Mortgage Update – Week Ending 1/23/09

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Higher
This Week: 5.12%
Last Week: 4.96%
1yr Ago: 5.48%

15-yr Fixed – Higher
This Week: 4.80%
Last Week: 4.65%
1yr Ago: 4.95%

5/1 ARM – Slightly Lower
This Week: 5.24%
Last Week: 5.25%
1yr Ago: 5.13%

Highlight of This Week’s Major Economic Reports

It was a holiday-shortened week filled with enthusiasm for the inauguration of a new President and the beginning of a new era, but the celebration was overshadowed by ongoing concern for the health of already-government-supported banks, most of which posted billions of dollars in losses last quarter.

Consumer confidence remains weak – as does homebuilder confidence – but mortgage rates nonetheless posted an increase, as lenders struggled to keep up with the demand for refinance mortgage applications.

What to Look for This Next Week

We’ll see the latest round of Fed meetings, which is expected to result in no change to short-term rates. The latest home sales figures will also be released, as well as a first glimpse of how the economy fared in the 4th quarter of last year.

Short-Term Rate Outlook

Stable to Slightly Higher

Stay Informed: What’s in the News

“Texas Home Prices at Least Risk” - from the Texas A&M Real Estate Center

Amidst a nation of MSAs hosting tumbling home prices, the Lone Star State’s own metropolitan areas have held tight to their home values, with only five of 26 MSAs seeing price declines in a 12-month period ending in September.

According to PMI Group’s Winter 2009 Risk Index, Dallas, Houston and San Antonio were the least likely large MSAs in the country during third quarter 2008 to experience lower home prices in the next two years. Each had a risk index of less than one.

Austin ranked as the 12th least likely metropolitan area to experience home price depreciation, with a 3.1 risk index, up from 2.3 in second quarter 2008.

Overall, Texas MSAs averaged a 2.8 percent increase in home prices between September 2007 and the same month in 2008.

Four of Texas’ MSAs claimed spots in PMI Group’s list of top ten annual house price appreciation rates. Sherman-Denison had an appreciation rate of 8.56; Victoria, 8.34; Odessa, 7.98; and College Station–Bryan, 6.71.

PMI’s U.S. Market Risk Index uses economic, housing and mortgage market factors (including home price appreciation, employment, affordability, excess housing supply, interest rates and foreclosure activity) to determine the probability of lower home prices in the future.

This update brought to you by

Marie Funston
Senior Mortgage Advisor
Coldwell Banker Mortgage
Tel.: (512) 691-6757

and

Kevin Wilhelm, ABR, GRI, REALTOR®
Coldwell Banker United, Realtors
512-417-3915

Contact Form:

1. Your Name(required)
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3. Website
4. Message

 

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Austin Mortgage Update – Week Ending 1/16/09

What Did Interest Rates Do Last Week?
** according to Freddie Mac **

30-yr Fixed – Lower
Last Week: 4.96% — lowest since 1971
Previous Week: 5.01%
1yr Ago: 5.69%

15-yr Fixed – Slightly Higher
Last Week: 4.65%
Previous Week: 4.62%
1yr Ago: 5.21%

5/1 ARM – Lower
Last Week: 5.25%
Previous Week: 5.49%
1yr Ago: 5.40%

Highlight of Last Week’s Major Economic Reports

According to Freddie Mac, “Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions. So far, both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages. The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008, announcement, to further shore up mortgage lending and keep rates low.”

On the economic news front, Retail Sales ended up being much worse than the already ‘horrible’ expectations for December. Prices are falling all around, but fortunately we’re not in deflationary territory – at least not yet. In December, producer prices dropped 1.9%, while consumers’ costs eased by 0.7%.

What to Look for This Week

The economic calendar is very light this week, so expect the stock market to drive the direction of mortgage rates. We’ve got the inauguration on tap, and that should generate some buzz with investors.

Short-Term Rate Outlook

Stable

Stay Informed: What’s in the News

“Economist Predicts Strong Texas Housing Market in 2009” from Texas A&M Real Estate Center

Despite the negative news surrounding the real estate industry, now continues to be a great time to buy a home in Texas, said Dr. Mark Dotzour, speaking before the Beaumont Board of Realtors.

Dotzour, the chief economist for the Real Estate Center at Texas A&M University, said the state’s housing market should thrive in 2009 thanks to affordable housing and steady job growth.

However, he also told the group to expect a decline in new home construction this year, partly because more new homes could inflate the market, causing existing home values to decline.

Although the latest report from California-based foreclosure listing firm RealtyTrac showed an 81 percent increase in the number of homeowners facing foreclosure last year, Dotzour said he does not expect foreclosures to become an issue in Texas.
“Our home prices have been going up,” he said, “and when your house is going up, you’d rather sell it then give it back to the bank.”

