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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. Phone #:(required)
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. Phone #:(required)
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. Phone #:(required)
4. Message

 

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Austin Mortgage Update – Week Ending 12/26/08

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

30-yr Fixed – Lower
This Week: 5.14% — lowest since 1971
Last Week: 5.19%
1yr Ago: 6.17%

15-yr Fixed – Lower
This Week: 4.91%
Last Week: 4.92%
1yr Ago: 5.79%

5/1 ARM – Lower
This Week: 5.49%
Last Week: 5.60%
1yr Ago: 5.90%

Highlight of This Week’s Major Economic Reports

According to Freddie Mac, “Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac’s survey began in 1971. Real GDP growth fell 0.5% in the third quarter of the year, pulled down by the largest drop in consumer spending since the second quarter of 1980. The market consensus calls for an even larger decline in the last three months of the year.

The housing market, meanwhile, continues to contract nation-wide. Existing home sales in nation-wide (excluding condominiums and co-ops) fell 8.6% in November to 4.0 million houses (annualized) in November, representing the slowest pace since July 1997. Moreover, the median sales price fell 12.8% from November 2007, the largest 12-month decline since records began in January 1968, according to the National Association of Realtors®.”

What to Look for Next Week

Not much expected for the final week of 2008. Rates aren’t expected to sway much either way.

Short-Term Rate Outlook

Stable

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. Phone #:(required)
4. Message

 

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