St. Louis Real Estate Blog

August 7th Daily Rate Lock Advisory
August 7th, 2008 12:19 PM
 


Thursday's bond market has opened in positive territory following sizable stock losses. The stock markets are reacting to weak earnings news as the Dow fell 130 points and the Nasdaq lost 9 points. The bond market is currently up 16/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point over yesterday's morning rates.

The Labor Department gave us last week's unemployment figures early this morning. They reported that 455,000 new claims for benefits were filed when analysts had predicted 420,000. This was a 6 year high for new claims and raises concerns that the employment sector is quickly weakening. This is good news for bonds and mortgage rates, however, since this data tracks only a week's worth of filings it is not considered to be of high importance to the bond market.

Yesterday's Treasury auction went fairly well and led to afternoon buying in bonds. Today's sale will bring 30 year bond s to market and if investor demand is also strong we could see afternoon improvements in bonds again today. Results of the auction will be posted at 1:00 PM ET.

Employee Productivity and Costs data for the second quarter will be released early tomorrow morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.5%. A higher than expected reading could help improve bonds, leading to lower mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closin g was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 7th, 2008 12:19 PMPost a Comment (0)

August 27, 2008 Daily Rate Lock Advisory
August 27th, 2008 3:01 PM
 


Wednesday's bond market has opened in negative territory following a much larger than expected jump in durable goods orders. The stock markets are showing gains with the Dow up 62 points and the Nasdaq up 12 points. The bond market is currently down 6/3l, but we will likely see this morning's mortgage rates improve slightly due to strength in bonds late yesterday.

Yesterday's FOMC minutes release indicated that the Fed does not feel interest rates are too low, keeping open the possibility of more rate cuts to stimulate economic activity in the future. However, this likely could only come if inflationary pressures eased enough for the Fed to feel comfortable with the move. But, the minutes did indicate a rake hike is more likely to be the next move than a possible reduction to key short-term interest rates.

The Commerce Department gave us July's Durable Goods Orders this morning, saying that new orders for big-ticket items rose 1.3% last month. This was much higher than analysts had expected and indicates that the manufacturing sector was stronger than thought last month. This is generally bad news but this data can be quite volatile from month to month so its impact on rates this morning has been fairly minimal.

Thursday's only data is the first revision to the 2nd Quarter Gross Domestic Product (GDP). Last month's preliminary reading revealed a 1.9% pace of growth. A smaller than expected upward revision should help lower mortgage rates Thursday, especially if the inflation portion of the release does not get revised higher. Current forecasts are calling for a 2.7% annual rate. There will be a final revision issued next month, but it probably will have little impact on mortgage rates.

The Labor Department will post weekly unemployment claims numbers tomorrow morning also. Analysts are expecting to see 425,000 new claims, which would be a decline from the previous week.

If I we re considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 27th, 2008 3:01 PMPost a Comment (0)

August 25, 08 Daily Rate Lock Advisory
August 25th, 2008 2:55 PM
 


Monday's bond market has opened in positive territory after the stock markets kicked the week off in selling mode. The stock markets are showing fears of the banking crisis after another bank failed over the weekend. This has the Dow down 127 points and the Nasdaq down 34 points. The bond market is benefiting as investors seek safe-haven in bonds. This has pushed the bond market up 28/32, which will likely improve this morning's mortgage rates by .125 - .250 of a discount point.

Today's only economic data was July's Existing Home Sales report that showed a larger increase in home resales than was expected. This could be considered bad news for bonds and mortgage rates, however, this data is not considered to be of high importance to the markets. Therefore, the stock losses are influencing bond trading more than this data is.

The Conference Board will post this month's Consumer Confidence Index (CCI) at 10:00 AM tomorrow. This index measures co nsumer willingness to spend, which is important because consumer spending makes up two thirds of the U.S. economy. A decline would indicate that consumers may not be making large purchases in the immediate future. That sign of economic weakness should drive bond prices higher, leading to lower mortgage rates tomorrow. It is expected to show a reading of 53.0, which would be an increase from July's 51.9.

