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Quick Mortgage Rate Update!

Joe Cline — Fri, 08 May 2009 12:31:22 +0000

Thirty-year mortgage rates fell to 4.78% last Friday, hitting their lowest level since Freddie Mac started tracking rates in 1970.One-year Adjustable Rate Mortgages (ARMs) were almost the same, at 4.77%.

1/9/09 Mortgage Market Week-in-Review

Marie Funston — Mon, 12 Jan 2009 06:01:26 +0000

What Did Interest Rates Do This Week?

** according to Freddie Mac **

30-yr Fixed – Lower

This Week: 5.01% — lowest since 1971

Last Week: 5.10%

1yr Ago: 5.87%

15-yr Fixed – Lower

This Week: 4.62%

Last Week: 4.83%

1yr Ago: 5.43%

5/1 ARM – Lower

This Week: 5.49%

Last Week: 5.57%

1yr Ago: 5.63%

Highlight of This Week’s Major Economic Reports

Despite a recent uptick in Treasury yields, mortgage rates actually fell during the first full week of the New Year. One major catalyst driving this dip is the start of the Fed’s foray in purchasing mortgage-backed securities. The $500 billion budgeted for this shopping spree is helping to increase demand, which in turn has kept rates low.

Stocks also took a hit throughout the week as retailers and other corporations took turns issuing earnings warnings. This then led to a ‘flight to quality’ mad-rush over to the bonds markets, thereby further driving down rates.

And, lastly, there was the much-anticipated Employment Report. We knew it wasn’t going to be pretty. 524,000 jobs lost in December, which brought the final 2008 tally to 2.6 million. The unemployment rate now sits at a level we haven’t seen in 16 years – 7.2%. Despite the gloomy outlook for the job market, most economists do not anticipate the unemployment rate to hit double-digit levels, since the economy (i.e., GDP) is expected to make a comeback (albeit a modest one) in the second half of the year.

What to Look for Next Week

We’ll get to find out just how bad the worst holiday shopping season in years was when the latest Retail Sales figures come out on Wednesday. Then, of course, there are the all-important inflation gauges in the Consumer Price and Producer Price Indexes. Inflation is not expected to be an issue at all; it’s more so seeing if the numbers start to creep into deflationary territory, as many economists fear.

Short-Term Rate Outlook

Fractionally Lower

Marie Funston

Senior Mortgage Advisor | Cell: (512) 750-7270

Real Estate Terms: Fannie Mae, Freddie Mac, and Ginnie Mae

J Cline — Tue, 30 Sep 2008 15:52:24 +0000

There are so many options with regard to mortgage loans, that the opportunity to review some basic terms is the best approach before obtaining a loan. Often heard during the mortgage and home buyer experience are several references to federal mortgage corporations. Rarely are they explained in a simple clear manner. We will begin by explaining what Fannie Mae, Freddie Mac and Ginnie Mae actually are and how they apply in the industry.

Fannie Mae is Federal National Mortgage Association or FNMA – The Company was chartered by the congress, however it is share-holder owned. Currently they are the principal supplier of residential mortgage funds.

Ginnie Mae or the Government National Mortgage Association or GNMA – The Company is a part of the United States Department of Housing and Urban Development (HUD). This Government agency was created by Congress to provide mortgage funding for lenders who are purchasing with a VA or other Government owned / backed Loans.

Freddie Mac is the Federal Home Loan Mortgage Corporation or FHLMC – This Company is a shareholder run company who creates a secondary mortgage market by purchasing all forms of loans from the primary market for mortgage lenders.

Generally speaking the two share holder based companies do not have much if any federal involvement. Recently due to the Real Estate Mortgage Crisis, and the subsequent repercussions, the federal government has altered their position. They now hold influential positions with in both companies to attempt to circumvent further problems. Time will tell if this was the correct choice for the country and the real estate market place.

Housing Slump Hits Fannie Mae and Freddie Mac Hard

J Cline — Fri, 22 Aug 2008 14:50:43 +0000

The mortgage crisis and housing slump that has taken the US by storm had created serious financial losses for the Fannie Mae Corporation, as well as the Freddie Mac program. These losses are not only detrimental for the companies themselves, but also for those in the market for mortgages, as the costs for using these programs will increase significantly to help make up for the losses.

Reports from the second quarter that were recently released showed an increase in revenue for Fannie Mae, but the expenses incurred swallowed them up, and then some. There was a loss expected by analysts, however the $2.3 billion in losses that was incurred was many times greater than anyone could have anticipated. Freddie Mac’s projected loss was much less than the actual damage, as well.

