Interest Rates
Mortgage rates remained within a narrow range with a slight downward bias as the short week ended. While it continues to be unlikely that we will see sub 5% rates any time soon if ever recent rates in the mid to low 5%’s should be attractive to home buyers.
When Rate
This Week 5.32
1 Month Ago 5.29
1 Year Ago 6.35
2 Years Ago 6.63
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
• HR 3044 is the proposed legislation that directs the Federal Housing Finance Agency (FHFA) to suspend the Home Valuation Code of Conduct (HVCC) for 18 months. It was proposed late last week and is in Committee as I write this. The HVCC has caused Realtors, lenders, home buyers and appraisers a lot of grief not to mention the loss money. It needs to be suspended then eliminated. If you agree contact your local Congressman and let him/her know how you feel.
• Freddie Mac received $6.1 Billion from the Treasury Department Wednesday in an effort to keep the company technically solvent. So far they have received $51.7 Billion and have another $149.3 Billion available from Treasury. For the first quarter ending March 31, 2009 Freddie Mac lost $9.9 Billion.
• On Wednesday the Obama Administration announced it was increasing the Making Home Affordable refinancing program’s LTV from 105% to 125%. This program is only for Fannie Mae and Freddie Mac loans.
• Option Arm Story: According to Yahoo Finance United Western Bancorp a Denver based holding company whose primary subsidiary is a community bank called Western Bank sold $47.3 Million in Mortgage Backed Securities (MBS) to an unrelated third party for $378,000! The primary asset was Option Arm loans.
Good News
• The ISM report on Midwest business activity in June rose to 39.9 up from May’s 34.9. Below 50 indicates economic contraction.
• Case-Shiller home price index declined in April .6% a slower rate of decline than in March which was -2.2%.
• The ISM manufacturing index was 49.8 in June up from May’s 42.8. Below 50 indicates economic contraction.
• Pending home sales were up .1% in May.
Statistics of Interest/Concern
• June jobs report showed 467,000 more people out of work this number much higher than forecast of 365,000.
• June unemployment rate of 9.5% was up from May’s 9.4%. The 9.5% was the highest since August 1983.
• Prime mortgage delinquency of 60 days or more has increased from 1.1% in March 2008 to 2.9% in March 2009.
• May was the third consecutive month that new foreclosures were at 300,000.
• Defaults on loans with Mortgage Insurance rose in May following 3 consecutive months of decline.
• Consumer confidence fell to 49.3 in June below the expectation of 55.
• According to Zillow 20 million of the nation’s 93 million homes (includes condos, multi units, etc) are upside down.
• U.S. construction spending was down .9% in May the lowest rate in 5 years.
Commentary
This month’s job report included a number that does not get much publicity. That number is the Underemployment rate. This is the number of workers who are working part time because they cannot find full time work. In addition, the Underemployment number includes those who have stopped looking for work. The June Underemployment rate was a record 16.5%!
We want to wish all of you a happy Fourth of July! Please remember to fly your flag and if you don’t have one go buy one. The celebration of our county’s independence is a good time to remember how lucky we are to live here. It also gives us a chance to honor those who have paid the ultimate price for our independence and freedom! Just last month we were reminded again about the price to be paid for freely expressing your views. God bless America!
If you are considering buying a home and want to learn more about your options please give me a call at (602) 803-9660 or contact by e-mail at burt@gosfm.com.
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