. While job retention is an indicator of economic improvement, it is still a wobbly economy which needs steadying.
Broadening the recovery means hiring the under-employed as well as the unemployed. Over the past three months, a spate of hiring pushed new job creation well over the 200,000 level. Upon closer examination, the 120,000 new hires in March are exactly one-half of the February gain. This weaker-than-expected report counterbalances the FOMC’s ‘stronger’ minutes, and underlies the cause of retreating interest rates. While the nation’s unemployment rate slipped to 8.2% for the month, the contraction in the labor force itself accounts for at least a portion of the declining rates.
Economic Indicator - Release Date and Time -Consensus Estimate - Analysis
Bureau of Labor/PPI
April 16, 2012, 8:30 a.m. EST
Unchanged at 0.4 percent, but up from 0.1 January 2012
Moderately Important. Increase is holding steady which can help
Business Outlook Survey
April 19, 2012, 12pm EST
Up 2.3 from 10.2 in February 2012 to 12.5 in March
Important.With moderate price pressures, positive future movement is suggested.
Durable Goods Report
April 20, 2012, 8:30 a.m. EST
2.2 percent increase, following the 3.6 percent January decrease
Moderately Important. Increase is offset by prior decrease
S & P/Case Shiller Home Price Index
April 24, 2012, 9:00 a.m. EST
+0.2% positive annual growth in Denver
Moderately Important.Regional growth is tempered by national market condition decreases
Regional Growth Leading Recovery
Looking at the S&P/Case Shiller home price index, there are not enough signs to completely guarantee that prices have stopped their descent which began in 2006. The main overlying positive sign in median housing prices is that prices are not descending as rapidly compared to the last few years. The index itself is still down by more than 30 percent.
That covers the national outlook. The regional outlook, particularly for Denver, is a little bit rosier. Many residential developers, realtors, investors, and mortgage lenders are busy in some areas of the country; Denver being one of them.
There are still issues with the national foreclosure settlement between the major mortgage lenders, the state attorney generals, and the federal government. It remains uncertain how the market itself will behave once the five banks involved begin to write-down principal mortgage amounts of underwater properties. Analysts point out that it could stem the pace of foreclosures or enlarge the REO portfolios of these lending entities.
The only certainty for 2012, is that the housing recovery will be seen on a regional level, rather than national. Fortunately, for the Denver housing market, that is good news as it is one of the regions which is showing positive momentum and the beginnings of growth.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
See what's for sale on Sanibel & Captiva Islands www.SanibelHomeSeeker.com
MARKET RECAP
The shift from winter tranquility to spring volatility is readily apparent in the mortgage markets. Fed Chairman Bernanke has noted that there are still considerable challenges which face the economy and that the Fed’s low rate stance is what is driving them back downward. Freshly-released minutes of the last Fed meeting from three weeks ago reflected the strong economy leading up to that point. This pushed rates back up, with the deepening woes in Europe and the weak March employment report causing rates to go back down again.
The statement accompanied by the close of the Monetary Policy Setting Committee and subsequent testimony of Fed Chairman Bernanke both suggest that the economic climate may require additional support for the coming time period. The meeting minutes themselves indicate otherwise, in them is a stronger assessment of the state of the economy – one in which the Fed may be less inclined to start or expand any programs designed to keep interest and mortgage rates low into the future.
In other words, the economy is growing but with less strength than previously thought. Interest rates had been easing somewhat, as an accumulation of the most recent economic data pointed towards expansion, with slightly less upward momentum at the end of the first quarter than at the beginning of it. The mixed signals are continuing.
Adding to the challenge of determining whether or not the current market conditions are moving upward or downward is the recent unemployment figures with 357,000 new applications for unemployment benefits filed during the last week of March. However, fewer people getting laid off is different than more people getting hired and new jobs being created. While job retention is an indicator of economic improvement, it is still a wobbly economy which needs steadying.
Broadening the recovery means hiring the under-employed as well as the unemployed. Over the past three months, a spate of hiring pushed new job creation well over the 200,000 level. Upon closer examination, the 120,000 new hires in March are exactly one-half of the February gain. This weaker-than-expected report counterbalances the FOMC’s ‘stronger’ minutes, and underlies the cause of retreating interest rates. While the nation’s unemployment rate slipped to 8.2% for the month, the contraction in the labor force itself accounts for at least a portion of the declining rates.
