Purchase and refinances applications have increased!

Purchase and refinances applications have increased!

Wow a week without scandal, athlete doping, government fighting (beyond the normal nonsense), stock market craziness or anything else significant.  I don’t know what to do with myself.  I might actually have to write about economic reports this week because there was nothing else to distract me.

Existing home sales for the month of December were unexpectedly lower.  Although lower, they were only down by 1%.  The good news is that existing sales are up 12.8% from a year ago.  In addition, home prices are rising which is a direct reflection of the fact that housing inventory is lower than anyone every anticipated it would be at this point.  According to the National Association of Realtors inventory of existing homes is down to 4.4 months where as in November it was 4.8 months.

The big question being asked is what happened to the millions of homes in shadow inventory that the banks have been waiting for the right time to sell?

It appears that because of all of the mandates, laws and rules banks must follow in regard to foreclosure and loan modifications, the banks have been working closer than ever with homeowners to assist them by either modifying their loan or being more cooperative with short sales  If more homeowners receive assistance than there are less homes for the banks to sell.

Mortgage rates have remained stable and the Mortgage Bankers Association reported that, just as the prior week, purchase and refinances applications have increased.  Purchase apps are up 3% and refinances increased 8%.

The latest FHFA price index is up 0.6 percent for the month of November. This is the strongest rise since June. The Mountain region led all areas in increases by surging 2.1 percent.  Home prices are 5.6% higher than they were a year ago and have reached the highest level since 2006.  Home prices are expected to continue a strong rise throughout 2013 as long inventory continues to remain scarce.

The employment picture continues its pattern of improvement.  First time jobless claims were down to 330K which is the lowest they have been in 5 years.  This does not appear to be an anomaly as we have been witnessing a steady decline over the last 30 days.

JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com

The recovery is moving faster than earlier believed!!

The recovery is moving faster than earlier believed!!

The economy continues to show signs of slow but steady mending.  Housing continues to grow, interest rates remain very low, and inflation is virtually non-existent.  I can end this week’s report with the one previous sentence because it appears that a good portion of our nation could care less.  Almost everyone is focused on these two most important news headlines…

1. Lance Armstrong admits to Oprah that he used performance enhancing drugs.
2. Finding out if Manti Te'o’s knew he was in love with a non-existent person.

It is a sad state of affairs in this country to see the amount of time and energy spent in a single week on the discussion of these two events.  The media and the American people probably spent more time and focus on these two reports than congress spent in total trying to solve the fiscal cliff. 

For starters…millions of American’s found out for the first time that they actually “do” have Oprah Winfrey’s OWN channel on their cable or satellite system.  The amount of people that tuned into the first broadcast of the two part series on Thursday evening is staggering. (I personally did not watch one second of the program because I know how it ends…Lance did drugs!)

Next we have the non-existent girlfriend of Manti Te’o.  Everyone is quick to pass judgment on this young man without knowing the facts.  Once again, my life has not been, and will not be impacted whether his girlfriend existed or not, and quite frankly I don’t care.  What does amaze me though is just how many people actually do care.  (Maybe something is wrong with me).  By the way I know how this story ends also…His girlfriend wasn’t real.

I do know one thing however…there are millions of men and woman in this country that are in relationships today that sometimes wish their significant other didn’t exist.  (Sorry just couldn’t resist)

In regard to economic news that might actually have an impact on your life or business, here is the short version:

• Inflation continues to remain very much under control on the wholesale level.  Consumer prices on the other hand are rising a little more than expected.  According to the Commerce Department, consumer spending was moderately strong in December which posted a 0.3 percent rise, following a 0.1 percent dip in November.
• Mortgage bankers are very busy so far this year as demonstrated by the 15.2 percent jump in applications last week following the 11.7 percent jump in the prior week.
• Housing is still recovering and at moderate pace but the activity in December indicates that the recovery is moving somewhat faster than earlier believed.  Housing starts in December jumped 12.1 percent following a decline of 4.3 percent the month before. The most telling figure is that starts are up 36.9 percent from a year ago.

