Posts Tagged ‘ CU Mortgage Division ’

What’s Ahead For Mortgage Rates This Week : May 21, 2012

May 21, 2012
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Existing Home Sales Mortgage bonds improved last week on lingering concerns for the European Union, plus weaker-than-expected economic data here at home. Global investors were net buyers of mortgage-backed securities last week, pushing mortgage rates lower nationwide.

According to Freddie Mac’s mortgage rate survey, conforming 30-year fixed rate mortgage rates slipped to 3.79%, on average, last week for borrowers willing to pay 0.7 discount points and a full set of closing costs.

This is the lowest on-record.

15-year conforming fixed rate mortgage rates also fell to a new all-time low, registering 3.05% with 0.7 discount points and closing costs.

1 discount point is equal to 1 percent of your loan size.

Unfortunately, not all mortgage applicants in Washington State are getting access to Freddie Mac’s posted rates. This is because the “national mortgage rates” assume a 30-day closing window and few banks have been closing loans in 30 days lately. Persistently low mortgage rates have created an appraiser scarcity which, among other reasons, is forcing banks to stretch the traditional 30-day closing window by fifteen days or more.

Longer rate locks carry higher mortgage rates.

For home buyers in Olympia , purchase money loans can often be accommodated in 30 days. For refinancing households, however, the process can take up to 60 days. As a result, refinancing homeowners are finding the 3.79% mortgage rates promised by Freddie Mac’s survey somewhat elusive.

This week, though, as chatter of a European Union dissolution grows, investors are seeking safety of principal. Lately, they’ve been finding it in the U.S. mortgage bond market. As demand for mortgage bonds rises, mortgage rates should fall for both 30-day locks and 60-day ones.

This will aid everyone looking for a home loan.

Other news set for release this week includes April’s Existing Home Sales report and New Home Sales report. Both will be closely watched because housing is tied to U.S. economic recovery. Strong results in either data set may push mortgage rates higher.

For all your home loan needs in Olympia, Washington give William Tuning at call at (360) 539-4687 at CU Mortgage Division.

What’s Ahead For Mortgage Rates This Week : May 14, 2012

May 14, 2012
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Homebuilder ConfidenceMortgage markets worsened slightly last week as positive U.S. economic news overshadowed growing concerns for the Eurozone’s future. Political and economic issues continue to weigh on Greece and Spain, and it’s still unknown how France’s new President will change that nation’s fiscal direction.

Conforming mortgage rates in Washington State edged higher on the week overall.

Last week was light on economic data, but the figures released suggest an improving U.S. economy.

For example, the Bureau of Labor Statistics reported 3.7 million job openings nationwide this past March, marking the highest amount since July 2008. Voluntary separations (i.e. “quit jobs”) increased, too — also at levels not seen since 2008.

Voluntary separations may hint at labor market improvement because employees rarely leave a steady-paying job without the prospect of a new job ahead. Furthermore, the four-week moving average of first-time unemployment claims fell for the first time in a month.

The jobs market is one of two key sectors expected to lead the economy forward this year.

The other is housing and, this week, there will be two key housing reports for Wall Street to review. The first is Tuesday’s homebuilder confidence survey from the National Association of Homebuilders. The second is Wednesday’s Housing Starts data for April.

Mortgage rates may also be affected by the Tuesday release of the Retail Sales report and Consumer Price Index report; and, by the Federal Reserve’s Wednesday release of the FOMC Minutes from its last meeting.

For home buyers and mortgage rate shoppers, mortgage rates remain at all-time lows. According to Freddie Mac, the average 30-year fixed rate mortgage rate nationwide is 3.83% for borrowers willing to pay 0.7 discount points and a full set of closing costs — the lowest rate-and-fee combination in Freddie Mac’s recorded history.

However, low mortgage rates may not last much longer — especially if the Eurozone can reverse course on its ailing economies.

Mortgage rates remain volatile and sensitive to changes in market conditions. If today’s mortgage rates fit your budget, consider locking in.

Mortgage Rates Make New All-Time Lows (Again)

May 11, 2012
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Mortgage rates

Conforming mortgage rates continue to drop.

For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped 1 basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs.

The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount plus closing costs.

Discount points are a one-time, up-front closing cost, based on loan size. 0.7 discount points is equal to 0.7% of the borrowed amount. A home buyer in Tumwater opening a $200,000 mortgage and paying 0.7 discount points, therefore, would be subject to a one-time $1,400 fee paid at closing.

Borrowers wanting to avoid paying discount points can expect higher mortgage rates than Freddie Mac’s reported national average.

Falling mortgage rates are nothing new throughout Washington State. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%.

Low mortgage rates give today’s home buyers additional purchasing power, stretching home affordability to new heights.

Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today’s 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments.

A comparison :

  • February 2011 : $539.88 principal + interest per $100,000 borrowed
  • May 2012 : $467.67 principal + interest per $100,000 borrowed

A homeowner with a $300,000 mortgage at February 2011 30-year fixed rate mortgage rates would save $2,600 annually with a refinance to this week’s low rates. Even accounting for discount points and closing costs, the “break-even point” on savings like that comes relatively quickly.

