Either:Give me a call at 801.560.2333 to discuss your financing options.
NGB Form 22, Report of Separation and Record of Service, for each period of National Guard service
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NGB Form 23, Retirement Points Accounting, and proof of the character of service
For the 9th straight month last month, foreclosure activity slowed.
According to foreclosure-tracking firm RealtyTrac, the number of foreclosure filings dropped 29 percent nationwide on an annual basis in June. The phrase "foreclosure filing" is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions.
June marked the ninth consecutive month of sub-300,000 filings after 20 months above it -- a promising signal for the housing market in Utah and nationwide.
It's also noteworthy that each of the 10 most foreclosure-heavy states showed fewer foreclosures in June 2011 as compared to June 2010, led by Florida's 54% decline. Florida is one of 4 states on the leading edge of foreclosure activity since 2007.
The other 3 states performed similarly well in June:
The decrease in foreclosure filings comes at a time when buyer demand is highest. According to the National Association of REALTORS®, "distressed properties" account for more than 30 percent of all home resales and no wonder -- homes in various stages of foreclosure or sold by short sale are selling with discounts of 20 percent versus comparable non-distressed homes.
For buyers in search of foreclosures , talk with a licensed real estate. Buying homes in foreclosure follows a different process path as compared to buying a "traditional" home. Make sure you seek the help of a professional.
The Federal Reserve released its June 2011 Federal Open Market Committee meeting minutes Tuesday. It contained no surprises and, as such, mortgage rates in Utah have idled in the hours since.
The Fed Minutes is published 8 times annually, three weeks after each scheduled Federal Open Market Committee meeting. It's the official log of the meeting's conversations and debates.
The Fed Minutes is the lengthier companion piece to the FOMC's more well-known, post-meeting press release. As compared to the brief-and-focused press release,by comparison, the Fed Minutes are long and detailed.
June's press release was 458 words long. Its minutes totaled 6,889 words.
The June minutes reveal some interesting perspectives from within the Federal Reserve, too.
In addition, the Federal Reserve discussed whether a new round of economic stimulus was necessary. Committee members agreed that a poor outlook for employment in the medium-term would make this move more likely.
There was little that surprised Wall Street in the June Fed Minutes. This is why market reaction has been muted since its release.
The FOMC meets next August 9. If jobs data continues to weaken between now and then, expect the stimulus chatter to continue. It's unclear, however, how this would impact mortgage rates.
For now, mortgage rates remain near their all-time lows, and they have much more room to rise than to fall. If you're shopping for a loan, therefore, the timing is right for a lock.
More commonly called APR, Annual Percentage Rate is a government-mandated mortgage comparison tool. It measures the total cost of borrowing over the life of a loan into dollars-and-cents.
A loan's APR is printed in the top-left corner of the Federal Truth-In-Lending Disclosure, as shown above. When quoting an interest rate, loan officers are required by law to disclose a loan's APR, too.
APR is meant to simplify the process of choosing between two or more loans. The theory is that the loan with the lowest APR is the "best deal" for the applicant because the loan's long-term costs are lowest. However, the loan with the lowest APR isn't always best.
APR makes assumptions in its formula that can render it moot.
First, APR assumes you'll pay your mortgage off at term, at never sooner. So, if your loan is a 15-year fixed rate, its APR is based on a full 15 year term. If you sell or refinance prior to Year 15, the math used to make your loan's APR becomes instantly flawed and "wrong".
Example: Let's compare two identical loans in Utah -- one with discount points and a lower interest rate; and one without discount points and a higher mortgage rate. The loan with discount points will have a lower APR in most cases. However, if the homeowner sells or refinances within the first few years, the loan with the higher APR would have been the better option, in hindsight.
Second, APR can be "doctored" early in the loan process.
Because the APR formula accounts for third-party costs in a mortgage transaction, and third-party costs aren't always known at the start of a loan, a bank can inadvertently understate them. This would make the APR appear lower than what it really is, and may mislead a consumer.