Also scheduled for release tomorrow is July's New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand like Monday's Existing Home Sales report does and also usually doesn't have a major impact on bond prices or mortgage rates.

The third and final event for tomorrow is the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show so me divisiveness by its members. It will be interesting to see some of the Fed member's views on the economy and inflation and if they will hint what the Fed's next move may be.

Overall, it is a shortened week and will probably be a very busy week for mortgage rates. The bond market is expected to close at 2:00 PM ET Friday ahead of the Monday holiday. We will likely see the most activity in rates tomorrow morning, but Wednesday and Thursday are also important. If we manage to get weaker than expected results in the key reports and the Fed minutes don't show any surprises, we should see mortgage rates close the week lower than tomorrow's opening levels.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... T his is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 25th, 2008 2:55 PMPost a Comment (0)

August 22, 2008 Daily Rate Lock Advisory
August 22nd, 2008 11:57 AM
 


Friday's bond market has opened in negative territory following a strong open in stocks. The stock markets are posting sizable gains during morning trading with the Dow up 180 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

There is no relevant data scheduled for release today, but Fed Chairman Bernanke did make a speech this morning at a conference in Wyoming. In it he implied that the problems in the credit markets may not be over and that they will continue to affect the economy. He added that the drop in oil prices was encouraging and should help ease inflation concerns.

Generally speaking, his words did not come as a surprise to many. They did however, help some to push back their estimated date of a Fed rate increase. Many had predicted the Fed would raise rates sometime this fall to help control inflationa ry pressures, but now feel that the increase may not come until the first half of next year. But, today's negative open in bonds is more a result of the stock gains than his speech.

Next week has a fairly busy calendar with economic data scheduled for release each day. None of the reports are considered to be extremely important, but a couple of them are important enough to affect mortgage rates if their results differ from forecasts. The week starts off fairly light with July's Existing Home Sales report late Monday morning. It is one of the least important reports of the week, but since it is the only one scheduled for that day we may see enough of a reaction in the markets to affect mortgage pricing if it varies greatly from forecasts.

It appears there are seven reports scheduled for release next week that are worth watching, in addition to the minutes from the last FOMC meeting. Look for more details on next week's events in Sunday's weekly p review.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 22nd, 2008 11:57 AMPost a Comment (0)

August 21,2008 Daily Rate Lock Advisory
August 21st, 2008 5:52 PM
 


Thursday's bond market has opened in negative territory despite stock weakness and weaker than expected economic data. The stock markets are posting losses with the Dow down 72 points and the Nasdaq down 21 points. The bond market is currently down 6/32, but we will likely still see an improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength late yesterday.

Neither of today's economic reports were considered to be highly important to the markets. The Labor Department said that 432,000 new claims for unemployment benefits were filed last week. This was a little lower than expected, but not enough of a difference to affect trading or mortgage rates because the figures cover only a single week.

The Conference Board gave us some favorable news with the release of their Leading Economic Indicators (LEI) for July. Today's posting showed a drop of 0.7% in the indicators, which was a much bigger drop than ma ny had expected. This means that economic activity is expected to slow rather quickly in the next three to six months. That eases inflation concerns and helps keep mortgage rates lower.

There is no relevant data scheduled for release tomorrow, leaving the stock markets to be the biggest influence on bonds. Fed Chairman Bernanke will be making a speech at a Kansas City Fed gathering at 10:00 AM tomorrow. There is no question and answer period expected, but if Mr. Bernanke does say anything that hints at the Fed's next move, the markets may react accordingly. However, I suspect that this speech will not be a market-mover.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of wh at I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 21st, 2008 5:52 PMPost a Comment (0)

August 18, 2008 Daily Rate Lock Advisory
August 18th, 2008 11:26 AM
 


Monday's bond market has opened up slightly following a negative open in stocks. The stock markets are starting the week in the red with the Dow down 56 points and the Nasdaq down 12 points. The bond market is currently up 3/32, which should keep this morning's mortgage rates near Friday's levels.

