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| December 2009 Case-Shiller Data Shows Battered Markets In Bona Fide Recovery Posted: 24 Feb 2010 06:45 AM PST Using data compiled in December, Standard & Poors released its Case-Shiller Index Tuesday. The report shows home prices down just 2.5% on an annual basis, a figure much lower than the 8.7% annual drop reported after Q3. According to Case-Shiller representatives, the housing market is "in better shape than it was this time last year", but some of the summer's momentum has been lost. 15 of 20 tracked markets declined in value between November and December 2009. Meanwhile, it's interesting to note the 5 markets that didn't decline -- Detroit, Los Angeles, Las Vegas, Phoenix and San Diego. Each of these metro regions were among the hardest hit nationwide when home prices first broke. Now, they're leading the pack in price recovery.
For some real estate investors, that's a positive signal. But we also have to consider the Case-Shiller Index's flaws because they're big ones. As examples:
That said, the Case-Shiller Index is still important. As the most widely-used private sector housing index, Case-Shiller helps to identify broader housing trends and many people believe housing is a key element in the economic recovery. If the markets that led the housing decline will lead the housing resurgence, December's data shows that full recovery is right around the corner.  |
| How You Can Get The Most Accurate, Real-Time Mortgage Rate Quotes Available Posted: 23 Feb 2010 06:45 AM PST You can't get your mortgage rates from the newspaper. Last week proved it. Again. Friday morning, headlines and around the country read that mortgage rates were down 0.04 percent, on average, since the week prior. A sampling of said headlines includes:
The story behind the headline was sourced from the Freddie Mac Primary Mortgage Market Survey, am industry-wide mortgage rate poll of more than 100 lenders. The PMMS has reported mortgage rate data to markets since 1971 and is the largest of its kind. Unfortunately, rate shoppers can't rely on it. See, unlike governments and private-sector firms, when consumers are in need mortgage rate information, they need the information delivered in real-time; for making decisions on-the-spot. Consumers need to know what rates are doing right now. The Freddie Mac survey can't offer that. According to Freddie Mac, the survey's methodology is to collect mortgage rates from lenders between Monday and Wednesday and to publish that data Thursday morning. The survey results are an average of all reported mortgage rates. The problem is that mortgage rates change all day, every day. The PMMS results are skewed, therefore, by methodology. And, meanwhile, the issue was compounded last week because mortgage rates shot higher Wednesday afternoon -- after the survey had "closed". The market deterioration ran into Thursday, too -- again, unable to be captured by Freddie Mac's PMMS. Although the newspapers reported mortgage rates down last week, they weren't. Conforming mortgage rates were higher by at least 1/8 percent, or roughly $11 per $100,000 borrowed per month. In some cases, rates were up by even more. Newspapers and websites can give a lot of good information, but pricing is far too fluid to rely on a reporter. When you need to know what mortgage rates are doing in real-time, make sure you're talking to a loan officer. Otherwise, you may just be getting yesterday's news.  |
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