And, lastly, APR is particurly unhelpful for adjustable-rate loans. Because the APR calculation makes assumptions about how a loan will adjust during its 30-year term, if two lenders use a different set of assumptions, their APRs will differ -- even if the loans are identical in every other way. The lender whose adjustments are most aggressively-low will present the lowest APR.
Summarized, APR is not the metric for comparing mortgages -- it's a metric. For relevant comparison points, talk to your loan officer.
Mortgage markets improved in roller coaster-like trading last week. And, not surprisingly, the week's two big stories were the same two stories roiling mortgage markets since March -- Greece and Jobs.
In both instances, rate shoppers won. Conforming mortgage rates in Utah improved for the first time in 3 weeks last week.
Early in the week, mortgage rates fell as doubts resurfaced on the just-completed Greece aid package. Although an agreement had been reached by the Greek Parliament, investors are wondering if it's a bona fide solution, or delaying an inevitable default.
Talk like this triggers a flight-to-quality, and last week, it led mortgage rates lower.
Then, mid-week, a strong preview of the Friday jobs report led to a reversal. Mortgage markets sold off sharply with the prospect of a blow-out Non-Farm Payrolls number. Analysts upped their estimates 50% -- from 80,000 net new jobs created in June to 120,000 -- and mortgage rates spiked in anticipation.
The rate rise was short-lived, however, because when the actual jobs report was released, it showed just 14,000 jobs added in June. Mortgage markets reversed and mortgage rates sunk to their best levels in 2 weeks.
This week, Greece should remain in the headlines, but there's other rate-changing news, too:
If you're still floating a mortgage rate, today marks a good week to lock. Mortgage rates could fall this week and next, but there's more room for rates to rise than to fall.
Lock up today's low rates while they're still available.
The year is half-over. It's an opportune time to take stock of analyst predictions made at the start of the year, and to recognize that the "experts" can be wrong as often as they are right.
For as much experience and authority an expert brings to the conversation, though, nobody can accurately predict the future.
As such, there's often disagreement.
Looking back to December, some housing analysts called for a market rebound this year; while others called for a fall. With respect to mortgages, some said rates had nowhere to go but up; while others expected more dips.
As a layperson, how do you know who will be right?
In short, you can't.
Predictions are a tricky business because they're guesses about the future based on the world as it exists today. When the predictions listed earlier were made, the world was a different place.
A lot has changed since January:
None of these events had occurred as of December, when the original predictions were made. Yet, each of these developments has made a deep impact on housing, and on the economy.
So, what's a homeowner to do? Think of the present instead.
First, mortgage rates are low today -- extremely low by historical standards. Second, home values have been slow to rebound through most U.S. markets. Combined, these factors have made homes more affordable than it any time in recorded history. It's not only cheap to buy a home right now, it's cheap to refinance one, too.
Analysts are saying the home prices will rise this year, and mortgage rates will, too. Those predictions may ultimately be proven true. Until the future arrives, though, those predictions are just guesses.
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:
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 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.
As home buyers , we tend to research homes a lot. We look at square footage; at upgrades; at landscaping; at community statistics; and, at every other "number" on which we can get our hands.
But those are just statistics. What about the home's "feel"?
In this 5-minute piece from NBC's The Today Show, you'll learn a dozen complementary home-shopping techniques to help you review and evaluate a home for purchase. Each is focused on findings you won't see listed on a website.
For example, instead of scheduling your second showing for the same time of day as your first one, revisit a home during an "opposite" time. if you originally saw the home in daylight, go see it at nighttime. If you first saw a home on the weekend, go see it during the work week.
By seeing a home in two distinct settings, you can get a better feel for what the home and neighborhood are really like.
Some of the other tips from the video include:
When you buy a home, you committing to more than just the property. You're committing to the neighborhood, too. Armed with the methods described in this video, you'll be better prepared to make a good decision.
Mortgage 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 Utah 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.
The interest rate differential between fixed-rate and adjustable-rate mortgages continues to widen and has now reached historic levels.
There's never been a better time to lock an ARM.
