Market Update
Friday May 6,, 2011 12:14 pm ET
By John Sauro
Bond Face Technical Resistance
Take a look at the chart and you can see a “triple top” forming. This means it will take a lot for Bonds to break through that level of resistance. Mortgage rates have improved a bit and I suggest locking into a rate while they are attractive. Don’t make the mistake of waiting, only to see the rates move back up again. For those who haven’t refinanced, this may be another opportunity to do so.
Home Buyers – Wake Up!
Home buyers are not prepared to take out a mortgage and answer basic mortgage questions nearly half of the time.
In a recent survey by an online Real Estate Search Provider, home buyers were asked about their general knowledge of mortgages and mortgage facts. A shocking, 44 percent admitted they are not confident in their knowledge of mortgages or the mortgage process.
More than half of prospective home buyers who were polled do not understand how adjustable rate mortgages work. When asked if interest rates on 5/1 ARMs always reset higher after five years, the majority of home buyers answered yes.
Mortgage professionals were surprised to hear these results.
You would think that people would be more in tune with home financing, especially after the last few years of it being in the media spotlight. Its amazing how so many people are willing to take out the largest loan in their lifetime without understanding essential information about mortgages. This is why the government should spend more time on educating people about homeownership and financing then they do on over regulation.
Lender fees seem to be another trying topic, one-third (34 percent) of the respondents do not understand that lender
Other areas home buyers are ill-informed are:
- Forty-Five percent of polled prospective home buyers believe that they should always buy mortgage discount points when obtaining a mortgage.
- Fifty-five percent of the respondents in the study do not understand that mortgage rates vary throughout the day.
- Thirty-seven percent of prospective home buyers who were polled believe that pre-qualifying for a loan means they have secured financing.
- Forty-two percent of the polled prospective home buyers do not understand that Federal Housing Administration (FHA) loans are available to ALL buyers.
Jobs, Jobs, Jobs
The economy added 179,000 private sector jobs last month, according to a report that was a bit below expectations. Economists had expected the report, which comes two days before the key nonfarm payrolls number the government will issue Friday, to show a gain of 200,000 jobs. So far this year, employers announced 167,239 job cuts, 24 percent less than the 219,509 layoffs by the same point last year.
There was more bad news than met the eye to Friday’s jobs report, even beyond the bump up in the unemployment rate.
While the top-line number of 244,000 jobs created sounded great initially, the internals were somewhat weaker. The household survey, an actual head count, suggested that the job creation barely kept up with the expansion of the labor force. Nothing in the data supports that many of the millions of discouraged workers were coming off the sidelines looking for jobs. The actual amount of people out of work, which also was unchanged at 13.7 million.
The unemployment rate ticked up to 9% from 8.8%. Another measure of unemployment rose as well: the so-called “real” unemployment rate, which rose to 15.9 percent, up two-tenths from the prior month. This rate measures not just those looking for work and unable to find jobs but also those “marginally” attached to the labor force and those who are working part-time but who want full-time work.
Update on FINREG (Financial Regulation)
Protect your homes value and your right to affordable home financing.
The focus is now on the Dodd-Frank Bill.
With implementation of the Dodd-Frank Bill a couple of months away, much has to be done to repeal or at least modify language in the Bill.
This Bill is another government power grab and will its unintended consequences will ad further pressure to the real estate market.
Get involved and let you elected officials know your concerns.
Already prepared template letters and contact info for your Congressman and Senator are available at: