Austin Mortgage Update – Week Ending 3/27/09

March 30, 2009 by Kevin Wilhelm · Leave a Comment

What Did Interest Rates Do This Week?
** based on week’s average with 1pt **

30-yr Fixed – Slightly Lower
This Week: 4.76%
Last Week: 4.77%
1yr Ago: 5.85%

15-yr Fixed – Slightly Lower
This Week: 4.53%
Last Week: 4.57%
1yr Ago: 5.34%

Highlight of This Week’s Major Economic Reports

Surprising news popped up in the housing market as existing home sales jumped an astounding 5.1% in February, while new home sales also beat market expectations with a 4.7% increase. This is the first big jump in home sales in a few months, and it’s another encouraging sign that we may be nearing the bottom.

However, the bigger headline-nabber for the week came out of the Treasury Department with the announcement of the highly anticipated “toxic asset” plan, which is aimed at alleviating banks’ balance sheets by using up to $1 trillion in taxpayer and private investor funds to buy up such assets as subprime mortgages. Whether the plan will work to increase the flow of lending again still remains in question, but this at least gives the government a strong weapon in tackling the ongoing financial crisis.

What to Look for Next Week

Very closely watched will be Friday’s employment report, which is expected to create another uptick in the nation’s unemployment rate.

Short-Term Rate Outlook

Stable

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Austin Mortgage Update – Week Ending 3/20/09

March 23, 2009 by Kevin Wilhelm · Leave a Comment

What Did Interest Rates Do This Week?
** based on week’s average with 1pt **

30-yr Fixed – Lower
This Week: 4.77%
Last Week: 5.03%
1yr Ago: 5.87%

15-yr Fixed – Lower
This Week: 4.47%
Last Week: 4.64%
1yr Ago: 5.27%

Highlight of This Week’s Major Economic Reports

My mortgage lenders have been proclaiming that the only thing that would cause rates to come down drastically again is if the Fed announced that it would buy up even more mortgage-backed securities; and, sure enough, that’s exactly what they did. With a renewed commitment of $750 billion to buy up Fannie Mae and Freddie Mac – and even FHA-originated – loans, mortgage rates tumbled this week, as the Fed all but guaranteed to buy these debts (regardless of market conditions). Mortgage rates fell to an average of 4.5% on Thursday, but it’s expected they’ll settle into 4.75-5.25% territory for the foreseeable future.

The Fed is willing (and able) to keep dishing out billions of dollars into the financial markets, since inflationary concerns remain relatively tamed. The Producer Price Index posted only a modest gain of 0.1% in February, while the Consumer Price Index nudged higher by 0.4%.

From an economic standpoint, despite a lack of “warm and fuzzy” news to help us feel more confident about an economic recovery later this year, we do continue to see signs of stability across the spectrum. Housing Starts, for example, was up 22% over last month, which was the first noticeable increase in recent history. Manufacturing, consumer confidence, and weekly unemployment claims are all still in negative territory, but at least the numbers have curtailed somewhat recently, which at least gives us hope for a bottoming out.

What to Look for Next Week

February’s home sales data will be the main headliners for the week but will likely have little influence on the direction of mortgage rates.

Short-Term Rate Outlook

Stable

Stay Informed: What’s in the News

“Under 5%, Mortgages May Be Near the Bottom” from The Wall Street Journal

The Federal Reserve is going to extraordinary lengths to push down long-term interest rates, including home-mortgage rates. But those hoping mortgage rates will fall sharply from current levels, already historically low, may be disappointed.

Mortgage firms Thursday were quoting rates averaging 4.75% on 30-year fixed-rate mortgages, according to Zillow.com, a real-estate information service. That is down from more than 5% two days ago and about 6% in mid-November. But further big declines will be hard to achieve, partly because the mortgage-lending market has grown less competitive in the past year as hundreds of small banks and independent mortgage lenders have collapsed. The big banks that dominate the market are eager to boost their profits margins, not give deeper bargains to consumers.