According to Freddie Mac's weekly Primary Mortgage Market Survey, homeowners who lock their mortgage rate today will save 129 basis points on rate, on average, by choosing a 5-year ARM as their mortgage product as compared to a 30-year fixed rate loan.
The average 30-year fixed rate is 4.51%. The average 5-year ARM rate is 3.22%.
It's the biggest interest rate spread between fixed-rate and adjustable-rate mortgage rates in Freddie Mac's recorded history; a gap which is the result, in part, of the 5-year ARM dropping to all-time lows this week.
Rates for the 5-year ARM are even lower than during last year's historic Refi Boom.
Putting today's "spread" in action against a hypothetical $250,000 loan size, a homeowner that chooses an ARM over a fixed-rate loan would save $184.30 monthly, and would have $500 fewer closing costs.
That's a 5-year savings of $11,558 -- nearly triple what you would have saved just 2 years ago.
The main reason why today's adjustable-rate mortgages are priced so aggressively relative to comparable fixed-rate loans is that Wall Street expects the economy to drag for the next several quarters, after which it expects an acceleration.
ARMs tend to reflect short-term expectations for the U.S. economy which is why short-term mortgage rates are dropping. Fixed products, by contrast, take a longer view and expectations for an economic rebound are pulling fixed-rate mortgage rates up.
For now, mortgage applicants can exploit the difference -- especially those who plan to move within the next 5 years -- but adjustable-rate mortgages aren't right for everyone. ARMs carry particular risks about which you should be aware before locking.
Before you choose an ARM, therefore, talk it through with your loan officer.
The summer housing market is heating up.
According to data from the National Association of REALTORS®, the Pending Home Sales Index smashed analyst expectations, jumping 8 percent on a monthly basis in May.
Wall Street calls were for an increase of just 0.5 percent.
It was a surprise result that, coupled with the recent stronger-than-expected New Home Sales and Existing Home Sales readings, has sparked housing market optimism in Utah and nationwide.
The biggest reason for the optimism is because of what the Pending Home Sales Index measures.
In contrast to "traditional" housing data which reports on how housing performed two months ago, for example, the Pending Home Sales Index is a forward-looking indicator; a predictor of future market activity based on freshly-written contracts between buyers and sellers.
In other words, the Pending Home Sales Index looks ahead -- not back. This is reflected in its methodology which states that 80% of homes under contract close within 2 months, and a large percentage of the rest close within Months 3 and 4.
Because May's Pending Home Sales Index rose sharply, therefore, we can expect similar jumps in the Existing Home Sales figures of June and July.
For housing and home prices, this is a positive but the gains won't apply to each home equally. The Pending Home Sales Index is still a national report for a market built on local sales. What's happening on your particular street in your particular neighborhood may not reflect what's happening somewhere else.
For accurate, real-time data in your local market, ask a real estate agent for statistics.
Maybe homes 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 , 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.
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:
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.
Mortgage 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 Utah 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.
If demand is high at any/all of the auctions, mortgage rates should drop. If demand is weak, mortgage rates should rise.
On paper, the market for newly-built, single-family homes looks healthy.
Last month, the number of new homes sold on an annualized, seasonally-adjusted basis tallied 319,000. The May reading is the second-highest of the year, and 6 percent above the current 12-month average.
These are strong numbers in isolation. However, after accounting for the dwindling supply of new homes for sale as well, the figures look even stronger.
In May, at the current pace of sales, the complete, national inventory of new homes for sale would have been sold in just 6.2 months.
That's the quickest pace in a year and a 3-month improvement from a year ago.
To hear it from homebuilders, though, you'd think that sales were crashing.
Homebuilder confidence slipped to a 9-month low this month; builders report slowing foot traffic; and the prospects for the next 6 months appear weak. This is not the portrait painted by HUD's May New Home Sales report.
As a home buyer , this dichotomy may work to your advantage.
Falling supplies and rising demand correlate to higher home prices. Yet, builders are pessimistic for their market. Therefore, despite the economics, psychology may help buyers experience more favorable negotiations, including complimentary upgrades and other builder concessions.
If you're a buyer in today's market, it's a reason to consider the new home market. There may be good value once you know where to look.
