Posts Tagged Mortgage Market Update

Salt Lake City Mortgage Market Update for January 13, 2009

Stocks are trading a bit higher today, particularly the NASDAQ which historically has been a good indicator of what mortgage rates will do: when the NASDAQ is down rates are down; when the NASDAQ is up, rates are up.  This is because of the inverse actions of Stocks and Bonds.  When Stocks look bad investors move their money to lower yield, yet safer Bonds thus adding strength to them and lowering interest rates also on Mortgage Bonds.  When  Stocks look good investors transfer their money from safer, lower return Bonds to riskier but higher earning Stocks.

So far this morning the +0.49% uptick in the NASDAQ hasn’t had any real effect on Mortage Interest Rates though with rates at the same point they were at closing yesterday.

The Senate votes on the Stimulus Plan today and we’ll see what effect that has on the Stock Market.  One modification from Obama’s plan that I’m not happy about is changing the original plan’s tax credit for homebuyers from $15,000 for all home buyers this year  that does not have to be paid back to an $8,000 tax credit for first-time home buyers that only has to be repaid if the home is resold within 36-months of purchase.  This isn’t much different than the current $7,500 tax credit, and as many real estate industry advisors have stated isn’t helping much anyway because many first-time home buyers don’t have the initial downpayment to buy a home in the first place to take advantage of the tax credit 10 months from now.

If the government really wants to do something to stimulate home sales they need a credit that can be used at the closing table for down payment purposes or to pay closing costs, and they need to make it available to all home buyers for the next 12 months, or so.

But what do Realtors and loan officers know?  We’re just the one’s in the trenches dealing with home buyers everyday, so we must be way more out of touch with the market than some congressman that has never represented a home buyer in a purchase transaction.

With mortgage bonds facing resistance and stocks on the cusp of a rally today the market favors locking if you have a loan closing soon that isn’t locked yet.

For Salt Lake City, UT today’s average mortgage rates are as follows:

30-year fixed: 5.125%

15-year fixed: 4.625%

Conforming Jumbo 30-year fixed: 5.625%

FHA 30-year fixed: 5.50%

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Salt Lake City Mortgage Market Update for January 9, 2009

Mortgage rates in Salt Lake City have been up and down, but primarily ending the day pretty well.  We are seeing many pricing adjustments throughout the day, which is very unlike even a year or so ago when a lender or bank would release a rate sheet and that was pretty much the rate for the week.  Now, it’s a crap shoot from minute to minute.  As I write this I just received the third reprice of the day for one lender.

Nationally the average 30-year rate is running about 5.01%, and the one week projection is 5.00% and one month projection 5.02% so rates look to remaining within the current range for at least a few weeks.

The bad news, the Labor Department released their December figures this week and 524,000 jobs were lost nationwide last month, 24,000 more than anticipated (which I think it’s pretty bad that they even “anticipate” job losses).  Overall over 2,600,000 jobs were lost during 2008, the largest number of jobs lost since the disbanding of the war machine in 1945 as life returned to a peacetime status.

I’ve said it before, the real estate problems today are not the cause, they were just the first symptoms of a much, much bigger problem, which now has become very apparent.  If people don’t have jobs, or their hours have been cut dramatically because of a business slowdown, they can’t meet their bills.  And since their mortgage is usually the largest bill they have every mont it is the easiest to fall behind on.  I feel that until we as a nation start holding our elected officials and their self-serving policies accountable for this mess nothing is really going to change.

The upside?  Well, nationally the unemployment rate is 7.2%, but that means 92.8% of Americans are still employed.  And Utah’s unemployment rate is still nearly half the national average at just 3.4%, which is the same as 1998 and 2% less than 2004.  So at least for now Salt Lake City and Utah is still going strong and a great place to live and work.

For Salt Lake City, UT today’s average mortgage rates are as follows:

30-year fixed: 4.875%

15-year fixed: 4.625%

Conforming Jumbo 30-year fixed: 5.25%

FHA 30-year fixed: 5.00%

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Salt Lake City’s Mortgage Market Update for Jan. 6, 2009

I hope everyone had a great holiday season and are adjusting well to returning to real life and work again.  I’ve returned to work with incredible news for the new year.  The Federal Government has started it’s $500 Billion purchase of Mortgage Backed Securities (MBS) which has spurred interest by investors in Mortgage Bonds and has driven the rates even lower than last week (which were pretty dang good).  Analysts are saying that we could see some record low rates over the next three months.

In other news, the Board of Realtors has released November’s data for home sales in Utah.  Sales overall in November were lower than November of 2007 and 74% of homes sold in Salt Lake City and surrounding areas were below $300,000.  I feel this goes back to my theory that since there is no more stated income loans and borrowers must be able to document income and assets, that is all the majority of Utah borrowers can qualify for.

For instance, according to the Census Bureau’s income data (which is collected from the IRS) the median household income (the amount that 1/2 of people make less than and half make more than) is Utah is about $62,000 a year.  This would qualify half of Utahan’s for a home of $243,000 or less.

This number is probably skewed a bit too, since those that sign the front of checks don’t report their income the same way as those who sign the back.  Many business owners do not W-2 themselves, but rather file a Schedule C or K in which they work hard to minimize their taxable income by writing-off as much as they can, so their true take-home income from being a business owner is usually way understated.  In reality they can afford a $500,000 home (or more), but they can only on paper prove they qualify for a home in the $300,000 price range or less.

So until HUD (who oversees lending guidelines for FHA, Fannie Mae and Freddie Mac) changes their guidelines for calculating self-employment income, I think we are going to see much of the same, with homes under $300,000 selling quickly and those over $300,000 staying on the market for longer periods of time.

If you are looking to refinance a home or purchase a new home, right now is the time, though.  Rates are truly as low as they’ve been in over five years, and definitely the lowest they’ll be for a while.  So don’t delay.  Call me for a no-charge review of your current mortgage and if refinancing will benefit you.  Also, if you are looking at a home, call me for a mortgage quote or to get you pre-approved for the loan.

For Salt Lake City, UT today’s average mortgage rates are as follows:

30-year fixed: 4.75%

15-year fixed: 4.625%

Conforming Jumbo 30-year fixed: 5.125%

FHA 30-year fixed: 5.00%

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