Economic Indicator - Release Date and Time -Consensus Estimate - Analysis
Bureau of Labor/PPI
April 16, 2012, 8:30 a.m. EST
Unchanged at 0.4 percent, but up from 0.1 January 2012
Moderately Important. Increase is holding steady which can help
Business Outlook Survey
April 19, 2012, 12pm EST
Up 2.3 from 10.2 in February 2012 to 12.5 in March
Important.With moderate price pressures, positive future movement is suggested.
Durable Goods Report
April 20, 2012, 8:30 a.m. EST
2.2 percent increase, following the 3.6 percent January decrease
Moderately Important. Increase is offset by prior decrease
S & P/Case Shiller Home Price Index
April 24, 2012, 9:00 a.m. EST
+0.2% positive annual growth in Denver
Moderately Important.Regional growth is tempered by national market condition decreases
Regional Growth Leading Recovery
Looking at the S&P/Case Shiller home price index, there are not enough signs to completely guarantee that prices have stopped their descent which began in 2006. The main overlying positive sign in median housing prices is that prices are not descending as rapidly compared to the last few years. The index itself is still down by more than 30 percent.
That covers the national outlook. The regional outlook, particularly for Denver, is a little bit rosier. Many residential developers, realtors, investors, and mortgage lenders are busy in some areas of the country; Denver being one of them.
There are still issues with the national foreclosure settlement between the major mortgage lenders, the state attorney generals, and the federal government. It remains uncertain how the market itself will behave once the five banks involved begin to write-down principal mortgage amounts of underwater properties. Analysts point out that it could stem the pace of foreclosures or enlarge the REO portfolios of these lending entities.
The only certainty for 2012, is that the housing recovery will be seen on a regional level, rather than national. Fortunately, for the Denver housing market, that is good news as it is one of the regions which is showing positive momentum and the beginnings of growth.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
See what's for sale on Sanibel & Captiva Islands www.SanibelHomeSeeker.com
Tuesday, April 10, 2012
Keeping you updated on the market! For the week of April 9, 2012
MARKET RECAP
Just as anticipated, mortgage rates have settled back a bit after its recent upward movement of fifteen basis points over the last two weeks. Widespread upward economic movement fostered the rise, but a more realistic approach to the economy’s forward momentum seems to be creeping back in.
Rates have bumped off a little from their historic bottoms of February, but the modest movement should not create any additional disturbance or turbulence for the housing market. Even in the worst-case scenario, the eighth percentage point increase in a loan’s interest rate is probably not enough to ruin most deals. Especially since that slight increase could be ‘brought down’ through the payment of approximately a half-point fee, perhaps less.
It should be no surprise to anyone who has applied for a loan recently that banks are being much more careful. A new repost indicates just how tight conditions have become – and how even borrowers with favorable credit profiles are being denied. Loans closed by banks and mortgage lenders in February had borrowers with an average credit score of 750; this average is up from 740 six months earlier, and an average loan-to-value ratio of 76%, with the average denied loan having a credit score of 699 and a loan-to-value ratio of 83%.
While there is no hard downshift in economic activity, research shows that essentially, with the new spring housing season approaching, we are in the same boat, just with more favorable mortgage rates. An accumulation of February data and early data available for March suggests that activity is stabilizing with a softer trend beginning. Federal Chairman Bernanke’s reassurance about the direction of interest rates doesn’t hurt either, in terms of tri mm ing any upward pressure for current rates.
Recent weekly data is reinforcing the notion that a cooler economic climate is in formation. Claims for new unemployment benefits moved downward in January to a rate which is the lowest it has been in 4 years. However, the unemployment benefits rate does not incorporate in statistics about workers who are under-employed. Approximately 9.3 million workers are considered underemployed as defined by the Bureau of Labor Statistics. That number is up from just over 8 million in July 2011, but down from a peak of approximately 9.5 million in September 2010. Overall, employment gains for March will be no better nor no worse than February.
Economic Indicator - Release Date and Time - Consensus Estimate - Analysis
Consumer Price Index
Monday April 12, 8:30 a.m. EST
Remains at 0.4 level
Important. Over the last 12 months, there has been a 2.9% increase.
Retail Sales Report
Tuesday April 13, 8:30 a.m. EST
1.1% increase over previous and 6.5% up from February 2011
Important. Only one area down from February 2011 rates.
Industial Production
Friday April 16, 9:15 a.m. EST
Holding steady at 0.4 rise
Moderately Important.Misc. goods and home electronics contribute greatly.
Housing Starts
Saturday April 17, 8:30a.m. EST
1.1% down from previous but 2.9% over February 2011
Moderately Important. Statistical analysis shows starts are for projects on existing homes.
