Friday, July 16, 2010
Weekly Information 7/16
Mortgage interest rates improved this past week as economic data was mostly weaker than expected. June Retail Sales fell 0.5% on expectations that sales would fall by 0.2%. Excluding automobiles, sales fell by 0.1% on expectations that they would be unchanged. The July New York Fed Empire State Manufacturing Index along with the July Philadelphia Fed Business Index were much weaker than expected. Today’s University of Michigan Consumer Sentiment Index fell to 66.5, an 11 month low. Also of note, inflation continues to be low. The June Consumer Price Index (CPI) fell 0.1% on expectations that it would be unchanged. Year over year CPI is up 1.1%. June Core CPI, excluding the food and energy components, increased 0.2% on expectations that it would increase 0.1%. Year over year, though, core CPI increased just 0.9%, the smallest increase since 1966.
Wednesday, July 14, 2010
Monday, July 12, 2010
10 Ways to Prepare for Homeownership
1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving.Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order.Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications.How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving.Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order.Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications.How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.
Friday, July 9, 2010
Weekly Information 7/9
Mortgage interest rates were mostly flat on the week with little economic data for the markets to digest. Of note, the June ISM Services Sector Index came in at 53.8, weaker than the 55 expected. Weekly jobless claims fell be 21k on expectations that they would fall by 12k. May Consumer Credit fell by $9.1 billion on expectations that it would fall by $3.1 billion. April Consumer Credit was revised lower. April Consumer Credit fell by $14.9 billion from the originally reported increase of $1 billion. Both numbers indicate that consumer spending is soft. May Wholesale inventories increased 0.5%, in line with expectations. Also, the Treasury announced that it will auction $69 billion in debt next week.
Thursday, July 8, 2010
Friday, July 2, 2010
Weekly Information 7/2
Mortgage interest rates improved slightly on the week on generally weaker than expected economic data. Today’s employment report for June showed Non-Farm Payroll losses of 125k on expectations that payrolls would fall by 100k. Most of the job losses were driven by the cut of 225k temporary census workers. The private sector added 83k jobs, lower than the 112k expected. June average hourly earnings fell by 0.1%, its first decline in several months. Other economic data weaker than expected included June Consumer Confidence, the ADP Private Job Estimate for June, the Chicago Purchasing Managers Index, weekly jobless claims, the June ISM Manufacturing Index, and May Pending Home Sales. May Pending Home Sales fell by 30% on expectations that sales would be down 12.5%. Year over year sales are down 16%. May Personal Income and Spending were in line with expectations.
Thursday, July 1, 2010
Pending home sales 'fell off a cliff'
NEW YORK (CNNMoney.com) -- The experts expected home sales to drop once the homebuyer tax credit lapsed at the end of April, but the depth of the decrease was shocking.
According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It's even off 15.9% from a year ago when the nation was barely emerging from the recession.
"The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."
Lawrence Yun, NAR's chief economist downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up.
"If jobs come back as expected, the pace of home sales should pick up later this year," said Yun, "and reach a sustainable level of activity given very favorable affordability conditions."
Those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when -- or if -- the job market will ever bounce back.
"We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems."
According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It's even off 15.9% from a year ago when the nation was barely emerging from the recession.
"The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."
Lawrence Yun, NAR's chief economist downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up.
"If jobs come back as expected, the pace of home sales should pick up later this year," said Yun, "and reach a sustainable level of activity given very favorable affordability conditions."
Those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when -- or if -- the job market will ever bounce back.
"We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems."
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