Breaking Georgia Mortgage Jumbo FHA VA USDA Rates and News

1.06.2010

Latest From : Atlanta RE 5 by 5

Home Buyers Get A Green Light : Pending Home Sales Plunge In November

Posted: 06 Jan 2010 06:45 AM PST

Pending Home Sales November 2009

Just one month after touching a 3-year high, the National Association of Realtors® Pending Home Sales index plunged in November. A "pending" home sale is a home that is under contract to sell, but has yet to close.

The 16 percent drop marks the first retreat in Pending Home Sales since January of last year.

The weak Pending Home Sales data is an indication that Existing Home Sales data will be soft this month. This is because, historically, 80 percent of Pending Home Sales convert to "closed sales" within 60 days, and most of the rest close within 120.

With Pending Home Sales down, the housing market should lose some of its momentum. For today's home buyers, this kind of slack can represent a terrific opportunity.

Home prices are a function of supply and demand; of buyers and sellers. When buyers outnumber sellers, competition leads to bidding wars, ultimately, and higher home prices overall. The imbalance can also create a sense of urgency that results in over-paying for a home.

When buyers are sparse, on the other hand, the psychology of real estate shifts.

Home sellers are keenly aware of foot traffic and requests for second and third showings. Without buyers, their homes can't sell. They also note a lack of general feedback from the market.

It's at this point that seller fear can creep in and it becomes a buyer's best time to buy.

Based on November's Pending Home Sales data, it's clear that home sellers are in abundance right now. Home buyers have leverage.

It may not last.

With mortgage rates easing lower this week, the federal home buyer tax credit still in effect, and the Holiday Season officially over, buyers are getting back to business everywhere.

Plus, with the tax credit deadline of April 30, 2010 fast approaching, buyer activity should increase over the next 4-6 weeks.

The market looks ripe for a buy but don't rush it. Take your time and bid right. But when you're ready, be ready -- once the market momentum shifts back to sellers, you might lose all that leverage you built up through the winter.

1.05.2010

Latest From : Atlanta RE 5 by 5

Looking At The 2010 Predictions For Housing Markets And Mortgage Rates

Posted: 05 Jan 2010 06:45 AM PST

2010 housing and mortgage predictions are guesses 2010 is just a few days old and already the "experts" are making predictions for the year.

Housing calls and mortgage rate predictions run the gamut:

Home prices will fall in 2010
Home prices will rise in 2010
Mortgage rates will rise in 2010
Mortgage rates will rise by a lot in 2010

Given how varied their outlooks, it's clear that the professionals have no better view of the future than the amateurs. An expert can make an educated guess, but it's a guess nonetheless.

Last year, Wall Streeters predicted a 25% pullback in home prices. 12 months later, we know prices didn't fall. Wall Street also predicted higher mortgage rates for 2009. That prediction was fulfilled.

There's a lot of talk on CNBC and elsewhere about what's coming in 2010. Before you take those predictions to the bank, just remember that analysts do a much better job interpreting data from the past than projecting it into the future.

The only thing that's certain right now is that mortgage rates are historically low, the government is giving tax credits to qualified buyers, and there's a lot of good "deals" in housing. Make the most of what's out there today because it will take 12 months for us to look back and know which predictions were right and which were wrong.

Until then, predictions are just opinions and guesses.

1.04.2010

Atlanta Mortgage Rates this week and you

MARKET COMMENT

Mortgage bond prices fell last week pushing mortgage interest rates higher. The bond market was choppy most of the week as thin trading conditions magnified movements. We started the week with rates heading higher Monday. Fortunately there was a bit of a rally Tuesday and Wednesday as the Treasury auctions were decent. Those gains were short-lived as the weekly jobless claims figure wasn’t as bad as expected. The bond market closed early Thursday and was closed the entire day Friday. For the week interest rates rose by about 1/4 of a discount point.
ISM Index data will set the tone for trading this week. The employment report will be the most important release but it doesn’t arrive until Friday. This will be the first full week of trading this year. It will be interesting to see how traders react to the recent spike in rates following the various shortened trading sessions.