Stability Increasing
It will be another month before anyone can take a look at the Gross Domestic Product for quarter one of 2012. Current information reveals that the last quarter of 2011 held a 3% clip for GDP , but the early indicators are revealing that there is a slight slippage from that pace. The economy’s ability to expand or grow, without kicking off inflation is thought to be around 2.8% GDP . However, as Chairman Bernanke points out, there needs to be considerably stronger growth for at least a little while, if the unemployment rate is to decline significantly.
According to the Chicago Federal Reserve National Activity Index – (an economic gauge which uses some 85 indicators to determine if the economy is growing faster or slower than its ‘potential’) – came in at a diminutive negative -0.09 for February 2012; down from a relatively brisk +33 in January. With the use of these figures, this puts GDP growth just shy of 2.8% for the month.
In February, orders for durable goods moved to 2.2% higher. This positive news was a tad below economic expectations, and was not as much of an anticipated recovery from the 3.6% decline in January. However, it is very co mm on to see swings from negative to positive and back again in durable goods ordered, while the current percentage holds its own.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
To see all homes for sale on Sanibel and Captiva Islands see my website www.SanibelHomeSeeker.com
Just as anticipated, mortgage rates have settled back a bit after its recent upward movement of fifteen basis points over the last two weeks. Widespread upward economic movement fostered the rise, but a more realistic approach to the economy’s forward momentum seems to be creeping back in.
Rates have bumped off a little from their historic bottoms of February, but the modest movement should not create any additional disturbance or turbulence for the housing market. Even in the worst-case scenario, the eighth percentage point increase in a loan’s interest rate is probably not enough to ruin most deals. Especially since that slight increase could be ‘brought down’ through the payment of approximately a half-point fee, perhaps less.
It should be no surprise to anyone who has applied for a loan recently that banks are being much more careful. A new repost indicates just how tight conditions have become – and how even borrowers with favorable credit profiles are being denied. Loans closed by banks and mortgage lenders in February had borrowers with an average credit score of 750; this average is up from 740 six months earlier, and an average loan-to-value ratio of 76%, with the average denied loan having a credit score of 699 and a loan-to-value ratio of 83%.
While there is no hard downshift in economic activity, research shows that essentially, with the new spring housing season approaching, we are in the same boat, just with more favorable mortgage rates. An accumulation of February data and early data available for March suggests that activity is stabilizing with a softer trend beginning. Federal Chairman Bernanke’s reassurance about the direction of interest rates doesn’t hurt either, in terms of tri mm ing any upward pressure for current rates.
Recent weekly data is reinforcing the notion that a cooler economic climate is in formation. Claims for new unemployment benefits moved downward in January to a rate which is the lowest it has been in 4 years. However, the unemployment benefits rate does not incorporate in statistics about workers who are under-employed. Approximately 9.3 million workers are considered underemployed as defined by the Bureau of Labor Statistics. That number is up from just over 8 million in July 2011, but down from a peak of approximately 9.5 million in September 2010. Overall, employment gains for March will be no better nor no worse than February.
Economic Indicator - Release Date and Time - Consensus Estimate - Analysis
Consumer Price Index
Monday April 12, 8:30 a.m. EST
Remains at 0.4 level
Important. Over the last 12 months, there has been a 2.9% increase.
Retail Sales Report
Tuesday April 13, 8:30 a.m. EST
1.1% increase over previous and 6.5% up from February 2011
Important. Only one area down from February 2011 rates.
Industial Production
Friday April 16, 9:15 a.m. EST
Holding steady at 0.4 rise
Moderately Important.Misc. goods and home electronics contribute greatly.
Housing Starts
Saturday April 17, 8:30a.m. EST
1.1% down from previous but 2.9% over February 2011
Moderately Important. Statistical analysis shows starts are for projects on existing homes.
Stability Increasing
It will be another month before anyone can take a look at the Gross Domestic Product for quarter one of 2012. Current information reveals that the last quarter of 2011 held a 3% clip for GDP , but the early indicators are revealing that there is a slight slippage from that pace. The economy’s ability to expand or grow, without kicking off inflation is thought to be around 2.8% GDP . However, as Chairman Bernanke points out, there needs to be considerably stronger growth for at least a little while, if the unemployment rate is to decline significantly.
According to the Chicago Federal Reserve National Activity Index – (an economic gauge which uses some 85 indicators to determine if the economy is growing faster or slower than its ‘potential’) – came in at a diminutive negative -0.09 for February 2012; down from a relatively brisk +33 in January. With the use of these figures, this puts GDP growth just shy of 2.8% for the month.