There is no relevant economic news scheduled for release today. However, there are two reports scheduled to be posted tomorrow morning. The first is July's Producer Price Index (PPI) that gives us an indication of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for an increase of 0.6% in the overall and 0.2% in the core data reading. A larger increase may renew inflation concerns and push mortgage rates higher tomorrow mo rning. If it reveals smaller than expected increases, we could see mortgage rates improve as a result.

The Conference Board will give us the first data late tomorrow morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm.

The second is July's Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn't considered to be of high importance to the bond market or mortgage pricing and usually does n't cause much movement in mortgage rates unless it varies greatly from forecasts. It is the least important of the week's reports and is expected to show a sizable drop in new starts.

The Conference Board will give us the last piece of data for the week late Thursday morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm. Current forecasts are calling for a decline of 0.2% in the index.

Overall, look for tomorrow to be the busiest day of the week with the P PI being released. The rest of the week will likely be influenced more by stock prices than anything else, which may be quite volatile. Therefore, keep an eye on the markets and maintain contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 18th, 2008 11:26 AMPost a Comment (0)

St. Louis one of top 10 cities to buy a home in
August 15th, 2008 6:23 PM
 
 
 
 
 
For the second week running, the St. Louis Post-Dispatch has reported that St. Louis placed 3rd out of a list of 40.
 
Forbes Magazine surveyed the 40 largest metropolitan areas looking for cities where home prices have appreciated over the last two years. Among the metrics measured were vacancy rates. Forbes gave extra points to cities where rents are significantly higher than a buyer would pay for the same home.

Financially, at least, the best places to buy houses are those where the buying cost is less than renting, tax incentives are attractive, and there's an opportunity to build equity. Texas dominated the magazine's list because of its healthy job market and growing tax revenues.
 
Here are the 10 cities that topped Forbes' best-places-to-buy list:
  1. Houston, TX
  2. Austin, TX
  3. St. Louis, MO
  4. Philadelphia, PA
  5. San Antonio, TX
  6. Dallas, TX
  7. Charlotte, NC
  8. San Francisco, CA
  9. Jacksonville, FL
  10. Atlanta, GA
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 15th, 2008 6:23 PMPost a Comment (0)

August 15, 2008 Daily Rate Lock Advisory
August 15th, 2008 4:35 PM
 


Friday's bond market has opened in positive territory despite modest stock gains and stronger than expected economic news. The stock markets are showing early gains with the Dow up 42 points and the Nasdaq up 10 points. The bond market is currently up 7/32, which will likely improve this morning's mortgage rates slightly.

There were two pieces of data released this morning. The first was Industrial Production data for July, which showed an increase of 0.2%. That was higher than expected and indicates that manufacturing activity was stronger than thought. This is bad news for the bond market and mortgage rates, but since this data is considered only moderately important, its impact on rates has been minimal.

The second report of the day was the University of Michigan's Index of Consumer Sentiment for August. It showed a reading of 61.7 that was a drop from July's final reading but was stronger than expected. The higher level of sentiment mean s consumers are more apt to make large purchases than analysts had thought, but again, this was not enough of a variance and the data is not important enough to have much of an influence on this morning's mortgage rates.

Next week brings us only a couple of economic reports for the markets to digest with only one being considered highly important. There is no relevant data scheduled to be posted Monday, but look for ore details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 15th, 2008 4:35 PMPost a Comment (0)

August 14, 2008 Daily Rate Lock Advisory
August 14th, 2008 11:24 AM
 


Thursday's bond market has opened in positive territory despite a larger than expected increase in consumer prices and early stock gains. The stock markets are showing noticeable gains after initially opening in the red. The Dow is currently up 115 points while the Nasdaq has gained 22 points. The bond market is currently up 6/32, but we will likely see an increase in this morning's mortgage rates of approximately .125 - .250 of a discount point due to weakness late yesterday.

This morning's release of July's Consumer Price Index (CPI) showed that consumer prices rose 0.8% last month, doubling analysts' forecasts. Fortunately, the core data reading was much closer to forecasts with an increase of 0.3%. These figures raised inflation concerns since they pushed the annual rate of inflation to a 17-year high. However, the bond market seems to be reacting in a much more subtle way than one would expect since inflation is the number one nemesis for long-term se curities such as mortgage related bonds.

