2508 Partridge Place, Carrollton, TX | Powered by Postlets

2508 Partridge Place, Carrollton, TX | Powered by Postlets

This Month In Real Estate (US): January 2011

Weekly Mortgage Update: 30yr Fixed 4.75%, 15yr Fixed 4.25% BOTH with NO Origination

The volatility in mortgage rates continued during the first week of the year. Prior to Friday's Employment report, nearly all the economic data was stronger than expected, which was negative for mortgage rates. Rates improved after the Employment data, though, and ended the week nearly unchanged.

Over the last two months of 2010, investors began to focus on a trend toward stronger economic growth, which helped push mortgage rates higher over that period. Nearly every economic report released this week showed greater than expected improvement from last month, including Services, Manufacturing, and Construction. Stronger economic growth and job creation is positive for home sales, but it also results in higher inflation, which leads to higher mortgage rates.

The condition of the labor market is among the most important economic data every month, and this week there was some additional suspense. On Wednesday, ADP, a private payrolls firm, released its forecast for private sector job growth in December, and it was for an increase of an enormous 300K jobs. The ADP forecast has always been considered an imprecise labor market predictor, but the sheer magnitude of the ADP forecast caused many investors to increase their expectations for the government's monthly Employment report. Friday's data showed that the economy added 103K jobs in December, and revisions to prior months added an additional 70K jobs. The combined total of 173K jobs was close to the original consensus estimate, but was below the number that some investors expected after the ADP forecast, and mortgage rates improved after the news. Another big surprise came from a drop in the Unemployment Rate to 9.4% from 9.8% in November, far below the consensus forecast of 9.7%, and the lowest level in 19 months. Economists suggest that seasonal factors may have played some role in the large decline in the Unemployment Rate, so next month's results will be highly anticipated.

 

September 2010YTD MLS Activity Report

Below is a graph showing the home sales activity in Collin, Denton, Dallas and Johnson counties Year To Date ending September 2010. While we are seeing that some cities are down as far as overall sales over last year, we are seeing the majority have gone up in average sales price.

Uptown Condos are making a strong showing going up 4% in number of sales over last year and up 16% in average sales price.

If you are waiting for home prices to drop further you have missed that boat. The values in Dallas are increasing and interest rates are at an all time low. At what percentage do you have your car financed? You may be able to finance a house for the same or less.

Thank you for our friends at Hexter-Fair Title Company for supplying the data.

Lead Based Paint. Where Are We Now?

If a house was built before 1978 it is a pretty good bet that it has at least some lead-based paint somewhere. All sellers must sign a document disclosing any knowledge they may have regarding the lead-based paint in their home.
The EPA has been all over this lately regarding the proper disposal and care to be taken when any lead-based paint is "disturbed" as in when remodeling a home. Below is a good, detailed article explaining where the rules and laws stand as of now.
The one for sure take away is make sure your contractors, painters, etc. are EPA certified to work with and dispose of lead-based paint.


Lead Paint Rules Weigh on Window Replacement

30yr Fixed 4.25%, 15 yr Fixed 3.75 both with 1% Origination

After rising for two weeks, mortgage rates moved a little lower this week. Slower than average economic growth and low inflation persuaded investors to purchase bonds, including mortgage-backed securities. Following three months of declines, mortgage rates appear to be settling into a range so far in September.

The most significant economic data released during the week was the monthly inflation reports. Rising inflation erodes the value of bonds and pushes mortgage rates higher. In the current economic environment, higher inflation is not a concern, and some investors are more worried about the risk of inflation falling too low. The Fed is generally most comfortable when core inflation is rising at an annual rate between 1.0% and 2.0%. In August, the core Consumer Price Index (CPI) increased at a low 0.9% annual rate. While this level is probably not low enough to prompt new action from the Fed, investors will be closely watching what the Fed has to say about inflation rates at next Tuesday's meeting.

Hearings began this week on the role of government in the housing market, including the future of Fannie Mae and Freddie Mac. The debate is expected to be lengthy, and the Obama administration has stated that it will produce a proposal in January. There is general agreement that government involvement has created a more liquid market for mortgages, which has resulted in lower mortgage rates. The early consensus is that there is an appropriate role for government in the housing market, but that proper safeguards must be established to reduce the future risk to taxpayers. In any case, changes are expected to be phased in gradually over a period of years.

