Welcome to the "Z" Team!

Mortgage rates fell across the board this week, after having inched higher the last few weeks from all-time lows, Freddie Mac reports in its weekly mortgage market survey.

Here’s a closer look at rates for the week ending Aug. 30:

•30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.6 point, dropping from last week’s 3.66 percent average. A year ago at this time, 30-year rates averaged 4.22 percent.

•15-year fixed-rate mortgages: averaged 2.86 percent, with an average 0.6 point, also down from last week’s 2.89 percent average. Last year at this time, 15-year rates averaged 3.39 percent.

•5-year adjustable-rate mortgages: averaged 2.78 percent, with an average 0.6 point, dropping from last week’s 2.80 percent average. Five-year ARMs averaged 2.96 percent a year ago at this time.

•1-year ARMs: averaged 2.63 percent, with an average 0.4 point, dropping from last week’s 2.66 percent average. A year ago, 1-year ARMs averaged 2.89 percent.

Source: Freddie Mac

Good news Update! Home sales and prices are ticking up, despite a sluggish economy. In fact, the rebound has economists predicting that housing will likely add to economic growth this year for the first time in seven years.

Existing-home sales increased 2.3 percent in July and are up more than 10 percent compared to year-ago levels, the National Association of REALTORS® reported last week. What’s more, home prices soared 9.4 percent in July compared to last year at that time—to $187,300—marking the largest price gain in six-and-a-half years.

New-home sales also have been inching up, rising 3.6 percent in July and up more than 25 percent compared to last July, the Commerce Department recently reported.

The “evidence that the housing market is recovering…is fairly clear across a wide range of reports,” John Ryding, an economist at RDQ Economics, told the Associated Press. “[Housing] is now becoming a small positive for the economic outlook.”

Economists say the rebounds appear to be sustainable and will likely climb even higher, particularly with modest economic growth, future job gains, ultra low mortgage rates, and housing affordability at near record highs. We agree, your regional market reflections?

Source: “Rise in U.S. Home Sales Reflects Steady Improvement,” The Associated Press (Aug. 23, 2012)

Fewer first-time home buyers are in the housing market nowadays, accounting for 34 percent of all buyers in July. While that percentage has inched up slightly as of late, it still remains far from the 40 percent levels first-time home buyers generally account for in the housing market, according to the National Association of REALTORS®.

One of the biggest obstacles? Saving for the down payment, according to recent home buyer surveys. The second-biggest hurdle cited was poor credit history, which was making it difficult for first-timers to qualify for a mortgage. A high unemployment rate among younger adults — who often make up the biggest group of first-timers — is also holding many back. Also, first-time home buyers, who need financing for their home purchase, are increasingly losing out to investors who are willing to pay entirely in cash.

“First-time buyers are vital to boosting sales, especially during downturns, since when they buy a home, they aren’t also selling a previous home to finance the purchase,” according to MarketWatch.

More info. at source: “Fewer Home Buyers Are First-Timers,” MarketWatch (8/22/12)

Inreresting update! Mortgage applications continue to decrease as mortgage rates inch higher from their record lows set a few weeks earlier, the Mortgage Bankers Association.

Mortgage applications for the week ending August 7 dropped 7.4 percent. Mortgage applications just for refinancing fell 9.2 percent — marking the third consecutive week that refinancing applications have dropped. Refinancing applications make up the biggest bulk of mortgage applications on a weekly basis.

However, mortgage applications for home purchases, a future gauge of home buying, picked up some last week, rising slightly by 0.9 percent during the week.

The MBA reported that 30-year fixed-rate mortgages moved up 10 basis points last week, averaging 3.86 percent. So, do you see this happening in your region?  

Source: “U.S. Mortgage Applications Fall as Rates Jump in Latest Week,” CNBC.com (Aug. 22, 2012)

While college-educated workers usually pull down higher incomes than those who do not obtain a post-secondary degree, a new report indicates that many new college graduates will be unable to obtain a mortgage because their student loans will push their debt-to-income ratio too high.

Student loan debt soared to $1 trillion this year. The report from Young Invincibles, “Denied? The Impact of Student Debt on the Ability to Buy a Home,” found that today’s college graduates are actually worse off than previous generations, financially speaking. The authors estimate the average 30-year-old college graduate looking to purchase a home would need to spend about half of his or her monthly income on mortgage, student loan, credit card, and car payments, leaving them ineligible for many home loans, including those guaranteed by the Federal Housing Administration.

“As education debt grows, it pushes more borrowers out of the housing market, potentially adding another drag to an economy only just emerging from the Great Recession,” said Rory O’Sullivan, policy director at Young Invincibles.

The report does not factor in credit scores or down payments, which also greatly affect mortgage attainability. Please provide your thoughts.

