Jim Clooney Blog Page - Jim Clooney Org

30-year mortgage rate rises again: Zillow

12/4/2013

Real-estate website Zillow Inc. Z -2.93% said its real-time rate on 30-year fixed-rate mortgages increased in the latest week, rising for a second straight week.

The 30-year fixed-mortgage rate on Zillow's Mortgage Marketplace, which tracks mortgages on the company's website, was up at 4.25% from 4.14% a week earlier.

Although Federal Reserve Chairman Ben Bernanke has said the central bank is committed to keeping short-term interest rates low for an extended period, Zillow expects upward pressure and volatility in mortgage rates, according to Svenja Gudell, economic research director at Zillow.

"This week will bring more movement as a lot of important economic data is set to be released," Ms. Gudell said.

Zillow said the rate for a 15-year fixed home loan was 3.22% compared with 3.13% last week. The rate for a 5-1 adjustable-rate mortgage was 2.72%, unchanged from the previous week. A 5-1 ARM has an initial rate that applies for the first five years of the loan and then adjusts annually.

Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the company's website.

Source: http://www.marketwatch.com/story/30-year-mortgage-rate-rises-again-zillow-2013-12-03?reflink=MW_news_stmp
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Mortgage Rates Start Lower, but End Higher After Fed Announcement

10/31/2013

Mortgage rates began the day lower, with several lenders releasing their best rate sheets in nearly 5 months. The day progressed well in the secondary mortgage market with MBS prices (the "mortgage backed securities" that most directly affect rates) rising steadily into the Federal Reserve's policy announcement. When MBS prices move higher, rates move lower.

The Fed wasn't seen as likely to change monetary policy in any way at this meeting, but market participants may have justifiably been expecting a more cautious tone than they got. The Fed even removed verbiage alluding to the risks associated with recently tight financial conditions. Bond markets, including MBS, weakened quickly following the announcement, and many lenders revised rate sheets to fall more in line with yesterday's.

This is interesting because yesterday, we'd looked forward to today's data and events as holding the most promise for breaking the ongoing trend of "unchanged" (or close to it) rate sheets. As it happened, we did get a break of that monotony this morning, but rates returned to the same levels in the afternoon. As such the most prevalent Conforming 30yr fixed rate (best-execution) remains at 4.125%.

Loan Originator Perspectives

"Fed Statement released today confirmed markets' conviction that tapering is on hold pending improved data. Rates did lose some ground (after AM gains) following the Fed release, but stayed within recent ranges. Nice opportunity for buyers and refinance borrowers to obtain the lowest best execution rates since June, loan volume picking up as borrowers moved to obtain these desirable rates." -Ted Rood, Senior Originator, Wintrust Mortgage

"Following the FOMC statement, the rates markets took a turn for the worse, but not sure why. I think the losses today will be recouped over the next day or so. If you were unable to lock prior to the FOMC statement and the reprices for worse that followed, I would float over night as I suspect we will get most of these loses back." -Victor Burek, Open Mortgage

"I've been on a stream of recommending locks and exercising them for clients over the past several days. My bias is lock at this point, and today's FOMC announcement rattled the market, so my clients are happy. Outside of 45 day lock, I'd still recommend the client watch and try to get inside of 30 days. For those happy with the rate, lock now, don't look back." -Matt Hodges, Charlottesville Sales Manager, Presidential Mortgage Group

