homesmillbrae.com » Uncertainty http://homesmillbrae.com Thu, 20 Oct 2022 03:48:43 +0000 en hourly 1 http://wordpress.org/?v=3.1 Home Builders Need Mortgage Bankers to Keep Recovery Alive http://homesmillbrae.com/1781/home-builders-need-mortgage-bankers-to-keep-recovery-alive/ http://homesmillbrae.com/1781/home-builders-need-mortgage-bankers-to-keep-recovery-alive/#comments Thu, 25 Oct 2012 07:32:05 +0000 http://homesmillbrae.com/1781/home-builders-need-mortgage-bankers-to-keep-recovery-alive/ Continue reading →]]>

6fffd home sales13 Home Builders Need Mortgage Bankers to Keep Recovery Alive

A jump in signed contracts to buy newly built homes in September brought volumes to the highest level since April of 2010, when the home buyer tax credit temporarily infused the housing market.

The median price of a newly built home also rose nearly 12 percent from a year ago, as builders gained pricing power thanks to lessening competition from distressed properties.

Is it enough to put a period on the statement that housing is in full recovery? Perhaps, but not an exclamation point.

There is still too much uncertainty in the mortgage market to proclaim that housing is on its way back to its “frothy” days. That was abundantly clear at the Mortgage Bankers Association’s annual convention in Chicago this week, where the murmurs among the masses were all about regulation in the industry.

“I think that there is a concern that we may get tighter before we realize the balance,” said Debra Still, chairman of the MBA and CEO of Pulte Mortgage. “We certainly have to balance consumer protection with access to credit and there’s a fine balance that we have to figure out. Lenders will probably err on the side of being conservative before they will find that balance and lend to the fullest.”

(Read More: How to Play the Housing ‘Boom’)

Uncertainty over impending new regulations in the mortgage market has mortgage bankers understandably nervous. These new rules will determine risk held by lenders as well as down payments required for borrower, among other things. That uncertainty is having a direct effect on mortgage rates.

Despite the Federal Reserve’s $40 billion weekly infusion into agency mortgage backed securities, mortgage rates are just barely below where they were before the announcement of so-called QE3. Rates did fall immediately after the announcement, but with the 30-year fixed bouncing back up to 3.63 percent from mortgage applications fell dramatically, down 12 percent overall. Refinances fell the hardest last week, down 13 percent, but applications to purchase a home weren’t far behind, down just over 8 percent week-to-week.

“Wow, that was quick. Ahead of today’s 2nd day of the FOMC meeting, the MBA said both applications for refi’s and purchases are now below the levels of mid Sept when the Fed decided to further help the housing market with more QE,” writes analyst Peter Boockvar of Miller Tabak. “The costs of an eventual Fed exit will far outweigh any benefits.”

Why are mortgage rates rising again? Because even though the ten-year Treasury yield, which mortgage rates generally track, is above where it was before the Fed’s announcement of QE2, the greater demand by the Fed for MBS is being met by plenty of supply in the form of big refinance volume. The banks are not passing through the discounts they are getting to consumers due to tighter lending standards and rising fees.

(Read More: Is There a Housing Shortage?)

Tighter credit is particularly hard on first-time home buyers, who might not have strong credit scores or large down payments; this cohort usually makes up 45 percent of the overall home buying market but today are down at just 32 percent according to the National Association of Realtors.

“It’s that first time home buyer we have to be mindful of and make sure that the rules and the credit parameters don’t restrict the buyer that doesn’t have equity available in a prior home to move up or the assets in the bank yet,” adds Still.

(Read More: Property Flippers Are Back as Housing’s New Middle Men)

As we head into the historically slower months for the housing market, mortgage rates will likely play an outsized role, as today’s buyers are far more sensitive to the slightest rate moves. True, sales for the builders are up 42 percent from the trough at the beginning of 2011, but 72 percent below the latest peak, according to Boockvar. The door is open for the builders, as long as the bankers don’t slam it shut.