These programs are in place to buy higher risk mortgages from lenders and resell them to investors, guaranteeing the repayment of the loans. In order to keep the companies operational, the federal government is working on an emergency plan to add billions of dollars in funding to the companies. The funding has been passed, but has not yet been enacted.

As these two institutions are connected with more than half of the open mortgages in the country, keeping them operational is crucial. The companies plan to decrease operating costs over the coming months, hoping that this, combined with the federal help will help them to keep their heads above water.

4/25/08 Mortgage Market Week-in-Review

Marie Funston — Sun, 27 Apr 2008 23:28:50 +0000

What Did Interest Rates Do This Week? ** according to Freddie Mac ** 30-yr Fixed – Higher This Week: 6.03% Last Week: 5.88% 1yr Ago: 6.16% 15-yr Fixed - Higher This Week: 5.62% Last Week: 5.40% 1yr Ago: 5.87% 5/1 ARM – Higher This Week: 5.68% Last Week: 5.48% 1yr Ago: 5.88% Highlight of This Week’s Major Economic Reports Not-so-bad economic news and continued fears of inflation sparked a jump in mortgage rates this week. This has led to many downgrading their beliefs that the Fed will cut rates much – if at all – when it meets next week. While economic growth remains subpar, recent data shows that things may not be as bad anymore as feared. Unemployment claims were down last week. Manufacturing isn’t as down as it had been earlier in the year. Overall economic activity was less negative – a possible sign that the downturn is leveling off. On the housing front, home sales fell again in March. Existing Home Sales fell 2% last month, while New Home Sales tumbled 9%. The good news to these bleak numbers is that the declines were softer than expected, and the average price for existing homes did go up slightly by 0.9%. With demand continuing to stay low, inventory remains at higher levels, but many economists expect for inventory to come back down in the not too distant future. The relentless spike in food and oil prices (hello, $5/gal?) are weighing heavily on our checkbooks, so the government has decided to start shipping the “stimulus checks” earlier than expected. We probably shouldn’t expect for this to do much to actually stimulate the economy, as this extra money will likely just go towards paying for gas and food. The market has set the expectation that the Fed will cut short-term rates by 0.25% next week. It is also anticipated that they will note stability in the financial markets and will shift their focus back to inflation – a sign that this may be the end (at least for now) to the rate cuts. Don’t take this as bad news, however, as the Fed’s rate cut will only impact the Prime Rate. Mortgage rates, remember, are separate and follow longer-term bond yield movement. What to Look for Next Week The Fed’s monthly policy meeting and the April Employment Report will be the headliners for the week. We will likely see a 0.25% rate cut from the Fed (perhaps the last one for now), which has already been priced in to current mortgage rates. And, many expect for the unemployment rate to tick up slightly in April. Odds aren’t great for us to see any improvement in rates. Short-Term Rate Outlook Slightly Higher Tools to Help Your Buyers & Sellers Rates on the rise? It doesn’t matter! With Pre-Purchase Rate Protection from PHH Mortgage, you can protect your purchasing power with the ability to cap your interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements. So, whether rates go up or down, you will win! Call Marie Funston – PHH Mortgage – (512) 691-6757

Mortgage Rates Fairly Steady

J Cline — Thu, 17 Apr 2008 22:33:42 +0000

Recently released by Freddie Mac, the Primary Mortgage Market Survey (PMMS) figures for the week ending April 10 reveal a distinctive lack of change in 15- and 30-year fixed rate mortgages (FRM) during that time. Additionally BankRate.com’s weekly market assessment confirmed the rates appear to have plateaued. This is despite the Fed’s action in lowering rates for adjustable rate mortgages (ARM). Fifteen-year FRMs averaged 5.42 percent over the past two weeks, and 30-year FRMs averaged 5.88 percent. Vice president and chief economist for Freddie Mac, Frank Nothaft, surmises the steady rates are due to the stagnant economy and lower existing home sales, as well as the loss of jobs. This article in the Statesman looks at the unchanged FRM rate as a bad sign: that the banks are holding back on lowering rates for long-term loans, such as mortgages. This would be attributed to the “skittishness” resulting from the high rate of foreclosures as a result of loan defaults. While it appears that the mortgage rates are low, a potential mortgagee is expected to pay an average of more than 2 percentage points, rather than the traditional 1.5, for a 30-year FRM. This translates to a higher initial out of pocket expense for the borrower. Some see the steady rates as a good sign. In the Austin area, house prices have risen slightly, in contrast to much of the nation. Banks are cautious in the aftermath of the sub-prime debacle, and understandably so. As mortgage rates remain low, a potential home buyer can find encouragement in obtaining a loan to purchase a home and sellers can be ensured that they will receive a competitive price for their family home.