Ongoing Lock/Float Considerations

Uncertainty over the Fed's bond-buying plans and more recently over Fiscal Policy has been making for a tough interest rate environment.
A lack of data due to the government shutdown caused rates to experience moments of paralysis while headlines suggesting the shutdown might/might-not end, as well as a seizing-up of short term funding markets caused unexpectedly high volatility--enough to be felt in longer term rates like mortgages.
After a deal was reached to avoid going over the debt ceiling, funding markets thawed and rates returned to the same 'wait and see' range that existed before the Fiscal drama.
Markets continue to be most interested in economic data and its suggestions about the longer term trajectory of the economy. This will shape expectations for Fed policy in the coming months, and thus inform the direction of interest rates.
The stronger the data the more likely the Fed is seen as reducing asset purchases. Rates would rise under this scenario, but the most recent FOMC Meeting (and more importantly, the Fed's decision to hold off on tapering) suggests that they'll attempt to keep the pace of rising rates moderate as long as inflation isn't adversely affected. The delayed release of the September jobs numbers on October 22nd helps confirm that.
(As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario. There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

source: http://www.mortgagenewsdaily.com/consumer_rates/329853.aspx
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Average 30-year mortgage rate nears year’s high

9/11/2013

WASHINGTON – Average fixed rates on U.S. long-term mortgages neared their highs for the year this week amid signs of further strength in the economy.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan was 4.57 percent, up from 4.51 percent last week and close to this year’s high of 4.58 percent Aug. 22.

The average on the 15-year fixed mortgage rose from 3.54 percent to 3.59 percent, near the year’s high of 3.6 percent.

Long-term mortgage rates have risen more than a full percentage point since May, when Federal Reserve Chairman Ben Bernanke first signaled that the Fed could reduce its bond purchases later this year if the economy continued to strengthen. The bond purchases were intended to keep long-term loan rates ultra-low.

Among the indicators the Fed will consider in deciding whether to slow its bond buying is the government’s estimate that the economy grew at a 2.5 percent annualized rate from April through June – much faster than estimated. Economists expect growth to stay at an annual rate of around 2.5 percent in the second half of the year.

The Fed will meet Sept. 17-18, after which analysts expect it to announce a scaling back of its bond purchases.

Mortgage rates remain low by historical standards. But the recent rate increases could slow the housing recovery. The increases spurred some homebuyers to close deals quickly.

U.S. sales of newly built homes dropped 13.4 percent in July to a seasonally adjusted annual rate of 394,000, the lowest level in nine months.

But spending on construction projects rose in July to its highest level since June 2009, the Commerce Department said Tuesday.

Mortgage rates have been rising because they tend to track the yield on the 10-year Treasury note. The yield has climbed 1.3 percentage points in the past four months as bond traders have anticipated that the Fed will slow its bond buying. The 10-year note’s rate rose to 2.89 percent Wednesday from 2.86 percent Tuesday. It jumped to 2.96 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan held at 0.7 point.

The average rate on a one-year adjustable-rate mortgage increased to 2.71 percent from 2.64 percent. The fee rose to 0.5 point from 0.4 point.

The average rate on a five-year adjustable mortgage rose to 3.28 percent from 3.24 percent. The fee was unchanged at 0.5 point.

source: http://www.buffalonews.com/business/average-30-year-mortgage-rate-nears-years-high-20130905

James Clooney WS

Mortgage rates continue to creep up as economy heals

9/9/2013

Jump in mortgage rates hurts US sales of new homes

8/27/2013

WASHINGTON — Americans cut back sharply in July on their purchases of new homes, a sign that higher mortgage rates may be slowing the housing recovery.

US sales of newly built homes dropped 13.4 percent to a seasonally adjusted annual rate of 394,000, the Commerce Department said Friday. That’s the lowest in nine months. And sales fell from a rate of 455,000 in June, which was revised down from a previously reported 497,000.

The housing rebound that began last year has helped drive economic growth and create more construction jobs. But mortgage rates have climbed a full percentage point since May. The increase has begun to steal some momentum from the market.

Sales of new homes are still up 7 percent in the 12 months ended in July. Yet the annual pace remains well below the 700,000 that is consistent with a healthy market. July’s drop ‘‘may mark an uh-oh kind of moment for the housing recovery,’’ said Mark Vitner, an economist at Wells Fargo Securities.