“Economy Still Better in Texas” from Texas A&M Real Estate Center

More than two million U.S. jobs were lost from November 2007 to November 2008, representing 1.5 percent of its labor force. The Texas economy fared much better during the period, gaining 222,900 jobs and increasing its labor force by 2.1 percent.

The state’s seasonally adjusted unemployment rate rose from 4.2 percent in November 2007 to 5.7 percent in November 2008. The U.S. seasonally adjusted unemployment rate rose from 4.7 percent to 6.7 percent over the same period.

Despite recent oil price decreases, the state’s mining industry continues to gain jobs. It ranked first in job creation, followed by professional and business services, leisure and hospitality, education and health services, and construction.

All Texas metros experienced positive employment growth rates from November 2007 to November 2008. McAllen-Edinburg-Mission ranked first in job creation followed by Laredo, College Station–Bryan, Longview and El Paso.

The state’s actual unemployment rate in November 2008 was 5.6 percent. Petroplexes Midland and Odessa ranked first and second in lowest unemployment rate followed by Amarillo, Lubbock, Abilene and College Station–Bryan.

This update brought to you by

Marie Funston
Senior Mortgage Advisor
Coldwell Banker Mortgage
Tel.: (512) 691-6757

and

Kevin Wilhelm, ABR, GRI, REALTOR®
Coldwell Banker United, Realtors
512-417-3915

Contact Form:

1. Your Name(required)
2. Email(valid email required)
3. Website
4. Message

 

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Austin Mortgage Update – Week Ending 1/9/09

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Lower
This Week: 5.01% — lowest since 1971
Last Week: 5.10%
1yr Ago: 5.87%

15-yr Fixed – Lower
This Week: 4.62%
Last Week: 4.83%
1yr Ago: 5.43%

5/1 ARM – Lower
This Week: 5.49%
Last Week: 5.57%
1yr Ago: 5.63%

Highlight of This Week’s Major Economic Reports

Despite a recent uptick in Treasury yields, mortgage rates actually fell during the first full week of the New Year. One major catalyst driving this dip is the start of the Fed’s foray in purchasing mortgage-backed securities. The $500 billion budgeted for this shopping spree is helping to increase demand, which in turn has kept rates low.

Stocks also took a hit throughout the week as retailers and other corporations took turns issuing earnings warnings. This then led to a ‘flight to quality’ mad-rush over to the bonds markets, thereby further driving down rates.

And, lastly, there was the much-anticipated Employment Report. We knew it wasn’t going to be pretty. 524,000 jobs lost in December, which brought the final 2008 tally to 2.6 million. The unemployment rate now sits at a level we haven’t seen in 16 years – 7.2%. Despite the gloomy outlook for the job market, most economists do not anticipate the unemployment rate to hit double-digit levels, since the economy (i.e., GDP) is expected to make a comeback (albeit a modest one) in the second half of the year.

What to Look for Next Week

We’ll get to find out just how bad the worst holiday shopping season in years was when the latest Retail Sales figures come out on Wednesday. Then, of course, there are the all-important inflation gauges in the Consumer Price and Producer Price Indexes. Inflation is not expected to be an issue at all; it’s more so seeing if the numbers start to creep into deflationary territory, as many economists fear.

Short-Term Rate Outlook

Fractionally Lower

This update brought to you by

Marie Funston
Senior Mortgage Advisor
Coldwell Banker Mortgage
Tel.: (512) 691-6757

and

Kevin Wilhelm, ABR, GRI, REALTOR®
Coldwell Banker United, Realtors
512-417-3915

Contact Form:

1. Your Name(required)
2. Email(valid email required)
3. Website
4. Message

 

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Austin Mortgage Update – Week Ending 1/2/09

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Lower
This Week: 5.10% — lowest since 1971
Last Week: 5.14%
1yr Ago: 6.07%

15-yr Fixed – Lower
This Week: 4.83%
Last Week: 4.91%
1yr Ago: 5.68%

5/1 ARM – Lower
This Week: 5.57%
Last Week: 5.49%
1yr Ago: 5.78%

Highlight of This Week’s Major Economic Reports

Vacations and holidays led to minimal activity – and movement – in the mortgage markets this week. But, some “promising” news to wind down 2008: the drop in consumer confidence was less severe in December, and the final week of the month saw fewer unemployment filings.

What to Look for Next Week

The first full week of 2009 kicks off with a slew of economic data, but most eyes (and the direction of mortgage rates) will focus on December’s employment report. Results that convey continued weakness in the economy should help to keep mortgage rates near low levels.

This update brought to you by

Marie Funston
Senior Mortgage Advisor
Coldwell Banker Mortgage
Tel.: (512) 691-6757

and

Kevin Wilhelm, ABR, GRI, REALTOR®
Coldwell Banker United, Realtors
512-417-3915

Contact Form:

1. Your Name(required)
2. Email(valid email required)
3. Website
4. Message

 

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