Source: “Student Debt Pushes Homes Out of Reach,” Pittsburgh Post-Gazette (08/21/12)

For home buyers who are looking for a chance to buy low, they may not want to drag their feet too much longer.

“Home prices have probably bottomed in most markets,” David Crowe, chief economist at the National Association of Home Builders, said in an NBC News-hosted Web chat with online visitors last week. “Mortgage rates are not likely to go down much further and will eventually rise as the economy recovers. Home builders are hungry and while you will still have to pay a fair price, you may not get a better bargain than now before all the rest of the demand comes back.”

Crowe says one hurdle that may slow the recovery is the inability for some home buyers to still not be able to qualify for financing due to banks’ tightened underwriting conditions in the last few years.

But in places where the inventory of distressed homes is decreasing and demand is growing because of an improving employment picture, “housing is beginning to see some recovery, prices are picking up, and more building is occurring,” Crowe says.

However, in our area bargains will largely depend on the area and price range, plus careful analysis by professionals! Are you seeing this in your region?

Source: “Housing Economist: Good Time to Get a Bargain,” NBC News (Aug. 17, 2012)

Are we beginning to see a new trend? Fixed-rate mortgages once again inched up this week, the third consecutive week of increases after reaching all-time lows, Freddie Mac reports in its weekly mortgage market survey.

“The latest economic indicators point toward low inflation but gradually stronger economic activity which placed further upward pressure on long-term Treasury yields and, in turn, fixed mortgage rates,” Frank Nothaft, Freddie Mac’s chief economist, said about why mortgage rates have been reversing course in recent weeks.

Here’s a closer look at mortgage rates for the week ending Aug. 16:

•30-year fixed-rate mortgages: averaged 3.62 percent, with an average 0.6 point, this week, increasing from last week’s 3.59 percent average. A year ago at this time, 30-year rates averaged 4.15 percent.

•15-year fixed-rate mortgages: averaged 2.88 percent, with an average 0.6 point, rising from last week’s 2.84 percent average. Last year at this time, 15-year rates averaged 3.36 percent.

•5-year adjustable-rate mortgages: averaged 2.76 percent, with an average 0.6 point, falling slightly from last week’s 2.77 percent average. Last year at this time, 5-year ARMs averaged 3.08 percent.

Source: Freddie Mac

While much of the focus the last few years has been on foreclosures and short sales, some experts say it’s caused some to overlook what’s been happening lately with nondistressed sales.

Some housing surveys have recently shown that when distressed sales are excluded from the picture, the market share of nondistressed homes is at its highest level since August 2008. From January to June, nondistressed sales were up 15 percent year-over-year, according to CoreLogic.

Shrinking inventories of homes for sale and strengthening housing demand from home buyers has helped boost home prices. Home prices have increased 2 percent in June over May, when excluding distressed sales, according to the National Association of REALTORS®. Also, surveys have recently shown that nondistressed listings are staying on the market a lower number of weeks — averaging 11.7 weeks in June compared to 12.7 weeks in May, according to HousingPulse.

Source: “‘Normal’ Home Sales Soar Despite Obstacles,”RISMedia (Aug. 13, 2012)

The begnning of new trends? Fewer U.S. consumers fell behind on their home loans and credit card payments in the second quarter, reports TransUnion.

The rate of borrowers 60 days or more past due on their mortgages slipped to 5.49 percent from 5.78 percent in the first quarter of 2012. TransUnion expects mortgage delinquencies to continue to fall for the rest of the year as the economy slowly improves.

“The economy has not grown at a robust rate, but it does continue to slowly improve and we believe the improvement in mortgage delinquencies will follow a similar pattern,” Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit, told the Wall Street Journal.

Credit card holders 90 days or more past due fell from 0.73 percent in the first quarter to 0.63 percent in the second quarter.

Source: “TransUnion: U.S. Mortgage, Credit-Card Delinquency Rates Decline in 2nd Quarter,” Wall Street Journal (08/14/12)

A wide variety of watchers are sounding alarm bells over San Francisco-based bank Wells Fargo’s massive share of the home mortgage business.

Regulators and lawmakers are concerned about Wells Fargo’s dominance of the mortgage market, as it made 33.1 percent of new loans in the first half of 2012 and controls 18.5 percent on the servicing side.

The company is not suspected of any wrongdoing in reaching its status. However, as Mortgage Bankers Association CEO David Stevens explains, “If the market is too concentrated on one company, and if they were to change their strategy around mortgage originations or got into financial trouble and had to leave the market altogether, you could have market disruptions.”

Source: “Wells Fargo’s Home-Loan Dominance Stirs Concern,” Arizona Daily Star (Aug. 13 2012)