Short-term locking, which is measured by days to a few weeks. MARKET WRAP:
The recommendation is to lock into Mortgage Rates for the Short-term, which is measured by days to a few weeks. Remember that Mortgage Rates move in the opposite direction of Mortgage Bond Prices. Hence, it is important to monitor the Bond Market. Bond prices have been able to improve considerably over the past 8 trading sessions, but were halted by ceiling of resistance.
Mortgage Bonds started the week to the downside but quickly rallied as Stocks tanked on Italian political concerns and as investors looked to take some
profits. The 3% Bond rose 59bp to end the session at 103.56. The 3% coupon finished the week at 103.62, +3bp. Stocks tanked on concerns as the Dow fell 216.40 points to 13,784 in reaction to the Italian elections and as investors looked to cash in some chips.
Stocks saw meager gains and the Dow wasn’t able to hit a new fresh record high. The S&P 500 closed at 1,518.20 up 3.52 points, the Dow gained 35.17 points to 14,089.66 while the Nasdaq was up 9.55 points to end at 3,169.74. Oil was last seen at $91/barrel down $1.09. Next week’s big data point is Nonfarm payrolls where it is expected that employers added 165K new jobs in February.
Housing News
Home prices rose 7.3% last year, according to the latest annual report from Standard & Poor’s/Case-Shiller Home Price Indices.
S&P/Case-Shiller Home Price Index released Tuesday, showed its national home price composite rising 7.3% in 2012, while the 10- and 20-city composite indices posted annual returns of 5.9% and 6.8%, respectively.
“Home prices ended 2012 with solid gains,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “Housing and residential construction led the economy in the 2012 fourth quarter. In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, 9 cities and both composites posted positive monthly gains. Seasonally adjusted, there were no monthly declines across all 20 cities.”
Pending Home Sales rose by 4.5% in January, well above the 1.0% expected.
New Home sales in January jump 16% to 437K units annually vs the 383K expected.
Top 2013 Real Estate Trends
“Its tough to make predictions, especially about the future.” Yogi Berra
Wouldn’t the real estate business be so much easier if we had a crystal ball? Guess what? You do have one if you choose to pay attention to everything around you. Use it and you’ll be better off in 2013 and beyond.
Here are some reasonable predictions about what we might see in 2013, and more importantly, how you might capitalize on them.
- Interest rates will begin to rise slowly. Let me say right up front, I’m not an economist but many of them, along with lots of other industry analysts, say there’s little doubt rates will rise. And by the fourth quarter of 2013 we’re liable to see them a full point higher than they are right now. How do you capitalize on this? You have to go at your business with a stronger sense of urgency. Yes, you’ll find some sellers who’ll tell you they want to wait till prices raise more. The thing they’re not taking into account is that the longer they wait, the more they themselves will be paying in interest for their new home. So it works both ways. Buyers – and sellers – need to have a sense of urgency during low interest rates.
- Home sales will rise between six to eight percent. Bullish analysts predict upwards of 10 percent increases; bears say go as low as two percent. Somewhere in the middle is reasonable. Now, how do you cash in on this information? It’s easier to sit on a stool with three legs instead of one. If you broaden your base with some of the residual REO and short sale business with rising traditional home sales, you’ll be sitting pretty – and not fall on your face. Last year was a tough year on the REO side because of the election year and everything was up in the air. There was a lot of uncertainty, but now I believe we’ll see more distressed properties entering the market along with a strengthening traditional position.
- We’ll see more activity among second-time homebuyers. Now that the election is over and the economy is showing some positive signs, I think we’ll see more “move up” buyers looking for bigger, nicer homes. NAR says markets across the country will have upwards of 75 percent of second-time buyers during 2013. That’s an awesome market to target so don’t miss out.
- Consumers will continue to use the latest technology in their search for real estate. We’ve known for years people search properties online before they talk to agents, but now they’re using mobile devices (iPads, iPhones, etc.). How does your website appear on an iPhone? If you don’t know, find out. There’s a chance it may not look the same way it does on a computer. That means users will leave your site and find one that does look right. Get it fixed or lose business. It’s just that simple.
Economic News
Consumer Confidence in February surges to 69.0 from 58.6 in January and above the 62.0 expected.
Durable Orders in January fell 5.2%, below the -3.5% expected. The previous month was revised lower to 3.7% from 4.3%.
Sources: Tracey C. Velt Real Trends, Bloomberg,MMG, Housingwire, CNBC