The Labor Department reported this morning that 450,000 for new benefits were filed last week. This was a decline from the upward revision of 460,000 of the previous week, but was still higher than the 436,000 that were expected. This can be considered good news for bonds and mortgage rates, however, since this data only tracks a week's worth of claims its' impact on the markets is usually limited.

There are two pieces of data scheduled for release tomorrow. The first is Industrial Production data for July. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see no change in production between June and July. An increase in output could lead to higher mortgage rates tomorrow, while a weaker than expected figur e should help push rates lower.

The second report of the day will come from the University of Michigan who will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher tomorrow.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were fina ncing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 14th, 2008 11:24 AMPost a Comment (0)

Four tips for buying a home in a buyer's market
August 13th, 2008 12:55 PM
By Holden Lewis · Bankrate.com     

Now is a great time to buy a house. Prices are falling, mortgage rates are still affordable, millions of houses are for sale, and sellers are getting anxious.

That's one way of looking at it.

Alternatively, buyers could say: This is a bad time to buy a house. Prices might be lower in a few months. More homes are being added daily and sellers are bound to become more desperate. Why not wait them out?

Falling prices make buyers happy. But they complicates matters. There can be too many choices to sort through. The experts advise to not get sidetracked by market forces you cannot control. Buyers should adhere to these four guidelines instead.

If you find the right house at the right price, buy it
You have to decide whether you will actively shop or hope to stumble on a steal. Predicting the bottom in a local market is difficult. Someone could buy your favorite house out from under you while you passively wait for a better price.  Once that one is gone, it is almost impossible to find another one that measures up to the one lost.

Put a buyer's agent to good use
Search real estate Web sites. If you find a house you like, ask your agent to perform a comparative market analysis. Compare your research with your agent's. If they corroborate each other, fine. If something seems amiss, find out why. An experienced buyers agent is almost surely more accurate.

Negotiate effectively
Avoid the temptation to toss out lowball offers. Sellers won't negotiate if they feel insulted. You have to be able to defend your offer as much as the seller has to be able to defend the asking price.  Having a buyer specialist in your corner will help you get the most for you money.

Avoid gimmicks
You're shopping for a house, not for a Caribbean cruise or a car lease. Sellers who add gimmicky incentives create a distraction to serious negotiation. If there's an incentive, make sure it has something to do with the dwelling.

Source link: Four Tips
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 13th, 2008 12:55 PMPost a Comment (0)

August 13, 2008 Daily Rate Lock Advisory
August 13th, 2008 12:30 PM
 


Wednesday's bond market has opened up slightly after this morning's economic data showed no surprises. The stock markets are showing early losses with the Dow currently down 98 points and the Nasdaq down 8 points. The bond market is currently up 15/32, but we will likely see little change in this morning's mortgage rates due to weakness in bonds late yesterday.

The Commerce Department gave us July's Retail Sales numbers early this morning, saying that sales fell 0.1% last month. This matched forecasts and hasn't had much of an impact on this morning's bond trading or mortgage rates. The portion of the report that excludes more volatile auto sales showed that sales rose 0.4%, which was slightly below forecasts. That could be considered a bit of good news for bonds, but has not influenced trading as of yet.

Tomorrow morning brings us the release of July's Consumer Price Index (CPI). The CPI is one of the most important reports we see each month s ince it measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for an increase of 0.4% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing.

Also tomorrow is the weekly release of new unemployment claims by the Labor Department. This release normally has little impact on the bond market or mortgage rates but due to the previous week's spike to 455,000 claims, analysts will likely be watching this data a little closer than usual. Another increase could send bond prices higher and mortgage rates lower, assuming the CPI doesn't reveal stronger than expected inflation readings.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 13th, 2008 12:30 PMPost a Comment (0)

Aug 12, 2008 Daily Rate Lock Advisory
August 12th, 2008 10:43 AM
 


Tuesday's bond market has opened well in positive territory with the stock markets posting sizable losses during morning trading. The Dow is currently down 121 points while the Nasdaq is down 8 points. The bond market is currently up 15/32, but we will likely see little change in this morning's mortgage rates due to weakness in bonds late yesterday.