LOOKING AHEAD

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Construction Spending	Monday, Jan. 4, 10:00 am, et	Down 0.5%	Low importance. An indication of economic strength. Weakness may lead to lower rates.
ISM Index	Monday, Jan. 4, 10:00 am, et	54.0	Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Factory Orders	Tuesday, Jan. 5, 10:00 am, et	Up 0.5%	Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
ADP Employment	Wednesday, Jan. 6, 8:30 am, et	-75k	Important. A measure of employment. A larger than expected decrease in jobs may bring lower rates.
Employment	Friday, Jan. 8, 8:30 am, et	Unemp. @ 10%, Payrolls unchanged	Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.

THE YEAR AHEAD

This year begins in a similar fashion to last year. Last year at this time 30 year fixed rate mortgage interest rates were historically low. Most pundits predicted little or no opportunities for additional refinancing. Mortgage interest rates did spike higher from time to time throughout the year but overall the Fed did an excellent job of keeping rates in check. Unfortunately now the Fed's $1.25 trillion mortgage backed securities (MBS) purchasing program is nearing the end and the future remains uncertain. The good news is that 30 year fixed rate mortgages remain low but once again future predictions are all over the board.
What will occur in the future, economic recovery or additional weakness will continue to be debated. There is no certainty in predictions. Data can be used to support both sides of the debate. What we can be certain of is the fact that until the economy gains some stability, mortgage interest rates are likely to be volatile. Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, it is often fast and furious. One negative day often erases a week of positive improvements.
It is possible for mortgage interest rates to push lower considering the Fed still has a few hundred billion dollars of MBS purchasing left. However, we are in unprecedented times. The Fed has clearly signaled they want rates to remain low but also want to exit the market. The Fed isn't the only player in the mortgage bond market and there are many others buying and selling the securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain percentage. Rates are determined by the supply and demand for mortgage-backed securities.
The Fed kept rates in check for 2009. The big unknown is how they will exit the market without causing major disturbances this year. While there have been signs of improvement in the housing sector, the last thing we need is higher rates. Without the Fed buying mortgage bonds rates may very well head considerably higher. Now is a great time to take advantage of favorable rates.

Georgia Banks on FDIC Watch LIST

First Bank of Dalton, Dalton, GA; FDIC-09-413b; Issued 11/17/09 - PDF

Bank of Ellijay, Ellijay, GA; FDIC-09-338b; Issued 11/24/09 - PDF

Piedmont Community Bank, Gray, GA; FDIC-08-348b; Issued 11/24/09 - PDF

Northwest Georgia Bank, Ringgold, GA; FDIC-09-234b; Issued 11/20/09 - PDF

High Trust Bank, Stockbridge, GA; FDIC-09-486b; Issued 11/20/09 - PDF

FDIC ORDERS ON BANKS FROM NOVEMBER

Press Releases

FDIC Makes Public November Enforcement Actions; No Administrative Hearings are Scheduled

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in November. No administrative hearings are scheduled.
The FDIC processed a total of 51 matters in November. These included 34 cease and desist consent orders; nine civil money penalties; three prompt corrective action directives; three Section 19 orders; one order terminating an order to cease and desist; and one notice of charges and of hearing.
To view individual orders below, click the link for the PDF next to the order. To view all orders online, visit the FDIC's Web page at http://www.fdic.gov/bank/individual/enforcement/index.html. A list of orders made public today follows.

20 City Housing Index UP 5.3%

Some cities Housing Up 15% From Lows

Using the most recent S&P/Case-Shiller home price data from October, below we highlight how much each city that is tracked has risen from its 2009 lows. The 20-city composite index is currently up 5.3% from its low reached in April. Eleven cities are up more than the composite index, while nine are up less. Tampa and Las Vegas are the only two cities that traded at new lows in October, while Seattle and Charlotte are less than 0.5% away from their lows. On the positive side, San Francisco and Minneapolis are both up about 15% from their lows reached earlier this year. A nice rebound in the market

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : January 4, 2010

Posted: 04 Jan 2010 06:45 AM PST

Non-Farm Payrolls in focus this week Mortgage markets were relatively flat last week during holiday-shortened trading. After starting the week with a Monday surge higher, mortgage rates settled down thorough Tuesday and remained somewhat flat into the early-close for New Year's Eve.