Stocks of home builders declined sharply Friday, even as overall market indexes rose. Shares of Toll Brothers Inc., D.R. Horton Inc., and Lennar Corp. — three of the nation’s largest builders — all fell in the neighborhood of 3 percent.

And major homebuilders’ shares have been dropping steadily since late May. The slide began after Federal Reserve chairman Ben Bernanke first signaled that the Fed might reduce its bond purchases later this year. The bond purchases have helped keep mortgage rates and other borrowing costs low.

The average rate on a 30-year mortgage reached 4.58 percent this week, according to Freddie Mac. That’s up from 3.35 percent in early May and the highest in two years.

The impact on would-be buyers’ finances is significant.

Take someone who locked in the early May rate on a $200,000 mortgage. They would have a monthly payment of around $875. But the same mortgage at last week’s average rate would cost $1,025 a month.

The difference adds up to $150 more each month — or $54,000 over the lifetime of a 30-year loan. The monthly figures don’t include taxes, insurance, or initial down payments.

Potential buyers appear to have noticed that financing a home purchase has become more expensive. The number of Americans applying for mortgages to buy homes has plummeted 16 percent since the end of April. And builders began work on the fewest single-family homes in eight months in July. Still, mortgage rates remain low by historical standards. The same $200,000 loan would cost a buyer $1,330 a month at a 7 percent rate, the average since 1985.

Most economists expect the housing recovery will continue, albeit at a slower pace.

The impact of higher mortgage rates has surfaced in the new-home market faster than the resale market because the new-home sales are measured when contracts are signed.

Higher rates may have also caused potential buyers to cancel some purchases of new homes. Vitner said that may explain why sales were revised down in May and June. Most of the revisions occurred in sales of homes not yet under construction. Buyers don’t need mortgages until construction begins.

Average rate on 30-year mortgages up to 4.58%

8/26/2013

Average U.S. rates for fixed mortgages rose this week to their highest levels in two years, driven by heightened speculation that the Federal Reserve will slow its bond purchases later this year.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan jumped to 4.58 percent, up from 4.40 percent last week. The average on the 15-year fixed loan rose to 3.60 percent from 3.44 percent. Both averages are the highest since July 2011.

Rates have risen more than a full percentage point since May. Last week’s spike comes after more Fed members signaled they could reduce the bond purchases as early as September. The purchases have helped keep long-term interest rates low, including mortgage rates.

Despite the hike, mortgage rates remain low by historical standards. Recent reports suggest the jump in rates has yet to sap the housing recovery’s momentum.

In July, previously occupied homes in the U.S. sold at the fastest pace since 2009. Sales jumped 6.5 percent last month to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors reported Wednesday. Over the past 12 months, sales have surged 17.2 percent.

The National Association of Home Builders said its measure of confidence among builders rose this month to its highest level in nearly eight years.

Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield has also surged on speculation that the Fed’s stimulus will slow. It rose to 2.90 percent Thursday morning, its highest level in two years.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point.

From The Detroit News: http://www.detroitnews.com/article/20130826/BIZ01/308260011#ixzz2d5CGZ0nE

Mortgage rates now a buyer stumbling block

7/22/2013

CHICAGO (MarketWatch)—Mortgage rates used to be the least of home buyers’ worries. But a recent interest-rate spike is turning the factor of rising home-loan rates into a widespread concern.

Rates on 30-year fixed-rate mortgages averaged 4.37% for the week ending July 18, according to Freddie Mac’s weekly survey of conforming mortgage rates. That’s down slightly from the average a week earlier, but up more than a percentage point from early May.

While it isn’t yet known how the rate increase may have affected overall housing sales, the volatility been a reality check, a reminder to would-be buyers that low rates won’t be around forever, said Jessica Edwards, Coldwell Banker Real Estate consumer specialist.

It’s causing others to back out of deals in progress.
For example, two of Ellie McIntire’s short-sale transactions have fallen through the past couple of weeks. The Baltimore-area real-estate agent, who specializes in short sales, said that rising rates are to blame.

