Posts Tagged ‘ Tumwater Washington Mortgage Lender ’

#Economy Expected To Have Added 80,000 Jobs In June

July 7, 2011
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U.S. job growth since 2000

Friday morning, at 8:30 AM ET, the Bureau of Labor Statistics releases its June Non-Farm Payrolls report. If you’re currently shopping for a mortgage, or floating a mortgage rate, be prepared. Mortgage rates can change following the monthly report’s release.

Often, by a lot.

More commonly called “the jobs report“, Non-Farm Payrolls reports on the U.S. workforce by sector, summarizing its findings in terms of total workforce size, and as a national Unemployment Rate. Jobs are considered a keystone in the continuing U.S. economic recovery.

More working Americans means:

  1. More consumer spending, a boost to businesses
  2. More tax collection, a boost to governments
  3. More personal savings, a boost to households

For June, analysts expect the government to report 80,000 net new jobs created, and no change in the 9.1% Unemployment Rate.

Although these figures are slightly below than what can be considered “strong growth”, that’s not what should concern Tumwater rate shoppers. Mortgage markets react to a deviation from estimates more than to the actual results themselves.

This is because Wall Street placed bets in advance of the jobs report’s release. If jobs growth tallies more than 80,000, therefore, it signals better news for the economy than what was expected. This will push banks and investors towards equities, and away from bonds — including the mortgage-backed kind.

With less demand for mortgage bonds, mortgage rates will rise.

Conversely, if jobs growth is less than 80,000, mortgage rates should fall.

Mortgage rates remain near their lows for the year, but if the June Non-Farm Payrolls report beats estimates of 80,000 jobs made in June, look for mortgage rates to spike. The safe move is to lock today.

What’s Ahead For #Mortgage Rates : Week Of July 5, 2011

July 5, 2011
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Jobs will be in focus this weekMortgage markets worsened last week as Wall Street’s renewed optimism pushed equities to their best one-week gain in 2 years. The change in  sentiment was bad news for rate shoppers, however, as investors pored into stocks at the expense of bonds.

Last week, for the first time since February, mortgage rates rose 5 days in a row. By the time bond markets closed for the 3-day weekend, conforming fixed mortgage rates in Washington State had climbed to their worst levels since mid-May.

Mortgage rates are now at 7-week highs.

The biggest reason for last week’s mortgage rate turnaround is that lawmakers in Greece approved a national austerity plan. Reaching an accord on spending cuts and tax increases was a necessary step for the nation-state to avoid defaulting on its debt and falling into bankruptcy.

Until last week, it wasn’t clear whether the Greek Parliament would reach this agreement, and this fear is why mortgage rates were down through May and June. Faloout from a default would have created global economic uncertainty and uncertainty tends to be good for mortgage rates.

With agreement reached, though, that uncertainty is minimized. Mortgage rates are reversing.

This week, the big news will be June’s Non-Farm Payroll report, set for release Friday morning. If jobs growth is stronger-than-expected, stock markets should continue to post gains and mortgage rates should continue to rise.

The jobs report is a market-mover. If you’re floating a mortgage rate and wondering whether to lock, it may be prudent to lock ahead of Friday’s release.

Home Values Climb 0.8 Percent In April

June 29, 2011
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FHFA Home Price Index (From Peak To Present)

Maybe homes in your area are holding value better than we thought.

Between March and April of this year, home values rose 0.8 percent nationally, according to the Federal Housing Finance Agency’s Home Price Index. It’s the index’s first month-to-month improvement since May of last year.

Values are down 19 percent since peaking 4 years ago.

Private-sector data affirms the government’s report.

Tuesday, the S&P’s Case-Shiller Index also showed home values higher by 0.8 percent in April, on a monthly basis. Led by Washington, D.C. and San Francisco, 13 of the Case-Shiller’s 20 tracked markets showed improvement in April.

In March, just 2 markets did.

As a home seller in or near your area , it’s nice to see reports of rising home prices after multiple months of “bad news”. However, the data may not be as rosy as it appears to be. National real estate surveys including the Home Price Index and the Case-Shiller Index are flawed for everyday buyers and sellers.

The biggest flaw is “age”. Both the Home Price Index and the Case-Shiller Index report on a near 2-month delay.