However, as compared to the 4-month low posted post-Thanksgiving, conforming mortgage pricing has now worsened by more than 300 basis points. In English, that means that a December 1 mortgage rate quoted with zero points is available today at a cost of 3 points.

1 "point" is equal to 1 percent of how much you borrow.

If you were shopping for homes or rates last month, you no doubt noticed that pricing zoomed higher to close out 2009. How 2010 starts is anyone's guess. This week will hold the answer.

It's a week light with data, but heavy on importance. The biggest news comes Friday in the form of the December employment report.

Last month, the Unemployment Rate fell for just the second time in 2 years and net job gains nearly turned positive. Both points were bad for mortgage rates because a weak economy has helped keep rates down. Evidence of improvement, therefore -- at least according to Wall Street -- is reason for reversal.

This month, analysts expect a net job gain of zero. If they get it, the psychological effect of the data should cause stock markets to rise and mortgage markets to sink.

A worsening market is bad for rates.

Other data to watch this week is Tuesday's Pending Home Sales report and Wednesday's FOMC November Minutes release. Both can forcefully impact markets and rates.

Today is January 4 -- there's a lot of 2010 to go. However, that won't stop Wall Street from trying to figure it out. As the stock market rises and falls this week, the bond market will likely be in tow. Abrupt movements mean changing mortgage rates and we'll see more of our fair share of it over the next few weeks.

If you're quoted a mortgage rate this week that fits your budget, consider locking it in. Rates may fall in 2010, or they may not. It's a gamble on which you don't want on the wrong side because when rates do rise, they're likely to rise quickly.

Markets can't sustain rates like this in an expanding economy.

12.30.2009

Latest From : Atlanta RE 5 by 5

Home Prices On The Rise, Says The October Home Price Index Report

Posted: 30 Dec 2009 06:45 AM PST

Home Price Index April 2007 to October 2009

More positive signals from housing -- home values are still on the rise.

According to the Federal Housing Finance Agency, after posting its first quarterly increase since 2007 this past September, the Home Price Index rose by another 0.6 percent in October.

Prices are up in 4 of the last six months.

But before we take the stats to the proverbial bank, it's important that we recognize the Home Price Index for its shortcomings.

HPI only accounts for homes with mortgages backed by Fannie Mae or Freddie Mac
HPI only accounts for re-sold homes -- newly-built homes are excluded
HPI aggregates national data whereas real estate markets are local phenomena

On a broad scale, the Home Price Index can be useful, but it doesn't specifically apply to any specific U.S. market. For that, analysts tend to turn to the Case-Shiller Index, a privately-produced report that assesses home values in 20 cities nationwide.

The good news for home sellers is that Case-Shiller's most recent report corroborates the government's conclusion -- home values are creeping back.

Home buyers should pay attention. When public and private sector data is in accord, markets tend to go along and, looking back, housing likely bottomed in February 2009. Since then, home sales are up, home supplies are down, and values have increased in most U.S. markets. Furthermore, so long as mortgage rates remain low and government stimulus is in place, the trend should continue through at least the first quarter of 2010.

If you're on the fence about buying a home right now, or wondering about timing, consider your options vis-a-vis today's market. Into the new year, homes won't likely be as cheap to buy, nor to finance.

12.29.2009

Latest From : Atlanta RE 5 by 5

Moving To A New City? Check The Local Cost Of Living First.

Posted: 29 Dec 2009 06:45 AM PST

New town, new costs. Try a Cost of Living Calculator. It's not only the real estate markets that differ from town to town -- the Cost of Living does, too.

Insurance costs, tax bills and just plain, day-to-day living will dent a household budget differently depending on where that household is. It can be a nerve-wracking fact for families moving across state borders.