Wednesday, 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 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.
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.
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. Ask your real estate agent for help in finding them.
Mortgage 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 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.
This week marks the official start of Summer. If your home's outdoor area has furniture in it, you'll want to make sure that your furniture is clean.
In this 4-minute video from Lowe's, you'll learn tricks to keep your outdoor furniture clean, and protected from the elements. All types of outdoor furniture are covered in the lesson including metal, resin-based, and wooden.
The offered tips include:
Furthermore, the instructional video includes tips for cleaning fabrics and canopies; and for shampooing an outdoor rug.
There's lot of reasons to keep your outdoor furniture clean -- health reasons among them -- but it shouldn't be lost that clean furniture will have a longer useful life than furniture that's been neglected or ignored.
Clean your outdoor pieces at least twice annually and they'll give you years of good looks and comfort.
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 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 Utah , 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.
Foreclosure rates are falling.
According to foreclosure-tracking firm RealtyTrac, monthly foreclosure filings fell 2 percent in May to just under 215,000 filings nationwide. A foreclosure filing is defined as any one of the following: a default notice, a scheduled auction, or a bank repossession.
On an annual basis, foreclosure counts have dropped over 16 consecutive months, dating back to January 2010.
Like all things in real estate, though, foreclosures are local. 6 states accounted for more than half of the country's foreclosure filings in May. Those six states -- California, Michigan, Arizona, Florida, Georgia and Texas -- represent just 34% of the U.S. population.
But even on a per household basis, the figures remain disproportionate.
The nationwide foreclosure rate was 1 foreclosure per 605 households.
As a home buyer , foreclosures matter. Distressed homes account for close to 40% of home resales and that's because distressed properties often sell at steep discounts; in some markets, up to 20 percent less than a comparable, non-distressed home. Foreclosed homes can be a great "deal", therefore, but only if you've done your homework.
Buying a bank-repossessed home is different from buying from "people". The contracts and negotiation process are different, and homes are sometimes sold with defects.
If you plan to purchase a Utah foreclosure, therefore, speak with a real estate professional first. With foreclosures, there's a lot you can learn online, but when it comes time to submit an actual bid, you'll want an experienced agent on your side.
The jobs market is recovering slower than expected, and so is housing. But neither condition has slowed U.S. consumers.
According to the Census Bureau, Retail Sales rose for the 11th straight month in May. Excluding cars and auto parts, sales receipts climbed to $322 billion last month. It's an all-time high and another example of the U.S. economy's resiliency.
Wall Street didn't expect such results. As a result, mortgage rates worsened Tuesday.
By a lot.
The connection between Retail Sales and mortgage rates can be fairly tight in a recovering economy. Retail Sales accounts for almost half of all U.S. consumer spending, and nearly one-third of the economy overall. The May report, therefore, showed the economy may be on more solid footing than economists expect.
Plus, lately, as the economy goes, so go mortgage rates nationwide.
When the economy has shown signs of life, mortgage rates have increased. When the economy has shown signs of a slowdown, mortgage rates have dropped.
It's why mortgage markets reacted the way they did Tuesday; May's Retail Sales data was strong. The resultant surge in conforming mortgage rates -- from market open to market close -- turned into one of the year's fiercest, raising average mortgage rates well off their 7-month lows established earlier this week.
At today's rates, each 0.125 percent change in rates yields a payment difference of $7.50 per $100,000 borrowed. Yesterday, some product rates rose by as much as 0.250 percent. It put a dent in home affordability and household budgets.
With Retail Sales are up 8 percent from last year, therefore, and showing few signs of a slowdown, today may be a prudent date to lock a rate with your lender. As the economy continues to grow, rates are expected to rise.
Mortgage rates are falling, falling, falling.
On a wave of uncertainty about Greece and its debt; and weaker-than-expected economic data at home, conforming 30-year fixed rate mortgage rates have fallen to levels not seen since December 2, 2010.
Mortgage rates have dropped 8 weeks in a row. Not even last year's Refi Boom produced an 8-week winning streak. This season's streak is historic.