In February, orders for durable goods moved to 2.2% higher. This positive news was a tad below economic expectations, and was not as much of an anticipated recovery from the 3.6% decline in January. However, it is very co mm on to see swings from negative to positive and back again in durable goods ordered, while the current percentage holds its own.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
To see all homes for sale on Sanibel and Captiva Islands see my website www.SanibelHomeSeeker.com
Monday, March 19, 2012
Keeping you updated on the market. For the week of March 19, 21012
MARKET RECAP
So what's up with home prices? That is, are home prices up? Over the past two months we've reported on a slew of data that show prices are down, but the data have been somewhat stale: much of them focused on the last quarter of 2011.
Where prices are going, not where they've been, matters. More contemporary data – the data most likely to portend the future – show prices on the rise.
RE/ MAX reports that home prices increased year-over-year in February for the first time in 18 months. RE/ MAX opines that the turnaround signifies “a very active selling season.”
We agree, because the price increases were much steeper in many local markets than we had anticipated. Miami posted a 20.5% year-over-year gain; Phoenix, a 12.5% gain; and Detroit, a 8.9% gain. Not so long ago, these three burgs were in full free-fall mode. (When Las Vegas shows a double-digit year-over-year percentage price increase, you can be sure the recovery has spread nationwide.)
The outlook is also looking rosier for new home sales. The home builder sentiment index has been rising for the past five months, and the rising optimism appears justified. Barclays Capital reports that initial data for the year are encouraging, noting that “the spring selling season has arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005.” Barclays raised its rating on a number of home builder stocks.
Signs of a sustained rebound are also reflected in mortgage purchase applications, which have been rising over the past month. The MBA reports that purchase applications are nearly 12% higher than where they were just a month ago and are approaching the level when the federal home-buyer tax credit fueled the market two years ago.
More purchase activity is understandable: Affordability remains high and mortgage loan rates remain low. The prime 30-year fixed-rate loan still hovers around 4% (and when we say “around” we mean mostly above lately).
Rates have been on the rise, though, and this isn't a surprise. Over the past two weeks, the yield on the 10-year U.S. Treasury note is up 30 basis points. Long-term mortgage lending rates take their queue from the 10-year U.S. Treasury note, which guides the rates on long-term mortgage-backed securities. Where the yield on the 10-year Treasury goes, mortgage lending rates generally follow.
We've been saying since the beginning of the year that we couldn't see rates dropping materially lower. The corollary is the risk of rates moving higher is likely rising. The scuttlebutt we're hearing is that some lenders are already looking to 4.5% to 4.75% by June.
Rates are rising for a number of reasons. The economy is improving and investor confidence is rising, which means investors are becoming less risk averse. Money is flowing out of the bond market and into the stock market, thus pushing yields on bond investments higher and yields on stock investments lower.
It's impossible to know with certainty where mortgage lending rates will be in three months, but if the choice were between 3.5% and 4.5%, we'd give you dollars-to-donuts odds on the latter.
Economic Indicator, Release Date and Time, Consensus Estimate, Analysis:
Home Builders Index(March)
Mon, March 19,10:00 am , et
30 Index
Important. Rising optimism points to a rising new-home sales through the summer.
Housing Starts(February)
Tues, March 20,8:30 am , et
702,000 (Annualized)
Important. Starts continue to expand toward a more normalized rate.
Mortgage Applications
Wed., March 21,7:00 am , et
None
Important. Gains in purchase applications point to monthly strength in home sales.
Existing Home Sales(February)
Wed., March 21,10:00 am , et
460,000 (Annualized)
Important. Rising sales on firming prices reflect a strengthening housing market.
New Home Sales(February)
Fri., March 23,10:00 am , et
330,000 (Annualized)
Important. Sales finally appear to have developed a sustainable uptrend.
Time's a Wastin'
The economy continues to improve at an accelerating pace: Jobs are now being added at a minimum rate of 200,000 a month and unemployment has fallen in 45 states and the District of Columbia .
More people working and more economic growth means the overhang of REO and distressed properties will be be picked over sooner rather than later. It also means more pressure on interest rates to rise.
Yes, the Federal Reserve is doing everything in its power to hold interest rates low. It continues to reinvest principal payments from its holdings of Treasury notes and bonds and mortgage-backed securities into more mortgage-backed securities. The Fed's demand for these securities helps hold lending rates low. Problem is, the Fed lacks the power to stem market forces in perpetuity. If the market demands higher mortgage rates, it will eventually get it.
