January Home Sales Reach 16-year High!

Home Remodeling Pickup to Trigger Higher Sales Prices

After years of sluggish growth, home remodeling is rebounding and more home owners are tackling long-delayed house projects to spruce up their homes. The growth in remodeling is coming at a time when more home owners are once again seeing equity in their homes as the overall housing market picks up. “Home improvements can further boost home values and help sustain both the housing recovery and economic growth,” Realty Times reports. Spending on home improvement projects rose 9 percent in 2012 — the first increase since 2007, according to a study by the Joint Center for Housing Studies at Harvard University. "With the U.S. economy and housing market now recovering, investment in the nation's housing inventory is also picking up,” according to the JCH report. “Lenders and new owners are rehabilitating millions of foreclosed properties. Older home owners are retrofitting their homes to accommodate their future needs... And with the huge echo-boom population moving into the home buying market over the coming decade, the remodeling industry can look to an even more promising future.” The National Association of the Remodeling Industry expects growth to continue in home remodeling, particularly as more clients feel more stable in their finances and employment situations.

Today's Rates

February 1, 2013 PRODUCT 0 pts w/pts 30 Yr Fixed 3.625% 3.5% +.6pt FHA 30 Yr Fixed 3.25% n/a 5 Yr ARM 2.75% 2.5% +.7pt 7 Yr ARM 2.875% 2.625% +.9pt 5 Yr Jumbo ARM* (purchase loans) 2.75% 2.5% +1pt 7 Yr Jumbo ARM* 3.0% 2.75% +1.1pt * Up to $1.5 million - - - - - This information is for real estate professionals only and is not intended for distribution to consumers. - - - - - Rates fluctuate and are always subject to credit approval. These rates are based on FICO scores of 740 and greater and loan amounts of at least $200k. - - - - - Conforming ARM's assume 25% down payment. - - - - - All loans assume no origination fee.

Weekly Info 02/01/2013

The sustained rise in long-term rates in January has stabilized for the moment. Mortgages have risen from 3.50% or below in the prior five months to roughly 3.75%, and the almighty 10-year T-note from a centerline near1.75% to almost 2.00%. The rise has been puzzling. The Fed committed just last fall to buy $85 billion each month in MBS and long Treasurys, with the expressed purpose of holding rates down until our economy turns sharply better. Which it hasn't. So, why the rate rise, one nearly always reflecting an improving US economy? In a precursor of our long-term future, rates have risen because forces overseas are larger relative to the US economy than at any time in more than a century.

New-Home Prices Pick Up Strength

Sales of new single-family homes posted the first annual gain in seven years as median prices continued to rise, the Commerce Department reports. The median price of new homes increased to $248,900 last month, a 1.3 percent increase compared to November. The median price of new homes sold was up 9.6 percent in December compared to a year ago. Meanwhile, new home sales increased nearly 20 percent from 2011 to 2012, the Commerce Department reports. While the gains were large, sales last year were still the third worst on record (2010 and 2011 also marked record lows in sales). For all of 2012, 367,000 new homes were sold—about a third of the record number of sales reached in 2005. Just for December—the latest month available—new-home sales dropped 7.3 percent compared to the previous month to a 369,000-unit annual rate. But numbers are subject to substantial revisions, as in November where sales were revised much higher to a 398,000-unit rate—marking the highest pace in nearly three years.

Loan Demand Rises as Rates Inch Up

For the third consecutive week, mortgage applications rose, even as mortgage rates inched up slightly, the Mortgage Bankers Association reports. The bulk of the increase in applications this week came from a 7.7 percent rise in applications from refinancings. Applications for home purchases, viewed as a leading indicator for future home sales, rose 2.5 percent. Overall, the mortgage application index -- which includes both refinancings and loans for purchase -- increased 7 percent in the week ending Jan. 18, the MBA reports. Meanwhile, 30-year fixed-rate mortgages averaged 3.62 percent last week, an increase of 1 basis point over the prior week, the MBA reports. Source: “U.S. Mortgage Applications Up for Third Week Despite Rate Rise,” Reuters (Jan. 23, 2013)

4 Ways Buyers Can Mess Up a Loan Approval

Your home buyers have gotten approved for a mortgage and now they’re just waiting to make it to the closing table. Make sure they don’t throw their loan approval into jeopardy by making one of these common mistakes: Making a big purchase: Tell your buyers to avoid making major purchases, like buying a new car or furniture, until after they close on the home. Big purchases could change the buyer’s debt-to-income ratio that the lender used to approve the buyer’s home loan and could throw the approval into jeopardy. Opening new credit: Inform your buyers that now isn’t the time to open up any new credit cards. Missing any payments: Home buyers need to be extra vigilant about paying all their bills on time, even if they’re disputing one. Cashing out: Avoid any transfers of large sums of money between your bank accounts or making any undocumented deposits — both of which could send up “red flags” to your buyer's lender.