Posts Tagged Mortgage rates

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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Appraisals hurting home sales

A huge stumbling block I’ve come across in the past month or so is getting an appraisal that is acceptable to a lender.  Lenders are being very skittish conservative about lending their money even though they receive billions of it from the Federal Government over the last few months.  One way they seem to have found a way to hold onto this stimulus money to fluff their bottom line is by introducing stricter acceptable appraisal guidelines.  Guidelines such as:

Comparable sales used to determine value can’t be older than 90 days

Comparable sales used to determine value can’t be farther than 0.50 miles in urban areas, 1.0 miles in suburban areas and 5.0 miles in rural areas.

And they are holding fast to these policies.  Just a few months ago comparables up to 6 months old were acceptable.  The distance from the subject property hasn’t changed much, if at all.  What has changed though is that lenders will not allow exceptions even when noted by the appraiser in the “Analysis” and “Additional Comments” sections of the appraisal.  Many times an appraiser has to go back more than 90 days or farther out than 1 mile from the subject property to find a like-property comparable.  For instance, if you have a fairly new home in a neighborhood surrounded by older homes.  Or your home is in a new neighborhood that hasn’t had many resales yet with which to determine value by.

What’s happening is that appraisers have had their hands tied on being able to accurately and honestly valuate your home.  The banks are now dictating what your home is worth, not the free market.

If the new Home Valuation Code of Conduct (I love that name, like the government is looking after you) goes into effect on May 1, 2009 this situation will just get worse and worse.

Remember, the banks are in it for themselves.  Independent brokers are in it for your benefit.  We are small businessmen and depend on your business – and the business of your friends and family – to stay in business.  Like any small business, if we don’t do right by you we don’t stay in business long – as seen with the huge exodus of loan officers and real estate agents from the industry over the past year.  Those that were in it for the quick buck haven’t survived.  Those that do this to help home buyers and home owners, and in turn help themselves and their family’s welfare, are still here.

So support your local independent broker.  And keep your rights as a homeowner in the forefront by contacting your elected officials and weighing-in on issues that harm you as a homeowner like the new HVCC.

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

30-year fixed: 5.125%

15-year fixed: 4.75%

Conforming Jumbo 30-year fixed: 5.75%

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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