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Archive for May, 2010
I Was Wrong…..No Way Rates Are Back to 4.50%…
Friday, May 14th, 201072% Of Americans Think Now Is A Good Time To Buy A Home!
Tuesday, May 11th, 2010
Gallup poll just did a survey of Americans and almost 3 out of 4 think now is a good time to get into real estate. And 17.2% of potential homebuyers plan to buy a home in the near future for investment purposes, as a comparison last 
year at this time the same survey showed 5% of those surveyed planned on buying an investment property. That means more than 3 times as many Americans believe now is the time to invest their family’s savings and future in real estate investments. When the investor returns to the market it’s a very strong indicator that the market may be near the bottom.
We’re about 5 weeks out from the end of the Fed’s Mortgage Purchase Program and as of today, we are actually lower than we were when the program ended. Now that does not mean rates will not climb, I believe as do many experts rates will inevitably climb, but we look to have a little more time.
Here’s what happened after the last 4 interest rate cycle bottoms. As you can see rates tend to JUMP by about 1% between 90 to 180 days after the bottom. We very well may be seeing that bottom now, which could indicate rates closer to 5.75 or 6.00% by year end. This is so hard to forecast and get right because of the numerous factors involved, but I strongly believe the chances of rates increasing is drastically stronger than decreasing from here forward.
HAVE A GREAT WEEK!
1 In 8 Banks Tightened Prime Mortgage Standards Last Quarter
Thursday, May 6th, 2010The Federal Reserve says that financial markets “remain supportive of economic growth“. Residential mortgage guidelines, however, continue to tighten. 
If you’ve applied for a home loan recently, you probably felt it; extra scrutiny on income, assets and credit scores, among other things. The hard proof of the changes, however, can be found in the Federal Reserve’s quarterly survey of its member banks.
Every 3 months, the Federal Reserve asks senior bank loan officers around the country whether their respective banks’ “prime” residential mortgage guidelines tightened since the last survey.
For the period January-March 2010, 1 in 8 banks surveyed toughened their qualification standards.
Only 4% loosened them.
When we account for the Fed’s survey in conjunction with new underwriting standards from Fannie Mae and FHA, it’s clear that getting approved for a mortgage in 2010 is more difficult than at any time in recent memory.
Today’s homeowners and home buyers have taller hurdles to leap:
- Minimum FICO scores are higher
- Downpayment/equity requirements are larger
- Debt-to-Income thresholds are smaller
In other words, mortgage rates may stay low throughout 2010, but that won’t matter to homeowners failing to meet the new, minimum eligibility standards as set forth by the lenders.
If you’re among the many people wondering if now is the right time to buy or refinance a home, remember that — along with a probable increase in mortgage rates — mortgage approvals are getting more scarce.
The best home price or mortgage rate in the world won’t matter if you’re ineligible for financing.
March Pending Home Sales Point To Stronger Spring Market
Wednesday, May 5th, 2010The Pending Home Sales Index moved higher in March as home sales were spurred by low mortgage rates and an expiring tax credit. 
A “pending home” is a property that is under contract to sell, but not yet closed.
March marks the second straight month in which the Pending Home Sales Index improved after a series of weak showings this past winter.
March showed a 5 percent increase over the month, but the Pending Home Sales Index is still off its October 2009′s peak. October 2009 is a comparable period to March 2010 in that it marked the 1-month deadline before the home buyer tax credit’s initial expiration date. The credit was later extended to April 2010, of course.
That said, March’s surge in sales is being felt on the street.
Home buyers no doubt noticed the change in activity. Around the country, anecdotally, multiple offer situations were more common last month and “right-priced” homes tended to go under contract quickly.
The increase in March’s Pending Home Sales is diminishing the nation’s home supply which, in turn, should cause prices to rise in most markets.
Today’s buyers should consider making an offer sooner rather than later. Looking at the data, it appears the best time to have found a “deal” on a home may have been in February.