In a short sale, the sellers owe more on the mortgage than the home is currently worth, and their lender agrees to accept less than the full mortgage payoff at closing. In McIntire’s cases, after waiting for at least 60 days for the banks to accept or reject their offers, the buyers decided they couldn’t afford to wait any longer and pulled out of the process, she said. Without an agreed upon contract price, they couldn’t secure financing.

“They had gotten to the 4% [30-year fixed-rate mortgage rate] mark and decided they wanted to find a home that was a standard transaction,” not a short sale, McIntire said. With a traditional sale, the home seller approves the offer, not the bank, so the process can move more quickly.

Forty-one percent of home buyers said rising mortgage rates were their No. 1 worry, according to a survey of more than 2,000 people conducted in late June by real-estate website Trulia.

Of the respondents who plan to buy a home someday, 13% said a mortgage rate of 4% would be too high and 20% said a mortgage rate of 5% was their limit. Another 22% said rates would have to reach 6% to discourage them from buying a home
What a higher rate means for your bottom line

The monthly payment on a $200,000, 30-year fixed-rate mortgage at 3.35% (what it averaged in early May) is $881. When the rate goes up to 4.46% (what it averaged in late June), the monthly payment is $1,009, according to calculations from Trulia’s chief economist, Jed Kolko.

Or consider this rule of thumb: For every $100,000 borrowed, a percentage point increase in rate means an additional $83 a month in your monthly mortgage payment, said David Zugheri, executive vice president at Envoy Mortgage in Houston.

Is that enough to stop someone from buying a home? Maybe not. But it will likely make someone stutter and reconsider the purchase, he said.

Even a smaller jump can be felt in a borrower’s monthly budget.

Kay Brungs closed on a one-bedroom condo unit in Chicago’s Streeterville neighborhood on July 3. When she started the process of financing her purchase, she qualified for a 30-year fixed-rate mortgage rate below 4%. She wanted to lock then, but her loan officer at the time told her to hold off, that lower rates could be coming. In the meantime, rates jumped, and she ended up with a 4.23% rate at closing.

Now she’s paying for it.

“It’s not monumental or game changing, but it’s $45 month that I’m not going to have,” Brungs said.

That’s also $540 a year, or $2,700 over the course of five years.
Rates could start to move more gradually

Of course, no one knows exactly what rates will do in the weeks and months ahead. That’s the scary part.

The comforting part is that while rates will most certainly trend upward in the long term, they might not reach 5% with great speed, said Erin Lantz, director of Zillow Mortgage Marketplace, a mortgage shopping website.

“What we expect is for rates to move up to around 4.5% to 5% in the next 12 to 18 months,” she said. “What the federal government is aiming to get to is a stable, less volatile interest rate level.”

What’s more, many in the mortgage industry think the Federal Reserve may still be buying bonds, helping mortgage rates to stay low, for the next three years or so, Zugheri said. So while rates may be higher than earlier this year, there’s a good chance they’ll stay low for a while, relative to their historic averages. (It’s worth noting that from 2003 through 2006, generally strong years for the housing market, the average rate for 30-year fixed mortgages generally hovered between 5.5% and 6%.)

It’s also worth noting that while fixed-rate loans have experienced large swings, adjustable-rate mortgages haven’t been quite as volatile, said T.J. Freeborn, mortgage professional at Discover Home Loans. People planning to live in a home for no more than five to seven years might view an ARM as a good choice, since they will likely move before the rate resets, she said.
If you’re in the market

Don’t panic if you’re home shopping right now. Rates might not be at the bottom, but they’re still very low.

Just make sure you budget for interest-rate fluctuations, Zugheri said.

“The best advice I could give to a would-be home purchaser is, when factoring your monthly payment, throw on an extra $100 per $100,000 borrowed…and mentally be prepared for that,” he said. “What it might do is drive you to buy a less expensive home, it might drive you to put more money down, it may change your behavior and you may start looking at different neighborhoods.”