As an aid for the budget-aware, Bankrate.com keeps a Cost of Living Comparison Calculator on its website. The calculator asks 3 questions: (1) Where do you live now, (2) To where you are moving, and (3) What is your salary. It then spits out a detailed, 58-item cost comparison list between the two cities.

Some of the key costs compared include:

Everyday groceries
Energy bills
Routine healthcare
Home ownership
Clothes
Sporting goods

The Cost of Living Comparison Calculator is thorough, with data culled from the ACCRA. You'll be surprised at how granular the list can get. On the ACCRA website, you can buy a similar report for $5.

On the Bankrate.com site, the data is free.

12.28.2009

Credit scores and what influences them, according to Fair Isaac

Credit scores and what influences them, according to Fair Isaac

Liz Pulliam Weston was able to crack open Fair Isaac a bit and got them to reveal a little bit more on their scoring model.


	Effect on a 680 score	Effect on a 780 score
Maxed-out card	-10 to -30	-25 to -45
30-day late payment	-60 to -80	-90 to -110
Debt settlement	-45 to -65	-105 to -125
Foreclosure	-85 to -105	-140 to -160
Bankruptcy	-130 to -150	-220 to -240

The "damage points" information, as revealed here, will be made available through FICO at its myFICO.com Web site starting this weekend.
Besides giving out how much your score will DROP, there is still not much know about how the starting score is calculated. The statistical model (aka FICO Score) used by all three credit bureaus and in some form or other by all banking institutions was developed by Fair Isaac. This scoring model did not start out to be the industry standard, but since it was the most complete model used available at the time when the banking industry was interested in such information, it became an integral part of the credit granting process. The model took years to develop and Fair Isaac has all kinds of empirical data to back up the accuracy of their model. The lending industry, who finds comfort in numbers anyway, gets a warm, fuzzy feeling of fairness: since most everyone uses it, it gives the impression of everyone being measured by the same yardstick.
Why WHY WHY doesn't Fair Isaac tell anyone exactly what goes into the model?
The company maintains that their model is a proprietary system, and it is protecting itself - if it gave away the product, how would Fair Isaac make money? I can see their point, to a certain extent, but many (if not most) American and Canadian consumers are at the mercy of this statistical model. Most people don't realize that the credit scoring model is a product being sold to lending institutions and, of course, the credit bureaus.
Aside from the fact that the mystery of the model is a big source of unfairness, is the model itself unbiased? At CreditInfoCenter, we get lots of questions about this, like "how do you raise your credit score?" What we found out is that lots of what goes into the score calculation is beyond the control of the consumer. Therefore, many people with a low credit score may be able to do nothing about it.

OK, let's get right down to the actual numbers. While we can't give you the whole math model, we can sure give you a piece of it.

At the credit scoring conference held by the FTC in July 1999, Fair Isaac gave the opening presentation and went over in detail some of the things used in calculating your score. The information I am giving out is based on the huge slide presentation given out by Fair Isaac at the July meeting.
Factors used to score you, in order of importance (information marked with a * is obtained from an application, not considered in a credit bureau score):

Major derogatory items on your report (bankruptcy, collections, foreclosure, slowpays)
Time at present job
Occupation (Professionals are given heavy weight)^*
Time at present address
Ratio of balances to available credit lines (the lower the better)
Are you a homeowner? (if you are, this is heavily weighted)^*
Number of recent inquiries
Age (50+ is the best)
Number of credit lines on your report
Years you have had a credit in the credit bureau database

So is this fair? Have you noticed that only two of the above items are entirely within your control? And what if you don't care for a professional (whatever that means) occupation?

According to the above scoring model, to get the highest score, you would have to: a) be at your job for a long time, b) be in a a professional occupation (like lawyer, doctor, banker, corporate officer, etc. - does webmaster count?), c) have lived in the same home (that you own, of course) for over 10 years, d) have had credit and loans for many years, e) be at least 50 years old, f) have almost no debt, g)and not have applied for any new loans for the last two years. Oh yeah, and h) have perfect credit.