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Home Builders Need Mortgage Bankers to Keep Recovery Alive

Article source: http://www.cnbc.com/id/49533856?__source=RSS*blog*&par=RSS

]]> http://homesmillbrae.com/1781/home-builders-need-mortgage-bankers-to-keep-recovery-alive/feed/ 0 In a Twist, Both Home Prices and Rents Rise http://homesmillbrae.com/1642/in-a-twist-both-home-prices-and-rents-rise/ http://homesmillbrae.com/1642/in-a-twist-both-home-prices-and-rents-rise/#comments Wed, 08 Aug 2012 00:32:55 +0000 http://homesmillbrae.com/1642/in-a-twist-both-home-prices-and-rents-rise/ Continue reading →]]>

4c59c couple looking at house 200 In a Twist, Both Home Prices and Rents Rise

Home prices across the nation continued their upswing in June, according to a new report from CoreLogic. Including sales of foreclosures and short sales (selling for less than the value of the mortgage), prices rose 2.5 percent from a year ago. That is not quite as high as the annual increases seen in April and May. With the first half of the year now on the books, analysts are asking if prices can sustain.

“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” said Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

Home price gains will continue to be as much a factor of supply as they are of overall consumer confidence. While confidence in the overall economy has slipped slightly, optimism in the housing market remained strong in July, according to a just-released Fannie Mae survey:

“Survey respondents expect home prices to increase 1.7 percent in the next 12 months, down slightly from the survey high of 2.0 percent recorded in June. Eleven percent of respondents – the lowest level recorded since the survey began in June 2010 – believe home prices will drop in the next year. Also, in the highest level seen since the survey’s inception, 16 percent of consumers say it is a good time to sell.”

Still one quarter of respondents, an increase from June, are concerned about losing their jobs, and jobs have been the leading factor in the housing recovery. It is that unemployment uncertainty that has led so many younger Americans in the past few years to rent. That continued demand is pushing rents ever higher.

Asking rents rose in 24 of the 25 largest rental markets from a year ago, according to a new report from online real estate company Trulia. Rents are pushing double digit gains in San Francisco, Miami, Oakland, Denver, Seattle and Boston, and rents are rising faster than asking prices in 21 of the 25 largest rental markets year-over-year.

“For the first time, [home] prices are up year over year in a majority of metros, and asking home prices have increased for six straight months,” writes Trulia’s chief economist Jed Kolko in a release. “Rents, however, are rising even faster than prices in most markets. These price and rent increases, along with declining vacancies, should encourage new construction, which means housing will finally start contributing to the economic recovery.”

The question remains, where is the tipping point? As it becomes more expensive to rent than buy in more markets, more Americans should turn to buying, but so far they are not. Issues with negative equity, credit and confidence continue to plague home buying.

And are rents approaching bubble status? Investors continue to flock to the distressed housing market, trying to take advantage of rising rents, specifically in single family. Many of those investors say they are not concerned about a bubble, believing there has been a sea change in attitudes toward home ownership that could last through the decade. Whether it is attitudes or lack of available credit keeping the rental market on a tear, at some point, as happened during the housing bubble, prices will prevail.

Questions?  Comments?  And follow me on Twitter @Diana_Olick

In a Twist, Both Home Prices and Rents Rise

Article source: http://www.cnbc.com/id/48547923?__source=RSS*blog*&par=RSS

]]> http://homesmillbrae.com/1642/in-a-twist-both-home-prices-and-rents-rise/feed/ 0 How Catastrophe in Japan Could Affect US Mortgage Rates http://homesmillbrae.com/485/how-catastrophe-in-japan-could-affect-us-mortgage-rates/ http://homesmillbrae.com/485/how-catastrophe-in-japan-could-affect-us-mortgage-rates/#comments Tue, 15 Mar 2011 10:12:05 +0000 http://homesmillbrae.com/485/how-catastrophe-in-japan-could-affect-us-mortgage-rates/ Continue reading →]]>

According to the Fannie Mae 30-Yr MBS, mortgage rates are lower by about 5 basis points, thanks to the rally in US Treasurys, which produced a drop in yields.

Bankrate.com’s overnight on the 30-Yr fell to 4.81 percent from 4.87 percent last week.

Given the uncertainty in Japan, rates now get tricky:

This from Peter Boockvar at Miller Tabak:

“On one hand the news in Japan may lead to slower global growth and therefore a bid to US Treasurys/drop in yields, but on the other hand, Japan is the 2nd biggest foreign holder of US Treasurys and may elect to sell in order to repatriate funds back home. That may lead to upward pressure on US yields.”

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