And make sure you trust the loan officer you’re working with.

In retrospect, Brungs thinks if she switched sooner she would have locked a lower mortgage rate. Don’t be afraid to move on if you’re not satisfied with the person you’ve picked to originate your loan.

Better yet, by getting preapproved before you’ve even started home shopping, you can get a sense for how the lender treats you and decide whether you want to stick with them until closing, Lantz said. Pay attention to how responsive they are to your calls and how reliable they are, and make sure you like their style of explaining the mortgage process, she said.

Source: MarketWatch

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Will Mortgage Rates Go Down?

7/16/2013

San Diego, CA (PRWEB) July 15, 2013

Blue Loan Services is a full service mortgage company that has been providing California home loan borrowers with the best wholesale home purchase and refinance rates, as well as access to the most trusted California mortgage lenders and specialized loan products for many years. The company’s website offers a number of tools that homeowners and home buyers can use to find the best mortgage scenarios for their unique financial situations and lifestyles, as well as news on the latest mortgage trends and other stories that affect mortgage rates and home prices. With the surprising sudden increase in mortgage rates last month, many borrowers are asking the question “Will mortgage rates go down again?” The answer to this, according to Blue Loan Services is: not any time soon. Mortgage interest rates are expected to rise rather than fall; however Blue Loan Services can help borrowers to benefit from the best available interest rates regardless of how mortgage rates move.

The company explains that the recent mortgage interest rate increase that happened so fast was the result of investors panicking when Federal Reserve chairman, Ben Bernanke, made statements that seemed to imply that the Fed would be starting to wrap up some parts of their stimulus program. This turned out not to be the case, and later the Federal Reserve clarified that the statements were meant to be taken as good news about the improvements in the economy. However, as an article from the New York Times published last June 20th reports: “…the investors whose decisions spread Fed policy through the economy, responded as if the news had been grim. The Standard & Poor’s 500-stock index took its worst two-day dive since November 2011 and has lost 5 percent of its value in the last month. Wells Fargo, the nation’s largest mortgage lender, raised its advertised rate on 30-year loans to [4.5 percent from 3.9 percent in the same period.”

Since then home mortgage interest rates have stabilized, but they are not expected to go back down to their former low levels. Those who have been planning to purchase a home or refinance before the increase, however, should not put off their plans just yet. The experts at Blue Loan Services point out that rates are still quite low, just a few points above the record lows seen last year and the beginning of this year, so those who wish to take advantage of these rates should do so as soon as possible. The company’s reputation for fast loan closing times, coupled with their online application and documentation system which allows Blue Loan Services clients to quickly find and apply for the best loan products, can help homeowners and buyers in California to quickly lock in these still low rates before they get any higher. A review of this online system from a client living in Pleasanton says:

“I've been through the loan process at least 8 times, combined of both loans for home purchases and refinances. This is by far the smoothest and most easy-to-use electronic-approach I've ever had, mainly due to Brandon Blue's expertise and knowledge of the loan process, the quick response times via emails, as well as use of electronic copies of documents. I love how they set up the system, by using an online portal to upload all required documents and update the loan status throughout the loan process, and also the convenience of communicating through emails. Lastly, Brandon Blue was easy to work with.”

Mortgage Rates Hit Two-Year High: Time to Buy or Duck and Run?

7/15/2013

According to a recent survey from Fannie Mae, the number of people who believe mortgage rates will increase over the next year jumped 11 percentage points from May to hit 57 percent in June, the highest level in the survey’s three-year history. The news, released Monday, came just three days before Freddie Mac reported that the average rate on a 30-year fixed mortgage hit a two-year high of 4.51 percent with a 0.8 point fee.

The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. Supplementary data from the survey confirm his belief.