JJ Mack
916-517-1800
JJ.Mack@apmortgage.com
www.apmcroseville.com

Purchase applications jumped 10% and refinance apps rose 12%

Purchase applications jumped 10% and refinance apps rose 12%

Mortgage rates have retreated off of their steady climb that took place over the last couple of weeks.  Interest rates had risen approximately ¼% but they seem to have stabilized for the moment.  The financing lull from the holidays which saw mortgage applications for both purchases and refinances drop 14.8% and 23.3% respectively turned around for the first week of the year.  Purchase applications jumped 10% and refinance apps rose 12%.

The week had minimal market moving news keeping the stock market trading in a narrow range.  Through end of the trading day Thursday the Dow was up a total of 100 points and was poised to remain somewhat flat for Friday morning.

The focus now has turned from the fiscal cliff to corporate profits.  Earnings season, as it is called, began this week.  Major corporations are releasing their 4^th quarter profits and investors are waiting and listening.  Thus far there have been no major surprises in the profit reports released which has been reflected in the relatively minimal movement in the markets.

The Consumer Financial Protection Bureau released their new proposed rules relating to mortgage lending. As expected when a new rule or law is written, everyone will find a problem with it, except the people who wrote it. 

Both consumer groups and various mortgage lending organizations have all come out saying the rules are detrimental to their side.  Consumer groups say the lenders are getting more protection and lenders are saying it will be harder for them to lend.  Attorneys, industry experts, analysts, mortgage company owners and loan officers are all looking at this new proposed regulation and everyone is trying to figure out how this will impact them.  The release is only about 24 hours old and the new rule is not slated to go into effect until January 10, 2014 so there is still time for things to be modified.

All hopes were that the job market improvement trend would continue however we hit a bump in the road for the first week of 2013.  First time jobless claims were expected to decline but instead increased by 4000 to 371,000.  This continues the trend of claims remaining higher than what is needed for a real recovery in employment to take hold.

It is a new year, but the nonsense on Capitol Hill continues.  Congress has a lot to do when it comes to the budget and yet they are still not making this a priority.  They have less than two months to come up with a budget and I can guarantee that it will come down to the last minute deal being thrown together.

 

JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com

Now is the time to refinance or purchase a home!!

Now is the time to refinance or purchase a home!!

Let’s start 2013 with a little sarcasm if I may…

It never fails, Congress comes up with a deal at the last minute (actually after the last minute) to stave off market self destruction.  As you know the Fiscal Cliff has been temporarily averted.  Congress was able to piece together a deal that was just enough to keep the markets from panicking, but comes nowhere close to solving our country’s fiscal dilemma.

Congress passed the new budget which increases taxes on an estimated 77% of the taxpayers in this country.  As a tax paying citizen of the United States I am not necessarily opposed to the increase, whatever it may be, however my issue is that once again our government has increased taxes but they have done nothing…zero…zilch…nada to reduce our nation’s debt or curtail spending.

In fact the irony of this temporary deal is that a good portion of the tax increase will not go towards deficit reduction, it is going to more increases in spending.  To make matters worse is that the government has already committed to more spending increases than revenue increases.  Bottom line we are going to continue to go further and further into debt.  (Wasn’t this whole long drawn out battle in government about increasing taxes and reducing spending?)

My recommendation to you is get yourself a good accountant to save on as much income tax as you possibly can because it is obvious our government is going to keep reaching into our pockets more and more without ever doing anything to reduce our spending.  (Gee wiz…don’t we seem to be heading down the same path as Europe?  We all know how well that has turned out right?)

I almost forgot to mention that Congress has given themselves two months to address deficit reduction and come to an agreement on how it will be done.  My suggestion, go to Vegas and lay down your bet on the odds that they WON’T get it done in two months.  If they couldn’t do it in two years, what makes you think two more months will make a difference?

In other news that no one seems to be paying attention to except mortgage professionals, real estate professionals, home buyers and home owners, mortgage rates are rising.  In just 3 days since the budget deal was passed mortgage rates have risen every single day.  Despite the government’s efforts to keep interest rates down, investors have more control over the direction of rates than anyone else.  Rates are still incredibly low however you should expect that the trend of rising rates is likely to continue.  In fact the Fed just the other day reported that they are not expecting rates to come back to the historic lows again.

Now is the time torefinance or purchase a home because the odds on the cost of borrowing money along with house price increases is more likely now that we have seen in the past 4 years.

JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com