This week, the calendar turns to July. Yet, we’re still discussing housing news from April. The housing market of 60 days ago was very different from the housing market of today. Mortgage rates are different, market drivers are different, and the pool of buyers is likely different, too.

We can’t discuss today’s housing market with “April” in mind. The data is irrelevant.

Another flaw is that both reports are national in scope. Real estate, by contrast, is local.

When we cite the Home Price Index or the Case-Shiller Index, for example, and say “home values rose 0.8% in April”, we’re just giving a national average. On the local level, some markets rose by more, some rose by less, and others actually fell.

People buy homes on a specific block of a specific street in a specific neighborhood. Data for homes like that can’t be captured in a national survey.

The group that gets the most value from the Home Price Index and Case-Shiller is Wall Street and policy-makers. The indices do a fair job of reporting how housing behaves as a whole, but for individuals concerned with buying and selling homes, the best place to find real-time, accurate data is from a real estate professional.

Top 25 Least Expensive U.S. Cities

June 28, 2011
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25 Least Expensive U.S. Cities

A report issued Monday by the U.S. government showed core inflation rising 2.5 percent in the last 12 months for its biggest one-year gain since January 2010.

Everyday living is becoming expensive, it seems.

But there are some U.S. towns in which the cost of living remains affordable — and downright cheap — as compared to the national average. They’re detailed in a BusinessWeek piece titled “The Cheapest 25 Cities In The U.S“.

In comparing costs across 340 urban areas as compiled by the Council of Community & Economic Research, cities in Texas, Arkansas, Tennessee and Oklahoma ranked consistently high. Cities in Hawaii did not.

Take note, though. Although the BusinessWeek piece highlights inexpensive cities in which to live, a low cost of living does not necessarily correlate to a high standard of living. Cost-leader Harlingen, Texas, for example, boasts a poverty rate nearly triple the national average.

Other “Inexpensive Cities” feature similar poverty rates.

The Top 10 “cheapest cities”, as shown by BusinessWeek are:

  1. Harlingen, Texas
  2. Pueblo, Colorado
  3. Pryor Creek, Oklahoma
  4. McAllen, Texas
  5. Cookeville, Tennessee
  6. Commerce-Hunt County, Texas
  7. Brownsville, Texas
  8. Fort Smith, Arkansas
  9. Muskogee, Oklahoma
  10. Springfield, Illinois

And, at the other end of the spectrum, the top 5 most expensive cities/areas were, in order, Manhattan, New York; Brooklyn, New York; Honolulu, Hawaii; San Francisco, CA; and Queens, New York.

Manhattan’s cost of living is more than twice the national average.

The complete list is available at the BusinessWeek website.

What’s Ahead For #Mortgage Rates This Week : June 27, 2011

June 27, 2011
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Fed Funds RateMortgage markets improved again last week on a revised economic outlook for the U.S. economy, and ongoing concerns about Greece and its sovereign debt.

Conforming mortgage rates in Washington State fell last week and now hover near the all-time lows set last November.

Adjustable-rate mortgages are especially low.

There were three big stories last week that will carry forward into this week.

First, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged in its current target range of 0.000-0.250 percent. This was expected. However, the Fed revised its growth estimates for the U.S. economy lower. This was not expected.

Mortgage rates dipped on the news.

Second, Greece moved closer to avoiding insolvency. The nation-state’s parliament must now pass a package of spending cuts and tax increases to appease Eurozone leaders and the IMF. Without passage, though, bankruptcy may be unavoidable.

Worries about Greece’s fate sparked a bond market flight-to-quality. This, too, helped mortgage rates ease.

And, lastly, Thursday, the U.S. and other members of the International Energy Agency chose to release 60 million barrels of oil to the market over the next month. You’ve likely experienced the impact as the gas pump already — gas prices are way down nationwide.

Lower gas prices means fewer inflationary pressures and inflation is the enemy of mortgage rates. Less inflation, lower mortgage rates.

This week, mortgage rates may reverse.

There isn’t much new data due for release — inflation data due Monday, housing data due Wednesday, and a series of confidence reports throughout the week — but there are 3 scheduled treasury auctions that could pull rates up or down.