Today's only economic news was June's Trade Balance report that revealed a much smaller than expected trade deficit. The report showed that it stood at $56.8 billion compared to the $61.9 billion that was expected. However, this data is not considered to be of high importance to mortgage rates and has not had much of an influence on today's pricing.

July's Retail Sales data will be released early tomorrow morning. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any da ta related to it can cause a fair amount of movement in the markets. A larger decline than expected would indicate that consumers are spending less than previously thought, potentially slowing the economy. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for a decline of 0.1%.

July's Consumer Price Index (CPI) will be released at 8:30 AM Thursday. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for an increase of 0.4% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond ra lly and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 12th, 2008 10:43 AMPost a Comment (0)

THE HOUSING STIMULUS BILL
August 11th, 2008 10:15 PM
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:
  • GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
    View 2009 FHA and GSE loan limit estimates (PDF)
  • FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
    View 2009 FHA and GSE loan limit estimates (PDF)
    FHA Reform Chart (PDF)
  • FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
    FHA Foreclosure Rescue Chart
  • VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
  • Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
  • GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
  • Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
  • National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
  • LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
  • Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
National Association of REALTORS®
Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)

Posted by Melanie Cooper - Team Lead/Listing Specialist on August 11th, 2008 10:15 PMPost a Comment (0)

August 11, 2008 Daily Rate Lock Advisory.
August 11th, 2008 1:49 PM
 


Monday's bond market has opened in negative territory despite early stock losses that are resulting from oil concerns. The Dow is currently down 42 points while the Nasdaq has fallen 5 points. The bond market is currently down 6/32, but we will likely see a slight improvement to this morning's mortgage rates due to strength in bonds late Friday.

There is no relevant economic data scheduled for release today, but the rest of the week brings us five reports for the bond market to digest. The first is June's Trade Balance report tomorrow morning that gives us the size of the U.S. trade deficit. It is the week's least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $61.9 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

July's Retail Sales data will be released early Wednesday morning. This data is very important to the financial market s and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economy. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.5%.

The most important data of the three is July's Consumer Price Index (CPI) at 8:30 AM Thursday. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and en ergy prices. Current forecasts call for an increase of 0.4% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing.

There are two pieces of data scheduled for release Friday. The first is Industrial Production data for July. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see no change in production between June and July. N increase in output could lead to higher mortgage rates Friday, while a weaker than expected figure should help push rates lower.





The second report of the day will come from the University of Michigan who will release its Index of Consumer Se ntiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday.

Overall, look for the most movement in bond prices and mortgage rates the middle part of the week. Wednesday or Thursday will likely turn out to be the most important days. If we get stronger than expected results in the Retail Sales and CPI releases, I fear that we may see mortgage rates spike higher fairly quickly. If those reports do further ease inflation concerns, I will likely be shifting to a float recommendation across the board. But, the risk versus reward comparison short-term still favors the risk side in my opinion, therefore, I am holding the lock recommendations for short-term closings for the time being.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 11th, 2008 1:49 PMPost a Comment (0)

Just Listed! 4420 S Compton Saint Louis, MO 63111
August 7th, 2008 8:24 PM
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$150,000.00
4420 S Compton

Saint Louis, MO 63111

Beds: 3.0 Rooms: 3
Baths: 2.00 Sq. Ft.: 1607.00
Garage: 1.0 Built: 0
 
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Keller Williams Southwest
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Posted by Melanie Cooper - Team Lead/Listing Specialist on August 7th, 2008 8:24 PMPost a Comment (0)

August 6th Daily Rate Lock Advisory
August 6th, 2008 12:26 PM
 


Wednesday's bond market has opened in negative territory as traders continue to digest yesterday's events. Also contributing to this morning's weakness was news of a much larger than expected quarterly loss and mortgage giant Freddie Mac. This raised concerns about the credit markets and the stability of the company and its sister entity Fannie Mae. The concern led to more selling in bonds in this morning and sizable increases to mortgage rates.