Here are some of the actual numbers used to calculate your credit, but Fair Isaac says it isn't the whole model (which I do believe.)

Own/Rent	Own	Rent	Other	No Info
Own/Rent	25	15	10	17
Years at Address	<.5	.5-2.49	2.5-6.49	6.5-10.49	>10.49	No Info
Years at Address	12	10	15	19	23	13
Occupation	Professional	Semi-Prof	Manager	Office	Blue Collar	Retired	Other	No Info
Occupation	50	44	31	28	25	31	22	27
Years on job	<.5	.5-1.49	1.5-2.49	2.5-5.49	5.5-12.49	12.5	Retired	No Info
Years on job	2	8	19	25	30	39	43	20
Department Store/ Major Credit Cards	None	Dept St	Maj CC	Both	No answer	No Info
Department Store/ Major Credit Cards	0	11	16	27	10	12
Bank reference	Checking	Savings	Check & Sav	Other	No Info
Bank reference	5	10	20	11	9
Debt Ratios *	<15	15-25	26-35	36-49	50+	No Info
Debt Ratios *	22	15	12	5	0	13
Num Inquiries	0	1	2	3	4	5-9	No Record
Num Inquiries	3	11	3	-7	-7	-20	0
Years in File	<.5	1-2	3-4	5-7	8+
Years in File	0	5	15	30	40
Number of Revolving Trades	0	1-2	3-5	6+
Number of Revolving Trades	5	12	8	-4
%Balances Available *	0-15%	16-30%	31-40%	41-50%	>50%
%Balances Available *	15	5	-3	-10	-18
Worst Credit Derog	No Record	Any Derog	Any Slow	1 Satisf Lines	2 Satisf Lines	3 Satisf Lines
Worst Credit Derog	0	-29	-14	17	24	29

Terms:

Bank reference
Whether or not you have a savings and checking account. How would the Fair Isaac model know about your income? The only place would be off an application.
Debt Ratios
Ratios of monthly credit obligations (credit cards, mortgages, car loans (not food, insurance, utilities) over monthly gross (before taxes) Income. Example: Your credit card bills, and car loans total $1,000/month. Your monthly gross income is $4,000/month. Your debt ratios would be 25% or 25. How would the Fair Isaac model know about your income? The only place would be off an application.

% Balances Available
This refers to amount of available credit you have left on revolving credit, like credit cards. It is calculated by dividing your total credit used (over all of your cards) by the total credit limits (over al of your cards) you have. So if you have a total unused credit card limit of $10,000 and you have used $2,000 worth of this available credit, you have used 20% of your available credit.
Years in File
Number of years you have been in the credit bureaus files, approximately the same amount of time you have credit (though of course, not necessarily).
Here is the entire Fair Isaac presentation on the FTC web site.

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : December 28, 2009

Posted: 28 Dec 2009 06:45 AM PST

Vacation weeks can lead to mortgage market volatility Mortgage markets made a 4-day losing streak last week on thin holiday volume and overall economic optimism. It was awful news for rate shoppers because mortgage rates were higher every day last week.

The holiday-shortened week marked the third out of 4 during which rates worsened and last week's action happened to be especially harsh. Monday's action was the worst for rates since July, for example.

Tuesday's was only slightly less worse.

Today, conforming, 30-year fixed mortgage rates have reached at a 15-week high -- well off the lows set in early-December.

Normally, when mortgage markets worsen this badly, this quickly, it's because of strong economic data, or growing inflationary expectations. Last week saw neither.

Existing Home Sales showed strength, but was offset by New Home Sales
3rd Quarter GDP showed the economy growing at a slower-than-expected pace
Inflationary data wasn't as high as was expected

Furthermore, consumer confidence didn't rise as planned.

And yet -- stock markets gained. All 10 sectors improved and they did so at the expense of mortgage bonds.

This week is again holiday-shortened so expect the same low-volume, high-volatility trading as last week. There's few data releases save for Tuesday's Case-Shiller Index. Therefore, watch for momentum trading in either direction.