The 30-year fixed rate mortgage now averages 4.49% nationally, down 42 basis points, or 0.42%, since early-April. For every $100,000 borrowed, that equates to a monthly savings of $25.24.
Adjustable-rate mortgages have shed even more, giving back 50 basis points since the streak began.
Because of low rates, it's an excellent time to buy or refinance a home relative to just a few weeks ago. Note, though, that depending on where you live, you may find your quoted interest rates to be slightly higher or lower than what Freddie Mac reports in its survey. This is because the Freddie Mac figure is a national average.
Mortgage rates and fees vary by region:
You'll notice that, in the West Region, rates tend to be low and fees tend to be high; in the North Central Region, the opposite is true. You should expect Utah to have its own pricing norm within this region, too.
Is there a particular rate-and-fee setup that suits you best? The good news is that you can ask for it -- no matter where you live.
If having the absolute lowest mortgage rate is more important to you than having the absolute lowest fees, ask your loan officer to structure your loan in the "West" style. Or, if low costs are more your style, ask for them.
Mortgage rates appears as if they're headed lower but don't forget how quickly markets can change. Once they do, mortgage rates should spike. Exploit today's market while you still can.
Mortgage markets moved in feverish fashion last week, changing with extreme frequency, and eventually ending slightly worse on the week. Conforming mortgage rates fell to a 6-month low Wednesday but, by Friday, they had retreated higher.
Last week marked just the second time in 8 weeks that rates increased. During that span, Freddie Mac reports that mortgage rates have dropped 42 basis points, or 0.42%.
That equates to a monthly savings of $25.24 per $100,000 borrowed.
One reason why mortgage rates have been dropping is that the economy is growing more slowly than projected. In a speech last week, Federal Reserve Chairman Ben Bernanke described the U.S. recovery as "frustratingly slow". In a separate speech, another Federal Reserve President, William Dudley, categorized the recovery as "subpar".
Economic weakness tends to promote a low mortgage rate environment as equity markets sell off and investors seek safety of principal. Indeed, the Dow Jones Industrial Average fell for the 6th straight week, its longest losing streak since 2002.
Mortgage rates were also helped by ongoing uncertainty in Greece. The nation remains at-risk for default, and that's spurring a bond market to flight-to-quality which benefits the U.S. mortgage market, too.
This week, mortgage rates may reverse their recent slide. There isn't much data due for release, but the numbers that will hit the wires have the ability to move markets -- especially the inflation-linked figures.
If you've been looking at mortgage rates for a purchase or refinance, now may be a good time to lock. FHA and conforming rates are at their lowest levels since December 2010.
Going forward, rates have much more room to rise than to fall.
A mortgage comes with many moving pieces and understanding them is the key getting a great deal. Unfortunately, studies show that few Americans have a firm grasp of how mortgages work -- from mortgage types to mortgage fees.
In this back-to-basics interview on NBC's The Today Show, you'll learn some mortgage planning basics to help you get smarter with your next home loan -- purchase or refinance.
Some of the topics covered include:
There is also one of the most simple explanations of "discount points" ever offered on network television.
The video runs 4-and-a-half minutes. For first-time buyers and experienced ones, it's worth a watch. You'll pick up some tips to use on your next mortgage.
It's a fact: It's more expensive to live in some cities than others. Beyond just the costs of buying a home, different cities also carry a different Cost of Living. For households relocating from Utah and across state lines, the change in "life costs" can be jarring.
Depending on where you live, everyday expenses -- from groceries to gasoline -- make a different-sized dent in a household budget. And now you can see in numbers by how much your expenses might change.
Visit Bankrate.com's Cost of Living Comparison Calculator.
The Cost of Living Comparison calculator is as basic as it is thorough. The calculator asks just 3 questions -- (1) Where do you live now, (2) To what city are you moving, and (3) What is your salary -- and uses your answers to produce a detailed, 60-item cost comparison between the two towns.
The city-to-city cost comparisons include:
The list also features a mortgage rate comparison, and a comparison of local home prices.