The stock markets are mixed with the Dow down 21 points and the Nasdaq up 6 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher by approximately .375 - .500 of a discount point over yesterday's morning rates.

There is no relevant economic news scheduled for release today. Yesterday's FOMC meeting has adjourned with an announcement that there was not a change to key short-term interest rates. It was the second consecutive meeting with no change and was widely expected. The post-meeting statement indicated that the Fed was aware and considered the economic slowdown but also was quite concerned about the threat of inflation. Those words created concern in the bond market since inflation erodes the value of a bond's future fixed interest payments.

The next piece of news is tomorrow's posting of weekly unemployment figures and those are not considered to be of high importance to the markets. This leaves the bond market to be influenced by stock and oil prices. If stocks continue to move higher, we may see bonds suffer and mortgage rates move higher until Friday's data is posted. If the major indexes begin to fall, bond could benefit and drive mortgage rates lower.

Employee Productivity and Costs data for the second quarter will be released Friday morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.7%. A higher than expected reading could help improve bonds, leading to lower mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 6th, 2008 12:26 PMPost a Comment (0)

New Housing Legislation
August 5th, 2008 6:14 PM

The President has signed historic housing legislation that is set to help revitalize the real estate markets. This far reaching legislation will help homebuyers in many ways. For example, starting October 1, distressed homeowners will have the ability to refinance into fixed rate FHA mortgages and present lenders who hold the mortgages will be encouraged to write down the principal balance to 90% of the current value of the home. Details regarding the procedures for this program are expected to be released in the coming weeks. In addition the legislation permanently increases conforming and FHA loan limits, increases VA loan limits temporarily until the end of the year and adds a tax credit for first time buyers. Not all the news was positive as seller-funded downpayment assistance programs will no longer be allowed by FHA. If you are considering purchasing and you need assistance for the downpayment, it is suggested you act quickly because the ban does not go into effect until October 1. Source: Various News Sources

New home sales fell in June, the government said Friday, but the annual rate was stronger than economists expected. The Census Bureau reported Friday that June sales of new single-family homes came in at a seasonally adjusted annual rate of 530,000, down 0.6% from May's revised reading of 533,000. That revision was significant; the original May reading was 512,000. The June figure was much higher than the economists' consensus forecast of 505,000, as compiled by Briefing.com. Despite the monthly sales decrease, economists and investors reacted favorably because the upward revisions in previous months indicated a stronger market than previously believed. Source: CNN/Money

Mark Groman, Executive Officer, Gorman & Gorman Home Loans

Posted by Melanie Cooper - Team Lead/Listing Specialist on August 5th, 2008 6:14 PMPost a Comment (0)

8/5/08 Daily Rate Lock Advisory
August 5th, 2008 11:05 AM
 


Tuesday's bond market has opened in negative territory due to early stock gains. The stock markets are off to a strong start with the Dow up 165 points and the Nasdaq up 30 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point over yesterday's morning rates.

There was no relevant economic news posted this morning. Stock traders are showing their optimism in the economy following another decline in oil prices. High fuel costs have been noted by many sources as a contributing factor to the slowing economy. As oil prices fall well off their recent highs, that concern seems to be easing. This leads to better expectations for economic activity and corporate earnings.

Today's FOMC meeting will adjourn at 2:15 PM ET and is expected to bring no change to key interest rates. If that is indeed the result, I expect top see little reaction in the markets . However, the post-meeting statements seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Accordingly, we may still see some volatility in the markets and possibly mortgage pricing during afternoon hours even if the Fed leaves interest rates alone.

Look for an update to this report after the markets have an opportunity to react to the news.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 5th, 2008 11:05 AMPost a Comment (0)

Aug 4th Daily Rate Lock Advisory
August 4th, 2008 12:25 PM
 


Monday's bond market has opened down slight following the release of stronger than expected economic data. The stock markets are also showing losses with the Dow down 18 points and the Nasdaq down 15 points. The bond market is currently down 4/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.