  • Monday : 2-Year Treasury Note auction
  • Tuesday : 5-Year Treasury Note auction
  • Wednesday : 7-Year Treasury Note auction

If demand is high at any/all of the auctions, mortgage rates should drop. If demand is weak, mortgage rates should rise.

A Simple Explanation Of The Federal Reserve Statement (June 22, 2011 Edition)

June 22, 2011
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Putting the FOMC statement in plain EnglishWednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 10-0 — the fourth straight unanimous vote for the nation’s Central Bank.

In its press release, the FOMC said that the economy is recovering, although “somewhat more slowly” than what was expected. Labor markets have been weaker than anticipated and the Fed believes that is, in part, a result of higher food and energy costs, and supply chain disruptions as a result of “tragic events in Japan”.

Some economic bright spots identified by the Fed include expanding household spending, and increased business investment.

These comments were in-line with what Wall Street expected from Chairman Ben Bernanke and the members of the Federal Open Market Committee.

The Fed stayed on message with respect to inflation, too. It acknowledged inflationary pressures on the economy, but attributed them to rising commodity costs and the aforementioned supply-chain disruption. The Fed expects long-term inflation to be stable.

And, lastly, the Federal Reserve re-affirmed its plan to end its $600 billion pledge to bond markets June 30, and to hold the Fed Funds Rate near zero percent “for an extended period” of time.

Again, no surprise.

Mortgage market reaction to the FOMC statement has been even this afternoon. Mortgage rates in Olympia are unchanged and leaning lower. Note that sentiment can shift quickly, however. If today’s mortgage rates fit your budget, consider locking in your rate.

The FOMC’s next scheduled meeting is August 9, 2011.

Existing Homes Sales Slip In May

June 22, 2011
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Existing Home Sales (2010-2011)Home resales slipped 4 percent in May, falling below the 5,000,000-unit mark on a seasonally-adjusted, annualized basis for the first time since February.

April’s resales were revised lower, too.

Analysts were surprised by the figures because it runs counter to the National Association of REALTORS® monthly Pending Home Sales reports.

The association’s Pending Home Sales Index is purported to be a forward-looking indicator for the housing market because 80% of homes under contract close within 60 days and recent Pending Home Sales readings show an increase in “pending” homes.

This month’s Existing Home Sales, however, fell flat.

May’s drop in home resales wasn’t limited to a particular region or price point, either. All 4 geographic regions lag last May’s results. Five of the 6 valuation ranges fell, too.

  • $0-$100,000 : +6.7 percent annual change
  • $100,000-$250,000 : -21.6 percent annual change
  • $250,000-$500,000 : -16.0 percent annual change
  • $500,000-$750,000 : -11.0 percent annual change
  • $750,000-$1,000,000 : -20.7 percent annual change
  • $1,000,000 or more : -11.0 percent annual change

The Existing Home Sales report wasn’t all bad, however.

Although the months of housing stock rose to 9.3 in May, the number of homes for sale nationwide fell 1%. This suggests that there weren’t as many buyers in May as compared to April — a function of weather, jobs and the economy. Since April, the jobs market and the economy have shown steady, slow improvement and Mother Nature has been less destructive.

Home resales should rebound in June and July, therefore.

If you’re a buyer in today’s market, home supplies are higher and mortgage rates are lower. The combination makes for ample bargain-hunting. There’s excellent “deals” to be found in Lacey. Ask your real estate agent for help in finding them.

Homebuilder Confidence Slips To 9-Month Low

June 21, 2011
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Homebuilder confidence slips in June 2011

Despite rising new home sales and an increase in building permits nationwide, home builder confidence slipped to a 9-month low in June. The monthly Housing Market Index from the National Association of Homebuilders registered 13 this month — three ticks lower than last month, and its lowest level since September 2010.

June’s 3-point drop from May is the biggest one-month move since May 2010, the month after the expiration of the federal home buyer tax credit. The retreat could signal favorable pricing for new home buyers in Tumwater in the months ahead.

When builders get less bullish on housing, they may be more willing to negotiate for upgrades and discounts. Ultimately, this can help new home buyers buy homes at better, lower prices.

A closer look at the Housing Market Index shows why this may be true.

