Arizona mortgage rates & news - June 26, 2009

Interest Rates

In last week’s Update I said “My guess is we will see rates move up next week”. So much for my forecasting skills! Rates remained essentially flat for the week with a slight downward pattern at the end of the week. The Federal Reserve made it know after their meeting mid week that they had no plans to buy more Treasuries and they are still committed to buying $1.25 Trillion in Mortgage Backed Securities (MBS) in 2009. They will “continue to evaluate timing and amounts” of any future increases in purchases. This statement helped keep the market calm which will hopefully be the case for the near term. We do NOT need any surprises!

Note that actual market rates vary geographically and by lender, credit score and Loan to Value.

Source: Federal Reserve Statistical H.15. 

Mortgage Industry Update

• There has been some discussion in D.C. about increasing the Making Home Affordable Refinance limit from 105% LTV to as much as 125% LTV.
• In March FNMA said they would not guaranty loans in condo communities with fewer than 70% sold up from the previous guideline of 51%. Some Senators including Barney Frank have asked FNMA to “make some adjustments” to their guidelines.
• The National Association of Home Builders (NAHB) wants the condition of the home to be taken into consideration for home valuation. They argue that distressed homes are typically not as well maintained or damaged compared to others. They have suggested extending the geographical area for comps and/or the time frame for recent sales.
• The Home Valuation Code of Conduct (HVCC) is getting a lot of attention from the mortgage and housing industry and it is not positive. There are many problems with the process which basically uses a centralized clearinghouse or management company to do appraisals. A big problem is there cannot be ANY communication between the lender, Realtor, Seller, etc and the actual person doing the appraisal. There are many groups actively seeking to lobby for changes in the process. One of these is Think Big Work Small. They have developed a petition which we have signed and recommend interested parties also sign. If you are interested their e-mail address is tbwsdaily@thinkbigworksmall.com
• Reminder: Smart Financial will pay for the appraisal on your first loan with us!

Good News

• Existing home sales for May were up 2.4% to 4.77 million just below expectations.
• Existing home inventory for May was at 9.6 months down from 10.2 months in April.
• Median home price for May was $173,000 down almost 17% from May 2008.
• Durable goods were up 1.8% compared to forecast of down .9% (even with the increase in May year over year durable goods are down almost 27%).
• Continuing unemployment claims were up slightly to 6.74 Million.
• New home inventory was at 10.2 months down slightly from 10.4 months.

Statistics of Interest/Concern

• The Government said this week that it had raised 80% of the funds it needs for FY 2009.
• The Securities Industry and Financial Markets Association (SIFMA) says Q3 2009 GDP will grow .8%.
• The Labor Department said that mass layoffs (50 or more employees from single company) increased in May and were the highest since 1995.
• Quarterly CEO Economic Outlook Index was 18.5 for Q2 2009 compared to -5 for Q1 2009 (above 50 indicates expansion in the economy).
• Weekly jobless claims were up slightly to 627,000.
• New home sales market share of 7.45% in May was the lowest since 1968.

Commentary

The Harvard University Joint Center for Housing Studies issued a report that said the housing recovery will be slow due to job losses and continued foreclosures. I wonder how much that study cost?

Call today to get your Arizona mortgage started.

Burt Carlson
Smart Financial Mortgage
(602) 803-9660
Burt@gosfm.com

Tagged as: Arizona mortgage rates, Home Valuation Code of Conduct