“Austin #2 Healthiest Housing Market for 2009” from BuilderOnline.com

Click Here For The Full Story

Nine years ago, during the tech bust, some builders felt that Austin was too crowded and left. The bloom is back on Austin’s yellow rose now; it moved up the leader board to become the sixth largest home building market last year. Job creation explains the move. While other markets lost employment, Austin added 17,400 jobs last year, 2.3 percent growth rate. It helps that Austin is home to both a major university, The University of Texas, and the state capital. Existing homes cost a little bit more in Austin than other Texas markets, roughly $188,600, but that’s still below the national average. Also, Austin is one of the few metro areas in the country where median prices actually rose in 2008–2.7 percent. Amazingly, Austin now generates more home building activity than Chicago, which has six times more people.

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Austin Mortgage Update – Week Ending 3/13/09

March 15, 2009 by Kevin Wilhelm · Leave a Comment

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

30-yr Fixed – Lower
This Week: 5.03%
Last Week: 5.15%
1yr Ago: 6.13%

15-yr Fixed – Lower
This Week: 4.64%
Last Week: 4.72%
1yr Ago: 5.60%

5/1 ARM – Lower
This Week: 4.99%
Last Week: 5.08%
1yr Ago: 5.58%

Highlight of This Week’s Major Economic Reports

The stock market actually managed to pull off a rally this week, thanks in large part to surprising news of profitability from the country’s largest banks. We are hopeful the Fed’s efforts for making money cheaply available to banks is finally making a positive impact on banks’ balance sheets, which in turn is helping to stimulate lending.

Moreover, despite the continued barrage of weak economic data, there is a lot of comfort we can take in that the numbers seem to be less severe of late. Retail Sales, for instance, fell only 0.1% in February. Not bad given the dire state of the automotive industry. Also, weekly unemployment claims – despite remaining at high levels – are at least starting to show some signs of leveling off, since the numbers haven’t worsened in recent weeks.

What to Look for Next Week

It’s time for the Fed’s monthly meeting to discuss monetary policy, and it’s widely expected that there will be no change in short-term rates. We’ll also get another peak at the latest inflation gauges via the Consumer and Producer Price Indexes.

Short-Term Rate Outlook

Stable

Stay Informed: What’s in the News

“Texas Foreclosures Down” from the Associated Press

Texas’ foreclosure filings last month dropped 14.1 percent from a year earlier but increased 7.9 percent from January, according to the latest report from RealtyTrac, a foreclosure-listing firm.

Those numbers compared favorably to the nation’s. RealtyTrack reported that, nationally, nearly 291,000 homes received at least one foreclosure-related notice last month. That is up 30 percent from February 2008 and 6 percent from January.

The news varied throughout the state. For example, Brazos County experienced a slight uptick in foreclosures.
RealtyTrac listed a total of 58 bank-owned properties in the county since late 2006. Of those, 17 were entered over the months of January and February, compared with two properties entered from the same period of 2008.

Meanwhile, farther east, the Jefferson County clerk’s office records show that banks filed 67 notices in January, 97 notices in February and 28 so far in March. That compares with 141, 91 and 66 notices in those respective months last year.

Dr. Jim Gaines, research economist at the Real Estate Center at Texas A&M University, said he believes more people in the area will face foreclosure in the coming months. In Beaumont, some areas may see higher rates than others, and those areas may be subdivisions where creative financing was used to get people into homes that they maybe could not afford.

“HUD May Pull Restrictions on Builders’ Incentives” from Inman News

Federal regulators propose to withdraw a RESPA rule change that would bar homebuilders from offering consumers incentives that require them to use the builders’ affiliated mortgage and title insurance companies. It’s unclear whether the change — which the National Association of Home Builders has gone to court to block — will actually be scrapped, and if so, whether regulators will go back to the drawing board and launch a public process to rewrite it. About all that’s certain is that the Department of Housing and Urban Development is now promising that restrictions on homebuilder incentives originally slated to take effect in January won’t be implemented until mid-summer — if ever.

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Austin Mortgage Update – Week Ending 3/9/09

March 9, 2009 by Kevin Wilhelm · Leave a Comment

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

30-yr Fixed – Slightly Higher
This Week: 5.15%
Last Week: 5.07%
1yr Ago: 6.03%

15-yr Fixed – Slightly Higher
This Week: 4.72%
Last Week: 4.68%
1yr Ago: 5.47%

5/1 ARM – Slightly Higher
This Week: 5.08%
Last Week: 5.06%
1yr Ago: 5.34%

Highlight of This Week’s Major Economic Reports

Amidst the barrage of negative economic reports, the DOW tumbled below 7000 for the first time in almost 12 years. The beating was further exacerbated with news that the labor market lost another 651,000 jobs last month, putting the unemployment rate at a whopping 8.1% — the highest we’ve seen in over two decades.