Are You Ready To Be A Home Owner?

J Cline — Tue, 08 Apr 2008 06:51:31 +0000

Considering the epidemic of home foreclosures, now would be a good time to step back and take honest stock of whether you are financially ready to take on this responsibility. Freddie Mac has guidelines to help you in determining your ability to purchase and maintain your own home. First and foremost is the purchase price. Chances are, unless you’re independently wealthy, you will need a mortgage. Most responsible lenders want to be sure you have a steady income enough to pay the mortgage, plus interest, and – in most cases – the escrow required for property taxes. Then, you have closing costs that will include the down payment, financing fees, title search, and any other costs you agreed to pay as part of the purchase negotiations. And this is just the beginning. You’ll need to furnish the house, heat and/or cool it, run appliances, use water, and have enough left over to repair or maintain the various systems and parts of your home. Owning a house may entail a lifestyle change: less dining out, fewer expensive vacations, buying your groceries at the discount supermarket instead of the gourmet take-out place. Though the costs may seem intimidating, home ownership has many long-run advantages. At the top of the list is it’s yours. You have an asset that will probably increase in value, as long as you keep up with the maintenance. Next is the savings. You often pay less on a mortgage than you would for rent and it’s entirely possible your federal income taxes will be reduced. Interest on a home mortgage and property taxes can be deducted from your yearly tax return. And, in the end, provided you’ve planned well, you own a piece of the American Dream.

3/7/08 Mortgage Market Week-in-Review From YOUR Coldwell Banker Mortgage Advisor

Marie Funston — Wed, 12 Mar 2008 20:22:02 +0000

What Did Interest Rates Do This Week? ** according to Freddie Mac ** 30-yr Fixed – Lower This Week: 6.03% Last Week: 6.24% 1yr Ago: 6.14% 15-yr Fixed – Lower This Week: 5.47% Last Week: 5.72% 1yr Ago: 5.86% 5/1 ARM – Lower This Week: 5.34% Last Week: 5.43% 1yr Ago: 5.90% Highlight of This Week’s Major Economic Reports According to Freddie Mac, “Weak economic reports that indicated declines in the job market, slowing in manufacturing, and low consumer confidence drove bond yields lower this week and mortgage rates followed. Interest rates for 30-year fixed-rate mortgages are now at the same levels as they were two weeks ago, erasing last week’s upward jump. “Meanwhile, the housing market continues to take a toll on the rest of the economy. Residential fixed investment shaved 1.25 percentage points off economic growth in the fourth quarter of 2007. More recently, the median sales price of new homes fell 15.1 percent in January, representing the largest annual drop on record. Residential construction fell 19.7 percent over the twelve-months ending January 2008, the largest decline since March 2007.” Moreover, as liquidity continues to be a concern in the financial markets, the Fed has announced an expansion of its Term Auction Facility, which will open up an additional $40 billion in “cheap money” to banks and lenders. This should help keep money flowing and loans going. Finally, HUD finally announced changes to conforming and FHA loan limits, as outlined by the Economic Stimulus Package. For the Austin metro area, FHA loans can now be made for up $288,750 for single-family residences. The conforming loan limit, however, will stay put at $417,000, so there is no change to what will be classified as jumbo loans for our market. What to Look for Next Week Retail Sales and the Consumer Price Index will help to determine the direction of rates. Short-Term Rate Outlook Stable Tools to Help Your Buyers & Sellers Rate Protection from Coldwell Banker Mortgage can provide that win-win situation for your clients! Whether rates go up or down, with Pre-Purchase Rate Protection, it doesn’t matter! Protect your buyers’ purchasing power by offering them the ability to cap their interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements. Call me to learn more @ (512) 691-6757

2/15/08 Mortgage Market Week-in-Review From YOUR Coldwell Banker Mortgage Advisor

Marie Funston — Wed, 20 Feb 2008 20:57:18 +0000

What Did Interest Rates Do This Week? ** according to Freddie Mac ** 30-yr Fixed – Higher This Week: 5.72% Last Week: 5.67% 1yr Ago: 6.30% 15-yr Fixed – Higher This Week: 5.25% Last Week: 5.15% 1yr Ago: 6.03% 5/1 ARM – Slightly Lower This Week: 5.19% Last Week: 5.21% 1yr Ago: 6.01% Highlight of This Week’s Major Economic Reports

According to Freddie Mac, “This week was relatively light on the number of economic data releases, which painted a mixed picture regarding the current state of the economy. On a positive note, labor productivity rose higher than market forecasts in the fourth quarter of 2007 while gains in labor costs slowed. However, pending existing home sales fell for the second month in December, indicating further weakness in home sales for January and February.