The biggest story next week will be Tuesday's Fed meeting. No change in the fed funds rate is expected, but any surprises in the Fed's statement could have a large impact on mortgage rates. Also on Tuesday, Housing Starts will be released. Existing Home Sales will come out on Thursday, along with Leading Indicators.

Thank you Christian Johnson of Shelter Mortgage for sharing this information.

This Month in Real Estate September 2010 ............................................................................................................................................... Market Update The housing market was off to a rocky start as the second half of the year began. Much of the volatility, however, was anticipated and attributed to the now-expired tax credit. Despite softened sales this last month, home prices continued to gain -  thanks in part to record low jumbo loan rates, which are fueling more interest and activities in the higher end of the market. Meanwhile, the economy still has a lot of ground to cover before achieving its full, sustainable recovery. Consumers, while remaining on the cautious side, have increased their spending, which is supported by a gradual improvement in income. The stagnant job market continues to be a cause for concern, but overall, financial conditions have improved. For the first time in fourteen months, home sales fell below year-ago levels. Although the drop exceeded expectations, it is undoubtedly due to the expiration of the tax credit. Lawrence Yun, NAR chief economist, said, “given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.” July’s median home price was virtually unchanged. Home values have been stable for the past 18 months due in part to the tax credit. Experts believe that home prices will continue to be stable going forward. The total number of homes on the market remains stable but the number of months worth of inventory has jumped due to lower home sales and fewer buyers in the market. This represents a great opportunity for buyers who have not yet purchased or who are considering a second home or investment property. Important to note is that experts anticipate stable prices and do not expect this to be an ongoing trend. Source: National Association of Realtors Interest Rates Mortgage rates continued to set new record lows in August, providing real savings in interest and monthly payment for buyers and refinancers. As economic activity picks up, rates will rise to keep inflation in check. Rates as of September 2. This Month's Video Topics For Home Owners, Buyers & Sellers   Financial Reform What it means for consumers The Wall Street Reform and Consumer Protection Act was signed into law in late July.  Before the pains of the financial crisis were just a thing of the past, Congress passed the biggest financial reform measures since the Great Depression. While much of the bill covers Wall Street measures and regulations, there are several changes consumers should be aware of. The following are the top measures related to financing for consumers: Mortgages. Lenders must determine if borrowers will be able to meet monthly obligations including mortgage, taxes, insurance, and assessments. Borrowers of adjustable rate mortgages must qualify at the highest rate. Additionally, lenders won’t be able to incentivize mortgage brokers to make higher-rate or riskier loans. Credit Reports. All consumers will no longer have access to government-mandated free annual credit reports. Consumers who are denied a loan or who are not offered the best interest rate will receive free copies of their credit scores. Credit scores and reports will be available for purchase through a credit bureau or myFICO.com. Credit and Debit Card Changes. Most notably, merchants may start incentivizing consumers to pay with cash, debit, or check. There may be changes to credit card rewards programs. Consumer Financial Protection Bureau. This new bureau will regulate consumer loans including mortgages, credit cards, student loans, payday loans, and check-cashing companies.  Auto loans and insurance lending will be excluded. The government’s goal of creating safer and easier to understand lending practices is to benefit the long-term strength of the economy.  For more information, see the following links: http://www.myfico.com/crediteducation/articles/financial-services-reform.aspx http://www.usatoday.com/money/perfi/basics/2010-06-25-financial-regulations-consumers_N.htm     Local Lenders Rates Consumers would be wise to do some shopping around for interest rates on mortgages. Since the financial crisis began, many of the big banks consolidated and merged - Wells Fargo and Wachovia, for example - increasing the “big banks” combined market share. With fewer players in the game, rates don’t need to be as competitive as before the consolidation to get the same amount of business. Smaller local or regional banks can offer significantly advantageous rates. Of course, each loan situation is different and depends on a variety of factors, but don’t forget due diligence – it could save big bucks in the long run. Sources: The Wall Street Journal, USA Today, myfico.com	Newsletter Contents 1. Market Update 2. Interest Rates 3. Video 4. Topics for Owners, Buyers & Sellers
Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report.  The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources.  You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.  Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind.  All information presented herein is intended and should be used for educational purposes only.  Nothing herein should be construed as investment advice.  You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.  All investments involve some degree of risk.  Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.