Mortgage rates can’t be predicted so there’s no guarantee of low rates forever. If today’s rates meet your budget, consider locking something in. Speak with your loan officer at CU Mortgage Division about your options.

For more information give us a call at (360) 539-4687.

What’s Ahead For Mortgage Rates This Week : April 16, 2012

April 16, 2012
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Retail SalesMortgage markets improved last week as a global flight-to-quality continued. With Spain facing questions on its sovereign debt, investors continued to pare exposure to risky assets, sparking demand for the relative safety of U.S. government-backed mortgage-backed bonds.

As a result, conforming and FHA mortgage rates slipped for the third straight week last week.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage available to borrowers in Washington State is down to 3.88% nationwide with an accompanying 0.7 discount points plus “typical” closing costs.

Last week’s reported 3.88 percent rate for the 30-year fixed rate mortgage is within one-tenth of one percent of the lowest, average mortgage rates in Freddie Mac survey history. However, the last time conforming rates were reported in this range, the accompanying, required discount points were higher than last week’s 0.7.

Meanwhile, at 3.11% nationwide with 0.7 discount points plus closing costs, the 15-year fixed rate mortgage rate is equally low. It, too, set a record last week.

It’s a good time to be looking for a mortgage in Olympia. Rates and fees are great.

Last week, markets moved on momentum. This week, they’ll move on data. The economic calendar is busy.

  • Monday : Retail Sales; Housing Market Index
  • Tuesday : Housing Starts
  • Thursday : Weekly Jobless Claims; Leading Indicators; Existing Home Sales

In addition, two Federal Reserve members offer prepared remarks Monday. They will be the last public Fed comments before next week’s 2-day FOMC meeting.

Mortgage rates remain low. Consider calling or emailing your loan officer to learn more about your current financing options.

Housing Starts Stay Strong; Building Permits Rise.

February 17, 2012
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Single-family housing starts

The housing market has carried forward its year-end momentum.

According to the Census Bureau, on a seasonally-adjusted, annualized basis, January’s Single-Family Housing Starts crossed the half-million unit marker for the second straight month.

This hasn’t happened in close to 2 years and is the latest in a series of strong data that suggests the beleaguered housing market has turned a corner — both nationally and locally in your area.

Although single-family starts slipped 1 percent from December, January’s annualized 508,000 figure represents a 16% spike from January 2011 and is the second-highest reading since April 2010 — the last month of 2010′s federal home buyer tax credit program.

A “housing start” is a new home on which construction has started.

The strength of January’s Housing Starts data surprised Wall Street analysts and is partially responsible for Thursday’s unexpected mortgage rate spike.

In hindsight, though, we should have seen this coming.

Earlier in the week, the National Association of Homebuilders announced that homebuilder confidence had climbed to its highest point since 2007 amid builder reports of rising sales volume and the most foot traffic from buyers in more than 4 years.

In addition, builders expect to sell more homes in 2012 than in 2011.

Builders are building and buyers are buying.

Meanwhile, as another sign of housing market strength, the Census Bureau reports that, in January, Building Permits moved to a multi-year high as well. Permits issued for single-family homes in January rose 1 percent from December, a statistic that suggests housing will continue its run through the spring season, at least.

86 percent of homes break ground within one month of permit issuance.

It’s a good time to be a home buyer. Mortgage rates and home prices are low. Housing market momentum, however, is building. If you’re on the fence about whether to buy a home in King County , ask your real estate agent for additional market information.

The cost of home-ownership may never be as low as it is today. Call CU Mortgage Division today for all your home loan needs in Washington State at (360) 539-4687.

With Retail Sales And Consumer Confidence Rising, Home Prices Are Expected To Follow

February 15, 2012
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Consumer Confidence vs Retail Sales (2009-2012)

The U.S. economy continues to show signs of a rebound.

According to the Census Bureau, Retail Sales climbed to $329 billion last month on a seasonally-adjusted basis, excluding automobiles. January’s data marks the 18th time in 19 months that Retail Sales rose, a run that’s increased total sales receipts by 11 percent.

This is big news because Retail Sales accounts for close to 70% of the U.S. economy.

In addition, consumer confidence is rising.

In a separate, joint report from the University of Michigan and Thompson Reuters, it was shown that consumer attitudes toward the economy and the future are improving, primarily the result of recent job gains.

The Survey of Consumers posted its highest value in 12 months.

It is not a coincidence that Retail Sales and consumer confidence both made multi-month highs — the readings are more than loosely linked. As consumers feel more confident about the economy and their personal prospects for the future, they’re more likely to spend money on goods and services, which leads to an increase in consumer spending.

For the housing market, the ramifications are two-fold.

First, from the financing side, an expanding economy is linked to rising mortgage rates. This is because Wall Street tends to chase risk in a growth economy and the bond market offers little in the way of risk. As demand for bonds drops, then, mortgage rates rise throughout Washington State.

Second, rising consumer confidence can lead Tumwater home values higher, too.

Confident consumers are more likely than fearful ones to become home buyers. They’re more likely to stop renting and start buying; more likely to list their home and “move-up” to something bigger; more likely to “take the next step”.

