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  1. Oil Prices and Mideast Turmoil May Impact Mortgage Rates

    By on March 2, 2011

    mortgage rates and oil prices, interest ratesTurmoil in Libya and Middle East countries may send oil prices up and affect mortgage rates.

    If investors fear that rising oil prices will derail an emerging recovery, they will remove their money from stocks and put it into safer bonds, especially government Treasuries. That will help lower mortgage rates. More bond purchases will push bond prices up and their yields, or their interest rates paid to bond owners, down. Mortgage rates would also decline, since they cannot be lower than government bond rates.

    That’s exactly what’s been happening this week. Oil prices went over $100 a barrel, its highest price since September 2008.  Mortgage rates have declined for three consecutive weeks, with the average rate for the 30-year fixed-rate mortgage declining from 5 percent to 4.84 percent last week.

    Continue Reading…

    Category: Mortgage Interest Rates

  2. Fed Ponders Ending QE2 Interest Rate Easing Effort

    By on March 2, 2011
    mortgage rates, interest rates, Federal Reserve

    US Federal Reserve

    Will the Federal Reserve end its effort to lower interest rates, know as QE2, early or continue it through June as first planned?

    The Fed is about half way through its second round of quantitative easing, or QE2, plan to lower current mortgage rates and other long-term interest rates by purchasing enormous amounts of U.S Treasury bonds. Since the Fed started, QE2 last November the stock market has rebounded and unemployment has fallen from about 10 percent to 9 percent, although the housing market is still struggling.

    “It’s been a success,” Bill Gross, manager of Pimco Fund, told CNBC. After all the stock market is up 25 percent, said Gross, who had criticized QEC earlier. Ending it could be tough. “At the end of June, the biggest bond buyer steps away,” he said. “The markets could have a shock in store.”

    St. Louis Federal Reserve President James Bullard told CNBC should ease off its interest-rate easing plan to see how the economy would fare without it. The Fed could stop slightly short of completing the program and pause while gathering information on how the economy is doing. Continue Reading…

    Category: Mortgage Interest Rates

  3. Americans More Upbeat About Home Prices Despite Wariness Of Homeownership

    By on February 28, 2011

    home buying, home prices, housing marketsAmericans are slightly more upbeat about housing markets even though they remain leery of investing in a home and pessimistic about the overall economy. And younger Americans, Hispanics, and African-Americans are generally more positive about homeownership than others, despite being hard hit by the housing downturn.

    So says Fannie Mae’s latest national housing survey.

    According to the survey:

    • Seventy-eight percent of those surveyed believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010.
    • Almost two-thirds believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.
    • Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment
    • More than one-third of Hispanics (34%) and African-Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.

    Although Americans are slightly more optimistic about home values increasing, they are more wary of home buying, the survey shows. The percentage of Americans who believe that buying a home is a safe investment fell from 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment. Continue Reading…

    Category: Housing Market

  4. Nationwide Foreclosure Settlement In The Works Involves Loan Modifications

    By on February 24, 2011

    Federforeclosure settlement loan modificationsal agencies and state attorneys general are reportedly working on a comprehensive deal to force banks to write down principal balances and resolve foreclosure problems.

    If an agreement is reached, the results could be huge. Banks would reduce billions of dollars worth of principal balances, and states would end their investigations of bank foreclosure practices, possibly allowing foreclosures to go ahead.

    Both The Wall Street Journal and The Washington Post had articles on the possible deal in the works today. In additional to mortgage principal write downs, a settlement could cover fines for improper foreclosure proceedings being investigated by state attorneys general.

    Reaching a settlement and getting the banks, federal agencies, and state attorneys general to agree would be difficult. The large number of people and the complex issues involved make the talks especially difficult.

    Still, the Post said negotiations are getting closer to reaching an agreement.

    The Wall Street Journal postulated that an agreement could help clear the backlog of foreclosures and help the housing market eventually recover. Continue Reading…

    Category: foreclosures

  5. Realtor Group Accused Of Over-Counting Homes Sales

    By on February 22, 2011

    NAR home salesThe National Association of Realtors might be over-estimating home sales figures. If it has, the real estate bust was even worse than it seemed and current housing markets may be even worse than believed.

    The problem is that NAR’s much-followed home sales numbers just don’t jive with figures from other housing market researchers.

    CoreLogic, a real estate research firm in Santa Ana., Calif., stated in its U.S. Housing and Mortgage Trends report for this February: “Although it’s been widely reported that the National Association of Realtors’s (NAR) existing home sales data fell only 5% to 4.9 million in 2010, down from 5.2 million in 2009 and flat relative to 2008, the CoreLogic data indicates otherwise.”

    CoreLogic estimated 3.6 million home sales in 2010, a 12 percent decrease from 4.1 million in 2009.

    The report goes on: “Historically, the CoreLogic existing sales data have covered about 85% to 90% of all NAR’s existing home sales data. However, in 2006 NAR’s sales data became elevated relative to the CoreLogic, MBA, HMDA and Census sales related data, and that trend has continued and become more pronounced through 2010.” Continue Reading…

    Category: Housing Market

  6. Higher Mortgage Rates May Result From Obama Plan For Shrinking Fannie Mae and Freddie Mac

    By on February 11, 2011

    Fannie May mortgage rates, Freddie Mac mortgage ratesThe Obama administration’s proposals for winding down Fannie Mae and Freddie Mac might push mortgage rates up.

