Mortgage Rates continued to improve as Bond Prices traded sideways and above the two hundred day-Moving Average since Tuesday. Stocks saw modest gains today as the Dow rose by 61.07 points to end at 15,570.2 , the S&P 500 was up 7.70 points to 1,759.77, while the Nasdaq gained 14.40 points to 3,943.36. Oil was last seen at $97.95/barrel up 83 cents. Next week’s events – FOMC meeting and a boatload of economic data. The recommendation is to lock into rates, as frothy Bond Prices could bring out the profit takers.
Mortgage Rate Chart April to Oct 2013
Weekly Survey of Rates from the Mortgage Bankers Association
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.39 percent, the lowest rate since June 2013, from 4.46 percent, with points increasing to 0.41 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.43 percent, the lowest rate since June 2013, from 4.51 percent, with points increasing to 0.26 from 0.15 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.15 percent from 4.16 percent, with points decreasing to 0.27 from 0.44 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.51 percent, the lowest rate since June 2013, from 3.53 percent, with points decreasing to 0.30 from 0.31 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 5/1 ARMs was unchanged at 3.25 percent, with points decreasing to 0.26 from 0.32 (including the origination fee) for 80 percent LTV loans.
Senator Paul Threatens to hold up Janet Yellen Federal Reserve Nomination
Sen. Rand Paul is threatening to put a hold on the nomination of Janet Yellen to chair the Federal Reserve, a source close to the Kentucky Republican said Friday. Paul is insisting on a vote on his Fed transparency bill, and has informed Senate leadership of his intentions, the source said.
“As part of Senate consideration of the Janet Yellen nomination to be Chair of the Federal Reserve, I will request a vote on my bipartisan Federal Reserve Transparency Act, S. 209. The American people deserve transparency from the federal reserve and the federal government as a whole,” Paul said in a statement following the reports. Read more
Housing News
Can You Trust JP Morgan with Your Home Loan?
Many are staying away from applying for a Mortgage with JP Morgan and the country’s Big Banks that participated in dishonest activities that were responsible for the country’s economic disaster. They don’t believe that we should forgive and forget or reward bad behavior. Remember, these institution’s are responsible for many Americans loosing their retirement nest eggs and equity in their homes. So, next time you are in need of home financing, use only professionals with a proven honest reputation.
JPMorgan’s reported $13 billion settlement with U.S. authorities over shady investment practices sets a precedent that could have ghastly consequences for the bank, as well as for its main rivals. In rolling over so completely, the bank has made itself vulnerable not only to further attacks from various government agencies, but also to civil trial lawyers out for blood on behalf of wronged investors. The result could be an orgy of expensive and draining litigation that could ensnarl Wall Street for years to come. Read more
Plenty of Demand for Housing in 2014
Plenty of pent-up demand will help support the housing recovery in 2014 and beyond, helping to offset the impact from increasing mortgage rates as stated in the recent Kiplinger Letter. Last year, 13.6% of adults aged 25 to 34 were living at home with their parents…the highest share in over a decade and two percentage points over the historical norm. That’s 800,000 young adults who will be in the market to buy or rent their own digs. Expect more slow seepage than a swift flood, given high student debt levels, the tough job market and rising mortgage rates. Years…not months…of readjustment.
Home Prices Rise Again in September
Home price growth resumed in September after slowing down a bit, DataQuick noted in a new research report. Besides the short summer pause, home price growth has spread consistently across the country over the past 12 to 18 months. Here’s a small excerpt from the DataQuick report.
According to Gordon Crawford, Ph.D. and vice president of analytics for DataQuick, this steady increase in home prices should have some immediate implications on various areas of the housing market.
“We expect that the home price growth we have experienced as of late will begin to affect multiple areas of the housing landscape,” Crawford said. “Some immediate implications to look for include an increase in home price listings and overall sales as homeowners with negative equity are gradually swept toward a position of positive equity, a decrease in foreclosures as homeowners have the equity to sell and avoid default, and an increase in demand for home equity lines of credit as borrowers look to tap into increased equity from home price growth.”
Just how important is home buying to the U.S. economy? It’s worth trillions…not just from home sales, but in state and local government revenue, sales of furniture, appliances, etc., and the spin-off from income earned by construction crews, Realtors and more. All told…$1.30 to $1.80 in economic activity from every $1 of housing sales. And some state economies are more dependent than others on real estate. It accounts for 17% to 19.5% of the economies of Fla., Ariz. and Nev., for example, compared with only about 12% of all economic activity in Neb., Ky. and W.Va.
Economic News
Sales of Existing U.S. Homes Fall As Affordability Drops
Purchases of previously owned U.S. homes fell in September for the first time in three months, retreating from an almost four-year high as rising prices and mortgage rates discouraged would-be buyers.
Sales dropped 1.9 percent to a 5.29 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of 67 economists in a Bloomberg survey called for the pace to slow to 5.3 million. Prices climbed 11.7 percent, pushing affordability to an almost five-year low, the group said. Read more
Jobs Report
The Sept Jobs numbers were released. But at the end of the day the figures didn’t matter because the markets continue to feel that QE Unlimited will continue to ride on…and rightly so.
The Labor Department reported that employers added 148K workers in September, below the 183K expected. For July and August, the numbers were revised up by a total of 9K while the Unemployment Rate fell to 7.2%, the lowest level since November 2008. The Labor Force Participation Rate, a measure of how many people are looking for work, was unchanged at 63.2% after falling in August to a 35-year low. There was nothing in this Jobs Report to get excited about.
More Americans Than Forecast Filed Jobless Claims
More Americans than forecast filed applications for unemployment benefits last week as California continued to work through a backlog.
Jobless claims decreased by 12,000 to 350,000 in the week ended Oct. 19 from a revised 362,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a decrease to 340,000. Applications in California remained elevated and analysts weren’t able to determine how many non-federal workers filed due to the government shutdown, a Labor Department spokesman said. Read more
Consumer Sentiment falls to 73.2 for the last reading in October and the lowest
since December 2013. and below the 74,5 expected.
Durable Goods Orders Rise
Orders for long-lasting U.S. goods increased by 3.7 percent in September. Economists in a consensus survey had expected durable goods to rise by 2 percent, following August’s 0.1 percent rise.
Sources: CNBC, Bloomberg, CNN, MMG, Housingwire