So, as more buyers enter the market at a time when the national home supply is shrinking, the supply-demand balance in housing is shifting toward the sellers. This creates price pressures and should lead to higher home valuations in neighborhoods like King County.

If you have plans to buy a home in 2012, the best time to buy may be now. Today’s mortgage rates are low and so are the home prices — a combination that’s unlikely to last.

Fewer Jobless Claims Suggests Higher Home Prices Ahead

February 14, 2012
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Initial jobless claims 2008-2012

Economists believe the strength of the 2012 housing market will be closely tied to jobs. If they’re right, the housing market is ripe for a boost. It spells good news for Lacey home sellers and may mean the end of bargain-basement prices for buyers.

Since peaking in mid-2009, the number of U.S. workers filing for first-time unemployment benefits has dropped 44 percent. Over the same period of time, the U.S. economy has added more than 2 million jobs and the national Unemployment Rate is down more than 1 percentage point to 8.3%.

Employment’s link to the housing market of King County is both economic and psychological.

To make the economic link is straight-forward. A person with a job earns verifiable income and such income is required in order to be mortgage-eligible. For conventional and FHA purchase loans, for example, mortgage lenders want a home buyer’s monthly income be more than double his monthly debts.

For the formerly unemployed that have since returned to work, having a full-time income makes buying homes possible. It also supports higher home valuations nationwide because home prices are based on supply-and-demand. All things equal, when the number of buyers in a market goes up, prices do, too.

The psychological connection between housing and employment is a tad more complicated, but every bit as important. It’s not just out-of-work Americans that don’t look for homes — it’s fearful Americans, too. People with concerns about losing a job are just as unlikely to shop for homes as people actually without a job. The same is true for people unsure of their prospects for a better-paying job, or their own upward mobility.

A recovering job market can lessen those fears and draw out buyers — especially those who face a loss on the sale of an “underwater” home.

The Initial Jobless Claims rolling 4-week average is at its lowest level since 2008. Fewer Americans are losing jobs, and more are finding permanent placement.

It’s one more reason to be optimistic for this year’s housing market.

Quick Tips : Boost Your Credit Score For Better Mortgage Rates

February 11, 2012
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Credit scores play a huge role in today’s mortgage market — larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.

Mortgage rates are at an all-time low in Washington State. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting “the best rates” from your lender, and getting something worse.

The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics :

  • Why you shouldn’t close a credit card after you pay off a large debt
  • What is the maximize balance to leave on your credit cards, relative to your credit limit
  • What types of credit checks harm your credit scores, and which ones don’t

You’ll also learn how to shop for a mortgage with multiple lenders without having your credit score “dinged”, as well as several proven methods to raise your credit score quickly.

In the end, good credit scores are the result of paying bills on time and staying with your means. Those with the best scores, get the best rates.

Home Affordability Threatened By Friday’s Jobs Report

February 2, 2012
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3-month rolling average NFP

This week, once more, we find mortgage rates are on a downward trajectory. Conforming mortgage rates have returned to near all-time lows. After Friday morning’s Non-Farm Payrolls report, however, those low rates may come to an end.

It’s a risky time for Washington State home buyers and would-be refinancers to be without a locked rate.

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for the month prior. More commonly called the “jobs report”, Non-Farm Payrolls provides a sector-by-sector employment breakdown, and the nation’s Unemployment Rate.

In December 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates for homes in Thurston County are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

The connection between jobs and mortgage rates is fairly direct.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has added jobs over 15 straight months, a streak that’s added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow’s Non-Farm Payrolls shows more jobs created than the estimated 135,000, mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

Existing Home Sales Approach Bull Market Territory

January 24, 2012
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Existing Home Supply 2011The housing market finished 2011 with strength, and is carrying measurable momentum into 2012.

According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December’s Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.

An “existing home” is a home that’s been previously occupied; that cannot be considered new construction.

After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.

At today’s sales pace, the complete, national home inventory would be exhausted in 6.2 months — the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance.

The December Existing Home Sales report contained noteworthy foreclosure and short sale statistics, too :

  • Foreclosures sold at an average discount of 22% to market value
  • Short sales sold at an average discount of 13% to market value
  • Together, foreclosures and short sales accounted for 32% of all home sales

Clearly, “distressed homes” remain a large part of the U.S. housing market.

Furthermore, in its report, the real estate trade group also noted that one-third of homes under contract to sell nationwide succumbed to contract failure last month. That’s up from 9% one year ago.

Contract failure occurs for a multitude of reasons, most notably homes appraising for less than the purchase price; the buyer’s failure to achieve a mortgage approval; and, insurmountable home inspection issues. December’s high failure rate underscores the importance of getting pre-approved as a buyer, and of buying homes in “good condition”.

For today’s home buyer , December’s Existing Home Sales figures may be construed as a “buy signal”. Home supplies are dropping and buyer demand is rising. This is the basic recipe for higher home prices ahead.

If your 2012 plans call for buying a home, consider that home values throughout Washington State are expected to rise as the year progresses. The best values of the year may be the ones secured this winter.