Given the surge in demand that will occur with HARP 2.0 and a continued rise in purchase applications, we think it is riskier than it has been in years to wait to refinance or purchase a home. In other words, we think the market will get its wish for higher lending rates sooner than many home buyers or refinancers think.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
So what's up with home prices? That is, are home prices up? Over the past two months we've reported on a slew of data that show prices are down, but the data have been somewhat stale: much of them focused on the last quarter of 2011.
Where prices are going, not where they've been, matters. More contemporary data – the data most likely to portend the future – show prices on the rise.
RE/ MAX reports that home prices increased year-over-year in February for the first time in 18 months. RE/ MAX opines that the turnaround signifies “a very active selling season.”
We agree, because the price increases were much steeper in many local markets than we had anticipated. Miami posted a 20.5% year-over-year gain; Phoenix, a 12.5% gain; and Detroit, a 8.9% gain. Not so long ago, these three burgs were in full free-fall mode. (When Las Vegas shows a double-digit year-over-year percentage price increase, you can be sure the recovery has spread nationwide.)
The outlook is also looking rosier for new home sales. The home builder sentiment index has been rising for the past five months, and the rising optimism appears justified. Barclays Capital reports that initial data for the year are encouraging, noting that “the spring selling season has arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005.” Barclays raised its rating on a number of home builder stocks.
Signs of a sustained rebound are also reflected in mortgage purchase applications, which have been rising over the past month. The MBA reports that purchase applications are nearly 12% higher than where they were just a month ago and are approaching the level when the federal home-buyer tax credit fueled the market two years ago.
More purchase activity is understandable: Affordability remains high and mortgage loan rates remain low. The prime 30-year fixed-rate loan still hovers around 4% (and when we say “around” we mean mostly above lately).
Rates have been on the rise, though, and this isn't a surprise. Over the past two weeks, the yield on the 10-year U.S. Treasury note is up 30 basis points. Long-term mortgage lending rates take their queue from the 10-year U.S. Treasury note, which guides the rates on long-term mortgage-backed securities. Where the yield on the 10-year Treasury goes, mortgage lending rates generally follow.
We've been saying since the beginning of the year that we couldn't see rates dropping materially lower. The corollary is the risk of rates moving higher is likely rising. The scuttlebutt we're hearing is that some lenders are already looking to 4.5% to 4.75% by June.
Rates are rising for a number of reasons. The economy is improving and investor confidence is rising, which means investors are becoming less risk averse. Money is flowing out of the bond market and into the stock market, thus pushing yields on bond investments higher and yields on stock investments lower.
It's impossible to know with certainty where mortgage lending rates will be in three months, but if the choice were between 3.5% and 4.5%, we'd give you dollars-to-donuts odds on the latter.
Economic Indicator, Release Date and Time, Consensus Estimate, Analysis:
Home Builders Index(March)
Mon, March 19,10:00 am , et
30 Index
Important. Rising optimism points to a rising new-home sales through the summer.
Housing Starts(February)
Tues, March 20,8:30 am , et
702,000 (Annualized)
Important. Starts continue to expand toward a more normalized rate.
Mortgage Applications
Wed., March 21,7:00 am , et
None
Important. Gains in purchase applications point to monthly strength in home sales.
Existing Home Sales(February)
Wed., March 21,10:00 am , et
460,000 (Annualized)
Important. Rising sales on firming prices reflect a strengthening housing market.
New Home Sales(February)
Fri., March 23,10:00 am , et
330,000 (Annualized)
Important. Sales finally appear to have developed a sustainable uptrend.
Time's a Wastin'
The economy continues to improve at an accelerating pace: Jobs are now being added at a minimum rate of 200,000 a month and unemployment has fallen in 45 states and the District of Columbia .
More people working and more economic growth means the overhang of REO and distressed properties will be be picked over sooner rather than later. It also means more pressure on interest rates to rise.
Yes, the Federal Reserve is doing everything in its power to hold interest rates low. It continues to reinvest principal payments from its holdings of Treasury notes and bonds and mortgage-backed securities into more mortgage-backed securities. The Fed's demand for these securities helps hold lending rates low. Problem is, the Fed lacks the power to stem market forces in perpetuity. If the market demands higher mortgage rates, it will eventually get it.
Given the surge in demand that will occur with HARP 2.0 and a continued rise in purchase applications, we think it is riskier than it has been in years to wait to refinance or purchase a home. In other words, we think the market will get its wish for higher lending rates sooner than many home buyers or refinancers think.
Article courtesy of Patti Wilson, Senior Loan Officer, Mutual of Omaha Bank.
Subscribe to:
Posts (Atom)