The Cost of Living calculator is based on data from the ACCRA. On the ACCRA website, a similar report sells for $5. At Bankrate.com, the information is free.
If you live in a high-cost area, keep an eye on your calendar. Effective October 1, 2011, temporary conforming loan limits will be lowered nationwide. Perhaps by as much as 14 percent.
These limits range up to $729,750 currently.
"Temporary loan limits" were enacted as part of the government's 2008 economic stimulus package. At the time, the financial sector was entering its crisis and private mortgage lending had all but disappeared. Financing was scarce for both homeowners and home buyers for whom loan sizes exceeded Fannie Mae and Freddie Mac's national $417,000 limit -- even for those with excellent credit and income.
The issue was exacerbated in places like New York City where local home prices routinely topped $1 million. Buyers unable or unwilling to bring a substantial downpayment to closing (i.e. $600,000 or more) found themselves without financing.
The February 2008 package addressed this issue, using a math formula to change loan limits nationwide. The government assigned to each U.S. metropolitan area a temporary, new loan size limit equal to 25% greater than its respective median home sale price, not to fall below $417,000, and not to exceed $729,750.
Then, later that same year, the Housing and Recovery Act made "high-cost areas" permanent, but with a reduced 15% increase to median home prices, and loan sizes not to exceed $625,500.
These new limits take effect October 1, 2011 -- one day after the temporary limits expire.
If you live in a high-cost area, therefore, take note. Mortgage rates may be low, but the amount of loan for which you qualify may be less than you expect, and you may find yourself ineligible.
Whether you're planning a refinance or a purchase, keep an eye on the calendar.
The complete list of high-cost areas is available online.
Hurt by foul weather and a soft market, the Pending Home Sales Index plunged 12 percent in April.
The monthly index is published by the National Association of REALTORS® and measures the number of homes on which new contracts have been written.
It's the association's lone "forward-looking" report; meant to predict future, closed home sales. 80% of homes under contract close within 2 months.
Therefore, if the April Pending Home Sales Index is accurate, we should expect home sales to decline through June and July.
On a regional basis, "pending homes" varied. The Northeast Region posted growth. None others did.
But even regional data remains too broad to be useful to everyday buyers and sellers. Housing is local and that means that each block, of each street, in each city has its own market and economy. Grouping 9 states into a single "region" is neither helpful nor relevant.
That said, we can't ignore the data in its entirety.
Housing is believed to be a key component in the nation's economic recovery. Fewer home sales will retard growth, and slower growth leads mortgage rates down.
Home Affordability hit record-highs last quarter, and should do the same in this one. Homes now sell at discounts to prior prices and mortgage financing is cheap. Buyers tend to be drawn to favorable markets such as this, and that will pressure home prices higher.
If you're in the market for a home today, conditions look good. Talk to your real estate agent to gauge your options.
Mortgage markets improved last week, carried by the same stories that have led markets better since April. Worries of a Eurozone sovereign debt default mounted, and the U.S. economy's revival showed itself to be slower than originally anticipated.
In Greece, the nation readied itself for its second bailout in two years. The austerity measures of last year have not worked as planned. There are concerns that a default would lead to contagion, delivering the Euro region into an economic tailspin.
These fears spurred a flight-to-quality in bond circles to the benefit of U.S. mortgage rate shoppers.
In addition, last week's U.S. jobs data fell short of expectations, giving another boost to mortgage markets.
There were 3 weak reports:
Each of these data points underscores the fragile nature of the U.S. recovery, and the weaker-than-expected readings helped mortgage rates improve.
It's the sixth week of 7 that mortgage rates have improved, setting the stage for a new wave of refinances.
This week, there is very little new data on which for mortgage bonds to trade. Therefore, expect the stories from recent weeks to continue to dominate headlines. If Greece's austerity and/or bailout plan is met with investor optimism, mortgage rates should rise. If the plan falls flat, mortgage rates should fall.
There will also be chatter about the U.S. debt ceiling, another potentially negative force on mortgage rates.
If you're floating a mortgage rate right now, consider locking in. There's a lot more room for rates to rise than to fall.