“These historically low mortgage rates and declining house prices contributed to the highest housing affordability in December since March 2005, according to the National Association of Realtors®. However, with banks continuing to tighten lending standards, fewer families will likely have an opportunity to take advantage of these factors.” What to Look for Next Week January’s Consumer Price Index will be the highlight of the holiday-shortened week. If headline inflation is higher than expected, mortgage rates will likely trend even further upward. Short-Term Rate Outlook Stable to Slightly Higher Tools to Help Your Buyers & Sellers Rate Protection from Coldwell Banker Mortgage can provide that win-win situation for your clients! Whether rates go up or down, with Pre-Purchase Rate Protection, it doesn’t matter! Protect your buyers’ purchasing power by offering them the ability to cap their interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements. Call me to learn more!

2/1/08 Mortgage Market Week-in-Review

Marie Funston — Sun, 03 Feb 2008 05:38:12 +0000

What Did Interest Rates Do This Week? ** according to Freddie Mac ** 30-yr Fixed – Higher This Week: 5.68% Last Week: 5.48% 1yr Ago: 6.34% 15-yr Fixed – Higher This Week: 5.17% Last Week: 4.95% 1yr Ago: 6.06% 5/1 ARM – Higher This Week: 5.32% Last Week: 5.13% 1yr Ago: 6.04% Highlight of This Week’s Major Economic Reports According to Freddie Mac, “Mortgage rates ended their four-week descent this week, with average rates on 30-year and 15-year fixed rate mortgages coming up by about 0.2%. This increase completely erased the previous week’s decline. The movement in fixed mortgage rates was broadly consistent with the movements of Treasury bonds over the week.” Amid continued concern over the credit market putting a squeeze on the rest of the economy, the Federal Reserve cut short-term rates for the second time in eight days. While this bodes well for rates on such things as credit cards, this move may actually cause mortgage rates to trend higher. What will cause mortgage rates to remain at lower levels, however, is continued economic weakness. Job growth, which is a good indicator of economic activity, was negative in January, much to the surprise of market analysts. There was a net loss of 17,000 jobs last month as businesses trimmed their payrolls in light of these uncertain times. The unemployment rate is now at 4.9%. Meanwhile, New Home Sales dropped another 4.7% in December with prices being cut 12% from November. Many are hoping that the recent drop in mortgage rates will help to spur sales. For some good news: GDP estimates showed a positive 0.6% for the 4^th quarter of 2007. While this figure is still weaker than expected, the fact it was “positive” should help to stave off the recession talks for another month. What to Look for Next Week Not much noteworthy activity on slate for next week, so look for stock market activity to once again drive the direction of mortgage rates. Short-Term Rate Outlook Stable Tools to Help Your Buyers & Sellers Rate Protection from Coldwell Banker Mortgage can provide that win-win situation for your clients! Whether rates go up or down, with Pre-Purchase Rate Protection, it doesn’t matter! Protect your buyers’ purchasing power by offering them the ability to cap their interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements. Call me to learn more! Stay Informed: What’s in the News “More Strength in Texas Labor Market” from the Texas A&M Real Estate Center

The Texas economy continues to produce more jobs than the national economy, according to the latest report from the Real Estate Center at Texas A&M University.

Texas nonfarm employment rose 2.2 percent from December 2006 to December 2007 compared with the 0.9 percent annual growth rate for the United States.

The state’s seasonally adjusted unemployment rate fell from 4.7 percent in December 2006 to 4.5 percent in December 2007.

The state’s mining industry ranked first in job creation, followed by professional and business services, the leisure and hospitality industry and the financial activities industry.

All Texas metro areas except Killeen-Temple-Fort Hood had positive employment growth rates from December 2006 to December 2007. McAllen-Edinburg-Mission ranked first in job creation followed by Tyler, Austin-Round Rock, and Brownsville-Harlingen. Midland had the lowest unemployment rate, followed by Amarillo, Lubbock, Odessa and College Station-Bryan. Marie Funston Mortgage Advisor Coldwell Banker Mortgage Tel.: (512) 691-6757 Fax: (512) 343-1224