While the share declined 4 percentage points between May and June, a full 72 percent of people still think it is a good time to buy a house. People expecting home prices to increase over the next year hit a survey high of 57 percent. Only 7 percent believe prices will decline. A majority of people also expect renting prices to increase over the next year. All told, the data suggest that those who want to get into the market should so do sooner rather than later.

“Consumers may recognize that today’s still favorable mortgage rates and homeownership affordability levels will recede over time,” Duncan said. “Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”

But with this in mind, the number of mortgage applications has actually been on the decline recently. According to the Mortgage Bankers Association’s latest report, for the week ended July 5, loan application volume dropped 4 percent on a seasonally adjusted basis from one week earlier. That’s the eighth weekly decline in nine weeks and comes after an 11.7 percent plunge in the previous week. The figures include both refinancing and home purchase demand, and cover more than 75 percent of all domestic retail residential mortgage applications.

Source: Wall Street Cheat Sheet

U.S. Mortgage Rates At 2-Year High

7/12/2013

The average 30-year fixed mortgage rate rose to 4.51 percent, a two-year high, on the possibility that the Federal Reserve would reduce future bond purchases, according to Freddie Mac.

The 30-year fixed-rate mortgage averaged 4.51 percent for the week ending July 11, up from last week when it averaged 4.29 percent. Last year at this time, it averaged 3.56 percent.

The 15-year fixed rate mortgage averaged 3.53 percent, up from 3.39 percent last week and 2.86 percent from a year ago.

On Thursday morning, stocks opened at record-high levels after comments Wednesday night from Federal Reserve chairman Ben Bernanke that the Fed intends to keep its $85 billion a month bond purchasing stimulus program in place for the near future. The Dow closed at an all-time high on Thursday.
Before Bernanke spoke at a conference at the National Bureau of Economic Research, the Federal Reserve released minutes from its policy committee meetings from June 18 and 19. Those meeting notes indicated many members were waiting for further improvement in the labor market before bond purchases could be slowed.

Last month, Bernanke hinted that the Federal Reserve could begin tapering bond purchases as early as this fall if, among other factors, the country's unemployment situation improved.

Frank Nothaft, vice president and chief economist with Freddie Mac, said households were moving into the mortgage-lending market out of fear that interest rates might rise.

Nothaft said June's employment numbers, which indicated a higher than expected 195,000 jobs added last month plus higher revisions for the previous two months, led to more market speculation that the Federal Reserve would reduce future bond purchases. That caused bond yields and mortgage rates to rise, he said.

"Moreover, hourly wages rose by 2.2 percent over the last 12 months and represented the largest annual increase in nearly two years," he said. "However, the minutes of the June 18th and 19th Federal Reserve's monetary policy committee meeting, released July 10th, stated that many members indicated further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of bond purchases."

The jobs report indicated part-time jobs increased to more than 350,000, an indication that the quality of jobs did not keep pace with the quantity of jobs added.

When asked if some people are just getting into the market on the fear that mortgage rates will rise further, Zillow senior economist Svenja Gudell said that may be only one part of the story.

"Some of the demand may be pulled forward for those that are already in the process of buying and they might try to speed up closing so they are able to lock-in the lowest rate possible, but it's unlikely that a flood of brand new buyers will enter the market just because mortgage rates are rising," she said.

It's important to remember that mortgage rates are still incredibly low, she said.

"Per Freddie Mac, the average 30-year fixed rate over the past 42 years was roughly 8.5 percent, so anything below 6 percent is a bargain. Also, rates of 6 or even 7 percent won't happen overnight. While it's expected that mortgage rates, in general, will continue to rise, it will take a few years for them to reach that level," she said.

Gudell said some investors are beginning to exit markets due to rising mortgage rates and home values, especially in areas like Phoenix and Las Vegas that have seen above average investor activity. With that view in mind, homebuyers could benefit.

"First-time homebuyers will no longer be pushed out of these markets and have more of a chance to be competitive, avoiding stressful and frustrating bidding wars," she said.

Source: ABC News