The March Case-Shiller Index was released this week and it corroborates the findings of the government's most recent Home Price Index -- home values are slipping nationwide.
According to the Case-Shiller Index's publisher, Standard & Poors, home values fell in March from the year prior.
The March report was among the worst Case-Shiller Index readings in 3 years. On a monthly basis, 18 of 20 tracked markets worsened. Only Seattle and Washington, D.C. showed improvement, rising 0.1% and 1.1%, respectively.
On an annual basis, price degradation was even worse.
Washington, D.C. is the only tracked market to post higher home values for March 2011 as compared to March 2010. The national index has now dropped to mid-2002 levels.
As a buyer in today's market, though, you can't take the Case-Shiller Index at face value. It's methodology is far too flawed to be the "final word" in home prices.
The first big Case-Shiller Index flaw is its relatively small sample size. S&P positions the Case-Shiller Index as a national index but its data comes from just 20 cities total. And they're not the 20 most populous cities, either. Notably missing from the Case-Shiller Index list are Houston (#4), Philadelphia (#5), San Antonio (#7) and San Jose (#10).
Minneapolis (#48) and Tampa (#55) are included, by contrast.
A second Case-Shiller flaw is how it measures a change in home price. Because the index throws out all sales except for "repeat sales" of the same home, the Case-Shiller Index fails to capture the "complete" U.S. market. It also specifically excludes condominiums and multi-family homes.
In some cities -- such as Chicago -- homes of these types can represent a large percentage of the market.
And, lastly, a third Case-Shiller Index flaw is that it's on a 2-month delay. It's June and we're only now getting home data from March. Today's market is similar -- but not the same -- to what buyers and sellers faced in March. The Case-Shiller Index is far less useful than real-time data of a city or neighborhood.
The Case-Shiller Index is more useful to economists and policy-makers than to everyday buyers and sellers. For better real estate data for your particular neighborhood, ask your real estate agent for help.
A real estate agent can tell you which homes have sold in the last 7 days, and at what prices. The Case-Shiller Index cannot.
Tomorrow morning, at 8:30 AM ET, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for May. If you're floating a mortgage rate right now -- or are in the process of shopping for a loan -- consider locking your rate sooner rather than later.
The Non-Farm Payrolls report can be a major market mover, causing large fluctuations in both conforming and FHA mortgage rates. It's because of the report's insight into the U.S. economy.
More commonly called "the jobs report", Non-Farm Payrolls is issued monthly. Sector-by-sector, it details the U.S. workforce and unemployment rates.
Jobs momentum has been strong. Through 7 consecutive months, the economy has added jobs, the government reports. Nearly 1 million new jobs have been created during that time. These are strong figures for a country that lost 7 million jobs in 2008 and 2009 combined.
However, Wednesday, a weaker-than-expected "preview" figure from payroll company ADP has Wall Street wondering whether this month is the month that the winning streak ends.
May's ADP data fell so far short of expectations that investors have had to re-assess their job growth predictions. Earlier this week, the consensus was that 185,000 new jobs were created in May. Today, those estimates are much lower.
The change is leading mortgage rates lower, too.
The connection between jobs and mortgage rates is somewhat straight-forward. Job growth influences mortgage rates because jobs matter to the economy. As job growth slows, so does the economic growth, and that puts downward pressure on mortgage rates.
The opposite is true, too. Strong job growth tends to lead mortgage rates higher.
So, with job growth estimates revising lower, Wall Street has adjusted its "bets" and that's benefiting rate shoppers across Utah. Should the actual jobs figures not be so bad, though, expect a quick and sharp reversal; and much higher mortgage rates for everyone.
The safe move is to lock your rate today.
Another quarter, another sign that mortgage lending may be easing nationwide.
The Federal Reserve's quarterly survey of senior loan officers revealed that an overwhelming majority of U.S. banks have stopped tightening mortgage requirements for "prime borrowers".
A prime borrower is one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.
Of the 53 responding "big banks", 49 reported that mortgage guidelines were "basically unchanged" last quarter. Of the remaining four banks, two said mortgage guidelines had "eased somewhat", and the remaining banks said guidelines "tightened somewhat".