Markets close early Thursday and re-open Monday, January 4, 2010. If you need to lock a rate, make sure of your loan officer's hours.

12.25.2009

Latest From : Atlanta RE 5 by 5

There's A Very Good Reason Why The New Home Sales Data Plunged In November

Posted: 24 Dec 2009 06:45 AM PST

New Home Sales Nov 2008-Nov 2009 One day after November's Existing Home Sales report blew away estimates, the Census Bureau's related New Homes Sales report failed to impress.

A "new home" is a home that is newly-constructed; not bought as a resale.

In a lackluster showing, New Home Sales dropped 11 percent in November, falling to the lowest levels since April. Furthermore, the all-important "months of supply" climbed by a half-month to 7.9.

The press pounced on the figures and if you only read the headlines, you'd think that housing had cratered. Some of the angles were quite bold, even:

Weak U.S. Home Sales Show Recovery's Shakiness (Reuters)
New Home Sales Plunge In November (CNNMoney.com)
Housing Forecast : Off Life Support, Still In Critical Care (CBS News)

These headlines, although technically accurate, only tell half the story, however. The other half relates to November 30's role as the original First-Time Home Buyer Tax Credit ending date.

See, different from home resales, when a contract is written on a newly-built home, the home is rarely finished. According to the Census Bureau, just 1 in 4 new homes are sold "move-in ready". The other 3 of 4 are in various stages of construction when a buyer signs on the dotted line.

Some have yet to break ground, even.

Regardless, it's at this date of signing that the Census Bureau counts the home as "sold" -- not at the actual closing. This is the main driver of the November New Home Sales data dip.

First-time home buyers would have risked up to $8,000 in federal tax credits if they bought a newly-built home and it wasn't ready for move-in by November 30, 2009. And it wasn't until November 5 that the credit was officially extended.

Suddenly, first-timers representing more than half of last month's Existing Home Sales isn't so shocking. Buying new carried a lot risk.

There's always more to the story than the headline. Sometimes, you have to dig deeper. Looking back over 10 months, the housing market is on a steady course of improvement. November's New Home Sales data -- although weak -- is not terrible.

Despite what the papers might say.

12.23.2009

Latest From : Atlanta RE 5 by 5

Home Inventories Plummet, Foreshadowing Higher Prices By Spring 2010

Posted: 23 Dec 2009 06:45 AM PST

Existing Home Sales Nov 2008-Nov 2009 Home resales are soaring.

For the 4th consecutive month, the Existing Home Sales report revealed what today's buyers and sellers already know -- there's a lot of buyer activity right now.

Existing Home Sales surged 7-plus percent in November, posting its largest number of recorded sales in 33 months. Sales volume is up 44% higher versus last year.

It's another example of the housing market in recovery.

There were other interesting statistics buried in the November data, too. According to the National Association of Realtors:

51 percent of home buyers were first-timers
Distressed properties accounted for one-third of all sales
The median home sale price rose slightly

But of all the stats from the November Existing Home Sales report, perhaps the most important one is the one showing home supplies falling to 6.5 months. It's nearly half of the home supply available last November.

The rapid run-off of inventory throughout 2009 is more than a trend at this point and suggests higher home valuations in 2010. Especially because mortgage rates are low, tax credits are available, and the press is giving housing positive coverage.

You shouldn't feel rushed to buy, but you probably don't wait too long, either. The best deals of 2010 may be gone before that Spring Buying Season even starts.

12.22.2009

Latest From : Atlanta RE 5 by 5

When It's A Holiday Week, Mortgage Rate Shoppers Should Be Extra Vigilant

Posted: 22 Dec 2009 06:45 AM PST

Vacation weeks can lead to mortgage market volatility

Mortgage pricing worsened Monday, driving mortgage rates to their highest levels since October.

The day's action was drastic, too.

Some banks issued as many as 3 rate sheets Monday -- each worse than the preceding and one reason why rates got so bad, so quickly, is because this week marks the beginning of mini-Vacation Season on Wall Street.