    The administration released three long-range alternatives for eventually winding down Fannie Mae and Freddie Mac, the government-run mortgage goliaths that support most of the mortgage industry.

    However, its plan revealed today also includes more immediate measures that will probably prompt higher mortgage rates.

    The proposal calls for:

    • Increasing the fees Fannie and Freddie charge lenders for guaranteeing loans. Lenders will be sure to pass those extra costs along to borrowers.
    • Allowing the temporary $729,750 conforming limit to expire on Sept. 30, 2011, and return to $625,000. Fannie and Freddie will not be allowed to purchase or guarantee loans over that size,  and mortgage rates for those loans, known as jumbo mortgages, will probably increase. Continue Reading…
    Category: Mortgage Rate Trends and Analysis

  7. Killing Fannie Mae and Freddie Mac Would Be Bad For Mortgage Rates And Housing Markets

    By on February 9, 2011
    fannie mae mortgage rates, fannie mae housing markets

    Fannie Mae Headquarters

    The role of Fannie Mae and Freddie Mac in supporting housing and keeping mortgage rates low may be one of the big political battles of the year.

    The word is out that the Obama Administration will soon recommend gradually phasing out Fannie Mae and Freddie Mac, which are now under government control.

    Obama may propose reducing the size of mortgages that Fannie and Freddie can buy and guarantee, increasing fees they charge for guaranteeing loans, or increasing the size of down payments they require.

    Those steps could open the door to private investors who purchase and bundle mortgages into bonds. They could also increase mortgage rates for jumbo loans and make qualifying for home loans more difficult for some. Congressmen in California and other high-priced markets will probably protest.

    The rumor is that the administration will call for a 50 percent reduction in the government’s share of the mortgage market over the next five years. Even that goal could be risky.

    Phasing them out quickly could seriously disrupt the economy, especially when housing markets are still fragile and private investors have yet to return to the mortgage business. That’s why anyone with any sense isn’t proposing that Fannie and Freddie be completely eliminated anytime soon. Continue Reading…

    Category: Housing Market, Mortgage Interest Rates

  8. Financial Crisis Inquiry Report Missed Some Major Culprits

    By on January 31, 2011

    financial crisis inquiry commission, mortgage crisis investigationThe Financial Crisis Inquiry Commission’s report released Friday missed some major culprits of the mortgage melt down and financial crisis.

    The commission blame regulators for failing predict or stop the crisis. One of the more colorful quotes from the commission: “What else could one expect on a highway where there were neither speed limits nor neatly painted lines?”

    “The sentries were not at their posts,” the commission concluded.

    Yet the commission didn’t mention that Congress appoints those sentries and passes legislation that gives them their marching orders. Congress dismantled the Glass-Steagall Act that separated Wall Street investment banks and depository banks and remained silent, or even cheered, as then Federal Reserve Alan Greenspan praised “modern capital theory” and said financial should be self-regulated.

    Any regulator trying to clamp down on loose mortgage lending standards or ridiculously high leveraged investment banks five or 10 years ago would have been fighting against prevailing public attitudes against government regulations, not to mention millions of dollars of lobbying money. Continue Reading…

    Category: Housing Market, Mortgage Regulations

  9. 2011 Forecasts: Higher Mortgage Rates, Improving Housing Market

    By on January 13, 2011

    mortgage rates forecasts, housing market forecasts, home sales predictions, Mortgage rates will increase in 2011 while housing markets will improve, predicted experts at the International Builders’ Show in Orlando, FL, this week.

    Freddie Mac Chief Economist Frank Nothaft, a speaker at the conference, predicted that mortgage rates will reach 5.5 percent by the end of 2011, the AP reported. In making that call, he raised his prediction from December when he said rates will stay below 5 percent this year. Check current mortgage rates.

    Nothaft also thinks home prices will bottom out this year. “House prices will bottom out in 2011, and, by 2012, the house-price metric shows a gradual increase,” he said.

    National Association of Home Builders Chief Economist David Crowe, another speaker at the conference predicted that home sales will rise about 26 percent this year. Home construction will increase 21 percent from last year, home prices will stay pretty much the same, and unemployment will fall below 9.4 percent. Continue Reading…

    Category: Housing Market, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates

  10. Vacation Home Market Bouncing Back Robustly

    By on January 13, 2011

    vacation home market, vacation home purchases, vacation home salesWhile housing markets continue to struggle in many areas, the vacation home market is rebounding strongly.

    Vacation home sales in some resort areas are off and running, according to an article in The Wall Street Journal.

    “The proverbial train has left the station. We haven’t felt energy like this in a long time,” a Florida real estate agent told the Journal. “Buyers sense that they’ve been on the sidelines long enough.”

    Signs of an improving economy, a rebounding stock market, and reasonable prices are prompting more sales.

    Buyers can make cash offers by drawing on savings or taking out a second mortgage or cash-out refinance on their primary residence. A mortgage on a primary residence will have a lower mortgage rate than a rate for a second home. Home equity lines of credit (HELOCs) are revolving lines of credit, while home equity loans have fixed amounts and rates.

    Some owners rent out their vacation home for part of the year for extra income. A stronger economy, they hope, will prompt more traveling and more vacation home renters. Continue Reading…

    Category: Housing Market, Mortgage Rates

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