***Smart Financial Weekly Mortgage Update August 21, 2009***
Interest Rates
Mortgage rates declined about .25% for the week as Treasury Bonds declined about the same. Then today rates moved up on better than expected housing news which pushed equities higher and Fed Chairman Bernake’s comments on the economy. The Treasury is selling $109 Billion in Bonds next week which is close to the weekly record of $115 Billion sold in July. Remember depending on the success of these sales mortgage rates could be impacted.
When Rate
This Week 5.12
1 Month Ago 5.20
1 Year Ago 6.47
2 Years Ago 6.52
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 was a very good story by CNBC this week on the problems associated with the new Home Valuation Code of Conduct (HVCC) for appraisals. I think we all know that this process is not good for the housing business. It hurts everyone including consumers, Realtors, lenders and appraisers. If you are interested in reading the article please let me know and I will forward it to you. Also, there is legislation (HR 3044) that has been proposed placing a moratorium on HVCC for 18 months that has 54 co sponsors in Congress. However, the more support the better. If you would like me to forward the link to sign the petition please let me know.
• Mortgages 60 days or more delinquent increased for the 10th straight quarter and is now at 5.81% which is an all time high according to Trans Union. The good news is the rate of increase is declining.
• Mortgages 30 days or more delinquent were at 9.24% at the end of the second quarter said the Mortgage Bankers Association (MBA). This is the highest rate since they started keeping such records in 1972.
Good News
• The NAR said for July existing home sales increased 7.2% the biggest monthly increase in 10 years! July was also the fourth straight month of increases. The existing home inventory was 9.4 months. Also, about one third of sales nationwide were foreclosures or distressed property sales.
• Home builder confidence rose to 18 for August which is the highest since June 2008. Anything above 50 reflects a positive view of the market. April 2006 was the last time the number was 50 or greater.
• PPI (Producer Price Index) fell .9% in July. For the last 12 months the PPI has declined 6.8% the biggest one year decline since 1947.
• The leading economic indicators index was up .6% in July for the fourth straight month.
Statistics of Interest/Concern
• Credit card delinquency showed signs of stabilization in July as major issuers reported a slight decline in delinquency.
• With two months left in the fiscal year that ends September 30th the government has spent $4 TRILLION dollars.
• Commercial real estate defaults are at $2 BILLION and could hit three billion by the end of this year says Fitch Ratings Financial Times.
• July housing starts came in at 581,000 versus forecast of 599,000.
• Building permits in July were at 560,000 versus forecast of 577,000.
Foreclosure Headlines
• While not a foreclosure headline First American Core Logic report shows about one third or 15 million homeowners are upside down in their homes. In addition their report says another 2.5 million are very close. Obviously this can lead to more foreclosures.
• About half of all negative equity is in Florida, Nevada and Arizona.
• The percentage of loans in foreclosure increased to 4.30% in the second quarter from 3.85% in the first quarter according to the MBA.
• The MBA also said the percentage of loans in which foreclosure action was started dipped in the second quarter to 1.36% from a record high of 1.37% in the first quarter.
Job Market Headlines
• Initial weekly jobless claims were 576,000 which was slightly higher than the expected 550,000.
• The four week moving average of weekly jobless claims was 570,000 slightly more than the forecast of 566,000.
• The Labor Department said in July 17 states had a reduction in unemployment compared to only five states in June.
Commentary/Observations
The IMF said this week that the global recovery has started but that it will not be simple or easy.
As many of you are aware Twittering is the current rage in communicating. A group called Pearl Analytics is reporting based on their work that 40% of twittering is “pointless babble”.
Readers Digest put its U.S. operations into bankruptcy this week.
The Colorado minimum wage is set to decline next year. Colorado is one of ten states with the minimum wage tied to inflation. Wage earners are expected to lose about three cents per hour.
If you have any mortgage or related questions I can be reached at (602) 803-9660 or by e-mail at burt@gosfm.com.
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Alexander Williams 08.27.09 at 1:17 pm
Good and complete information about Arizona mortgage rates. In all country, situation is hard and foreclosures are rising. Rates are important to help this statistic.