Between now and January 4, 2010, be prepared for big swings in pricing from day-to-day. Shopping for a mortgage could be a challenge.

The relationship between vacation days and mortgage rate volatility is rooted in how mortgage rates are "made".

Conforming mortgage rates are based on the price of mortgage-backed bonds, a security that is sold on Wall Street
Mortgage-backed bonds can't sell without a bond buyer and a bond seller agreeing to a specific sale price

So, during vacation week, when the total number of market participants are less, there are fewer opportunities for buyers and sellers to meet at a specific price. As a result, bond prices rise and fall with a higher velocity than on a "normal" day. Rallies and momentum plays are exaggerated, too.

Now, mortgage market action like this can work in your favor, or it could work out of your favor. Unfortunately, on Monday, rates moved out of favor.

This rest of this week is stacked with market-moving economic data. The data could be better-than-expected, or worse-than-expected. Either way, markets will react a little more feverishly than normal. Therefore, if you have a chance to lock a favorable rate, consider taking it.

Before long, the rate could be gone.

12.21.2009

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : December 21, 2009

Posted: 21 Dec 2009 06:45 AM PST

Fed Funds Rate (Dec 2006 - Dec 2009) Mortgage markets improved last week as pricing followed a roller coaster-like pattern. After touching a 6-week high Tuesday, rates rallied to weekly lows Thursday, and then jumped back higher Friday.

Despite the improvement last week overall, mortgage pricing remains significantly worse from the all-time lows set in late-November.

Oddly, last week's most prominent mortgage-related story wasn't the most influential one.

On Wednesday, the Federal Open Market Committee adjourned from a two-day meeting. It voted to leave the Fed Funds Rate unchanged from its current target zone of 0.000-0.250 percent. This wasn't news, per se -- markets expected the "no change" vote.

However, in its accompanying press release, the Fed appeared more rosy in its economic outlook, citing improving labor markets and low levels of inflation. Results like this are a mixed bag for rate shoppers, but is generally welcomed as good news.

Rates were unchanged after the FOMC release.

The bigger story last week comes from Greece.

Concerns for the country's debt burden have been in play for weeks, but last week, Standard & Poor's officially downgraded Greece's debt rating. The move triggered concerns regarding broader Eurozone debt, especially considering the recent issues in Dubai.

U.S. mortgage markets benefitted from Greece's troubles as "safe haven" attracted investors, driving down rates Thursday afternoon.

Debt concerns should remain in focus this week. Furthermore, there's a bevy of domestic data that could swing rates in either direction, too. Most notably, watch for Tuesday's housing data, Wednesday's inflation data, and Thursday's consumer confidence data. Each can be a powerful influence on rates.

There will be less volume on Wall Street because of Christmas and less volume tends to spur mortgage rate volatility. Be wary of swings in either direction.

Markets close early Thursday and will be closed Friday.

12.18.2009

Latest From : Atlanta RE 5 by 5

Housing Starts Jump; Home Sellers Lament.

Posted: 18 Dec 2009 06:45 AM PST

Housing Starts Dec 2007-Nov 2009 Housing Starts jumped last month as builders got back to business. It's a telling sign for the economy, but bad news for next season's sellers.

With more homes coming online, home prices may be slow to rise nationwide.

A "Housing Start" is a privately-owned home on which construction has started. In November, starts rose by nearly 9 percent while remaining within the same tight range we've seen since June.

More interesting that Housing Starts, though, is the accompanying data for Housing Permits. After a 5-month plateau, Housing Permits finally broke through, posting its largest number in 12 months.

This, too, bodes poorly for sellers.

Housing permits are precursors to housing starts so because the number of permits are higher today, we expect that the number of starts will be higher just a few months from now.

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.

More permits means more starts which, in turn, leads to a larger home inventory. And when home supplies grow faster than the home demand, prices fall.

Throughout the early part of 2010, low mortgage rates and federal tax credits should help hold demand high but if builders flood the market with new, quality product, sellers may find that they've lost some of their leverage.

For home buyers, the rise in starts is welcomed.