Today brought us the release of two pieces of economic news. The first was June's Personal Income and Outlays that revealed a 0.1% and a 0.6% rise in spending. Both readings were stronger than expected, indicating that consumers have more money available to spend and are using it. This is bad news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy.

The second report of the day was June's Factory Orders. It showed a much larger increase in new orders than was expected. The 1.7% jump in orders was a full percentage point higher than analysts had expected. That means that the manufacturing sector may be strengthening faster than many had thought, which is also bad news for bonds and mortgage pricing.

The rest of week brings us little economic data that is likely to affect mortgage rates. However, we do have the Federal Open Market Committee (FOMC) meeting tomorrow. The meeting will adjourn at 2:15 PM and is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases.

Bond traders will be watching the post meeting statement very carefully. Generally speaking, a hint of rate hikes in the future will be construed as an indication that inflation is still a concern and would likely lead to bond selling and increases to mortgage rates. If the statement gives an indication that the Fed is not as concerned with inflation as previously noted, the bond mar ket should rally, leading to lower mortgage rates.

Overall, I am expecting to see a choppy week in trading and mortgage rates. We will likely see the most movement in rates tomorrow with the FOMC meeting. Wednesday's Treasury auction may also affect rates during afternoon trading that day, but I suspect that the rest of the week will be driven by stock market gains or losses.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 4th, 2008 12:25 PMPost a Comment (0)

Just Listed! 10 Canisius Ln Florissant, MO 63031
August 3rd, 2008 8:38 PM
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$165,000.00
10 Canisius Ln

Florissant, MO 63031

Beds: 3.0 Rooms: 3
Baths: 2.00 Sq. Ft.: 1590.00
Garage: 2.0 Built: 0
 
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Melanie Cooper - Team Lead/Listing Specialist
Keller Williams Southwest
314-775-2772
www.melaniecooperteam.com
 
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Posted by Melanie Cooper - Team Lead/Listing Specialist on August 3rd, 2008 8:38 PMPost a Comment (0)

Todays Rate Lock Advisory
August 1st, 2008 11:00 AM
 


Friday's bond market has opened down slightly following the release of this morning's economic news that had mixed results but leaned more towards unfavorable to bonds. The stock markets are also in negative ground with the Dow down 74 points and the Nasdaq down 30 points. The bond market is currently down 3/32, which will likely have little impact on this morning's mortgage rates. However, if bonds fall any further we likely will see mortgage rates revise higher later today.

The Labor Department gave us this morning's big news with the release of July's Employment figures. They said that the unemployment rate moved higher by 0.2% to a four year high of 5.7%. Analysts were expecting an increase but only to 5.6%. This was the part of the report that was favorable to bonds.

The negative portion came in the number of payrolls added or lost during the month. Analysts were expecting to see a loss of 75,000 jobs last month, but today's report showe d a loss of 51,000 payrolls. It also revised June's loss upward by 11,000 jobs. However, this was the seventh consecutive monthly decline in payrolls, which indicates that the employment sector remains soft. Generally speaking, that is good news for bonds even though its not as good as we had hoped for.

Today's second release was the Institute for Supply Management's (ISM) Manufacturing Index for July. It showed a stronger than expected reading of 50.0. Analysts were expecting to see a larger decline to a reading of 49.2. This means that more surveyed manufacturers felt business had improved during the month than was expected. That is also considered to be a negative for bonds, but was not enough to create much concern in the market.

Next week brings us a handful of relevant economic reports for the markets to digest, beginning with July's Personal Income and Outlays early Monday morning. This report is considered to be moderate-to-high in import ance and can influence bond trading and mortgage rates. However, I would not expect to see a significant move in rates solely as a result of this report.

The rest of the week includes data on manufacturing and worker productivity along with another Federal Open Market Committee (FOMC) meeting. Look for more details on this meeting and next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008
Posted by Melanie Cooper - Team Lead/Listing Specialist on August 1st, 2008 11:00 AMPost a Comment (0)
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