The Housing Market Index is not a single-reading statistic. It’s a composite; the result of 3 separate surveys, each meant to measure a specific facet of a home builder’s business. The survey questions are:

 

How are market conditions for the sale of new homes today?
How are market conditions for the sale of new homes in 6 months?
How is prospective buyer foot traffic?
  1. How are market conditions for the sale of new homes today?
  2. How are market conditions for the sale of new homes in 6 months?
  3. How is prospective buyer foot traffic?

When builders reply, their responses are tallied and mapped to a scale of 1-100. Readings over 50 are considered favorable. Readings under 50 are considered unfavorable. The HMI has not been higher than 50 in more than 5 years.

In June, the HMI composite reading of 13 was anchored by falling foot traffic and reduced expectations for “future sales”. Homebuilders expect new home sales to be down through the New Year.

Therefore, if you’re a home buyer in Washington State and have considered “buying new”, the time may be right for making an offer. Financing is cheap, home values are low, and builders are pessimistic — a terrific combination for today’s home buyer.

What’s Ahead For #Mortgage Rates : Week of June 20, 2011

June 20, 2011
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FOMC meets Tue-Wed this weekMortgage markets improved last week as Wall Street managed news on both sides of the economic coin. There were several instances of higher-than-expected inflation — an event that tends to lead rates higher — but weak domestic jobs data and a soft manufacturing report suppressed the damage.

Rates were also held low by ongoing issues in Greece.

In Greece, the government is currently struggling to meet its debt obligations — despite a restructuring of existing debt negotiated in 2010.

Without a plan for its new debt, though, Greece will likely to default on what it owes.  Eurozone and international banking leaders have failed to reach consensus on the situation, and now the citizens of Greece are in a state of social unrest.

The uncertainly surrounding the nation-state spurred a bond market flight-to-quality last week. That, too, helped to keep rates low.

Last week, mortgage rates fell for the sixth week out of nine, a streak that’s dropped conforming mortgage rates in Tumwater to their lowest levels of the year.

This week, that could change.

Wednesday, the Federal Open Market Committee adjourns from a 2-day meeting and anytime the Fed meets, there’s a good chance that mortgage rates will move. The FOMC makes the nation’s monetary policy.

The meeting adjourns at 12:30 PM ET and Fed Chairman Ben Bernanke will follow with a press conference at 2:15 PM ET. The press conference is meant to give context to the FOMC’s decision, and allow for back-and-forth with the press corps. Wall Street will watch closely, too, for signals of the Fed’s next action(s).

In addition, this week will see the results of May’s Existing Home Sales report and New Home Sales report. Both are considered important to the housing market, and to the economy overall.

If you’re still floating a mortgage rate, falling mortgage rates have helped you. There’s not much room for rates to fall further, however. Consider calling your loan officer and locking something in.

Housing Starts Climb Unexpectedly In May

June 17, 2011
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Housing Starts (2009-2011)The housing market received a jolt of good news Thursday. The Commerce Department reports that Single-Family Housing Starts improved in May.

As compared to April, last month’s Single-Family Housing Starts rose 4 percent to a seasonally-adjusted, annualized rate of 419,000 units, a figure slightly better than the 6-month average and the highest tally since January.

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

In addition, Building Permits saw a boost in May, too, climbing nearly 9 percent overall. Building Permits are a gauge of future construction activity with 89 percent of permits leading to new construction within 60 days.

For several reasons, the May data surprised Wall Street analysts.

First, more homes being built suggests a healthier housing market, yet, earlier this week, the June homebuilder confidence report posted its lowest reading since September 2010.

Second, new home sales are only slightly higher than their all-time lowest annualized readings. Sales volume remains low in Olympia and nationwide.

And, lastly, home prices have yet to recover in full. By adding additional inventory, builders may suppress price growth through the remaining portions of 2011.

For home buyers in Washington State , though, the Housing Starts data may be a signal that the market is turning. The data can be used to your advantage.

Home prices are a function of supply and demand and — based on the Housing Starts data plus the number of newly-issued Building Permits — home supply is likely to rise. Demand, on the other hand, despite low mortgage rates, may not. At least not in the short run.

As a buyer, you can use this information to your advantage. If you’re looking to buy new construction, ask your real estate agent about the current new homes supply. There are bargains to be found and May’s Housing Starts data should support low prices for at least the next few weeks.