Somewhere behind these headlines, there can be optimism, however, as there are signs of economic stabilization that continue to surface. Consumer borrowing, for instance, was up for the first time since September. Announced layoffs – while still elevated – were less than expected. Construction spending and auto sales remain on the decline, but at the least the drops have been less severe in recent months.

The Obama Administration also announced its much anticipated “Making Home Affordable” program, which we hope will create a firmer ground to help our economic recovery, as more and more homeowners struggle to keep up with their mortgage payments. The program is aimed at helping as many as nine million homeowners who either cannot refinance because their homes have lost value or who are at risk of foreclosure because their monthly payments have become unaffordable. While controversial, this program is intended to help stave off the fast-rising foreclosure rates affecting many parts of the country.

What to Look for This Week

The economic calendar will be relatively void of any major headliners, so expect for rates to be directed by the goings on in the stock market.

Short-Term Rate Outlook

Possibly Lower

Stay Informed: What’s in the News

Housing Rescue Program Details from RISMedia

President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

“Freddie Unveils REO Rental Initiative” from American Banker

Freddie Mac said Thursday that it has launched a program called REO Rental Initiative that gives qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. Fannie Mae had announced a similar program in December. Freddie’s program will be managed by HomeSteps, its national real estate unit, and implemented through several national property management firms.

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Austin Mortgage Update – Week Ending 2/27/09

March 2, 2009 by Kevin Wilhelm · Leave a Comment

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

30-yr Fixed – Slightly Higher
This Week: 5.07%
Last Week: 5.04%
1yr Ago: 6.24%

15-yr Fixed – Unchanged
This Week: 4.68%
Last Week: 4.68%
1yr Ago: 5.72%

5/1 ARM – Slightly Higher
This Week: 5.06%
Last Week: 5.04%
1yr Ago: 5.43%

Highlight of This Week’s Major Economic Reports

With many of the able buyers still waiting in anticipation for the government to slash mortgage rates to 4.5% — or, gasp, maybe even to 4% — it’s not much of a surprise that sales of new and existing homes continue to tumble. January saw Existing Home Sales fall 5.3%, while New Home Sales dropped 10%. The good news, however, is that inventory levels are continuing to drop; and prices, while still declining, are overall holding firm as the market tries to find a balance between supply and demand.

What to Look for Next Week

February’s employment report will be the headliner for the week, and the numbers aren’t expected to be pretty. Weekly unemployment claims have averaged 600K over the past few weeks, so it’s anticipated that the nation’s unemployment rate will rise again. The silver lining to this dreary projection is that it may help mortgage rates improve or at least hold steady.

Short-Term Rate Outlook

Stable

Stay Informed: What’s in the News

“Texas Home Prices Up” from the Texas A&M Real Estate Center

Latest home appreciation rates released this week by the Federal Housing Finance Agency (FHFA) indicate Texas home prices increased 2.1 percent last year.

Midland led the way with a 10.4 percent increase between fourth quarter 2007 and fourth quarter 2008. At the other end of the spectrum were Odessa and Brownsville, where prices fell 2.7 percent and 2.6 percent, respectively.

In the final quarter of 2008, Texas home prices increased 0.2 percent.

“The data indicate what we have believed all along,” said Real Estate Center Research Economist Dr. Jim Gaines. “Texas fared well in 2008, especially compared with the rest of the country.”

According to FHFA, here’s how home prices in select Texas cities did last year:

Austin–Round Rock – up 4.4%
College Station–Bryan – up 5.5%
Dallas-Plano-Irving – up 1.9%
Houston–Sugar Land–Baytown – up 3.7%
Killeen–Temple–Fort Hood – up 2.5%
San Antonio – down 1.6%
Waco – down 1.7%

Nationally, prices dropped 4.5 percent last year for the overall index (which includes financings and refinancing) and 8.2 percent based on purchases-only data.