It's the second straight quarter in which fewer than 5 percent of banks tightened guidelines, and the first quarter in nearly 5 years in which the number of banks that loosened guidelines equaled the number of banks tightening them.
The easing in mortgage lending is a positive development for the housing market; and for buyers nationwide. Looser lending standards means that more buyers will be approved for home loans, and that should spur home sales forward across the region.
However, don't confuse "looser standards" with "irresponsible standards". It's much more difficult to get financing today as compared to 2006. Delinquencies and defaults have altered how a bank reviews a loan application.
Today, underwriters are more conservative with respect to household income, total assets and overall credit scores. Even as compared to just 6 months ago:
If you can get approved, though, your reward is that mortgage rates are especially low. Since early-April, both conforming and FHA mortgage rates have been on a downward trajectory, and pricing is near a 6-month low.
Home affordability is at an all-time high, too.
Looser guidelines and lower rates should help fuel home demand through the summer months. If you're in the market to buy, your timing appears to be excellent.
Another quarter, another sign that mortgage lending may be easing nationwide.
The Federal Reserve's quarterly survey of senior loan officers revealed that an overwhelmingly majority of U.S. banks have stopped tightening mortgage requirements for "prime borrowers".
A prime borrower is one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.
Of the 53 responding "big banks", 49 reported that mortgage guidelines were "basically unchanged" last quarter. Of the remaining four banks, two said mortgage guidelines had "eased somewhat", and the remaining banks said guidelines "tightened somewhat".
It's the second straight quarter in which fewer than 5 percent of banks tightened guidelines, and the first quarter in nearly 5 years in which the number of banks that loosened guidelines equaled the number of banks tightening them.
The easing in mortgage lending is a positive development for the housing market; and for buyers nationwide. Looser lending standards means that more buyers will be approved for home loans, and that should spur home sales forward across the region.
However, don't confuse "looser standards" with "irresponsible standards". It's much more difficult to get financing today as compared to 2006. Delinquencies and defaults have altered how a bank reviews a loan application.
Today, underwriters are more conservative with respect to household income, total assets and overall credit scores. Even as compared to just 6 months ago:
If you can get approved, though, your reward is that mortgage rates are especially low. Since early-April, both conforming and FHA mortgage rates have been on a downward trajectory, and pricing is near a 6-month low.
Home affordability is at an all-time high, too.
Looser guidelines and lower rates should help fuel home demand through the summer months. If you're in the market to buy, your timing appears to be excellent.
Mortgage markets improved last week ahead of Memorial Day and a 3-day weekend. Bond pricing ending the week higher, pushing conforming mortgage rates in Utah down for the 5th week out of six.
Most economic news reported worse-than-expected. Initial Jobless Claims increased sharply, GDP was unchanged, and Durable Orders posted the largest one-month decline since October. Each of these stories reduced inflationary pressures on the economy, contributing to lower mortgage rates.
However, the main driver for U.S. mortgage rates last week was Europe.
One year ago, Greece pledged to lower its spending, cut its deficit, and reduce the number of public programs and benefits. In economic circles, this is known as austerity. For more than a month, however, despite the austerity measures, there has been concern that Greece will fail to meet its debt obligations.
Last week, that concern spiked. It triggered a flight-to-quality that helped U.S. mortgage bonds, and led mortgage rates lower.
Conforming and FHA mortgage rates are now at their lowest levels in more than 6 months.
This week, the biggest news is May's Non-Farm Payrolls report. Although, expect for rates to carve out wide ranges from day-to-day. Until the Greece scenario reaches a resolution, Wall Street will be on edge.
Plus, four members of the Fed have scheduled speeches.
If you're still floating a mortgage rates, or have otherwise not locked in, luck is on your side. Mortgage rates look poised to fall over the next few days, however, markets have been known to reverse quickly. Therefore, if you've been quoted on a rate that looks acceptable to you, you may not want to gamble on mortgage rates falling further.
The safest decision may be to commit to what's available to you today.
