Mortgage News

I remember when we purchased our first home back in 1988 and mortgage interest rates were 11%! I worked for a bank at the time and was elated to get a discounted rate of 8% which helped us tremendously to purchase our brand new condominium which at the time was $125,000, a stretch for our budget.

Well luckily it is now 2016 right around the corner from 2017 and though the mortgage rates have slightly creeped up, they are still historically low. When buyers and sellers ask me questions about predicting the future market, I give them my professional opinion of course, but I always say “if I only had a crystal ball”, which I do not, I could predict with certainty the future of the real estate market.

So why do you ask is the real estate market so HOT? Because no one can predict where the mortgage interest rates will go to in the New Year and most people don’t realize how even the smallest increase in the rate can effect a buyers buying power. That my friends is getting buyers off the fence even in the midst of a cold holiday season when most sellers think no one is buying…think again.

Mortgage rates profound effect on affordability. Below is an example of how the price of waiting can affect your buying power;

Rate Payment Max Price Buying Power Difference
3.875%  $1,900  $380,000  $0
4.375%  $1,900  $363,000  -$17,000
4.875%  $1,900  $345,000  -$35,000

So what are you waiting for, with home prices at their lowest in years and definitely on the rise and historically low interest rates, there has never been a better time to buy a piece of the American dream and buy your own home!

For the latest Randolph market update, go onto www.Randolph-NJ-Homes.com to view monthly home sales.

Last week’s economic events included a number of readings on housing related topics. The National Association of Home Builders released its report on builder confidence in housing markets, Housing starts reached their highest level since the great recession, and existing home sales exceeded expectations and the prior month’s reading. The Federal Reserve released minutes for its most recent FOMC meeting, which indicated that while a majority of FOMC members are leaning toward raising the Fed’s target federal funds rate, concerns over certain aspects of the economy continue to keep the Fed from citing a date for raising its target interest rate.

Home Builder Confidence Nears Highest Reading in 10 Years

The National Association of Home Builders reported its highest level of builder confidence in housing market conditions since November of 2005. August’s reading was 61 as compared to an expected reading of 59 and July’s reading of 60. Any reading over 50 indicates that housing market conditions are good. NAHB Chief Economist David Crowe said that August’s readings were consistent with builder expectations of gradual improvement in overall housing market conditions. Builder confidence in current market conditions rose by one point to a reading of 61; confidence in buyer foot traffic in new housing developments rose 2 points to 45 and the reading for expected home sales conditions over the next six months was unchanged at a reading of 70.

Builder confidence as shown by the three-month rolling average indicated that builder confidence increased by three points for a reading of 63 for the West; the Midwest also posted a gain of three points for a reading of 58. The South posted a two point gain in builder confidence for a reading of 63. In the Northeast, builder confidence held steady at 46.

Existing Home Sales Hit New Post-Recession High in July

According to the National Association of Realtors®, sales of pre-owned homes reached a new post-recession record in July. Sales of previously owned homes rose to a seasonally adjusted annual rate of 5.59 million sales as compared to expectations of 5.48 million sales and June’s reading of 5.48 million sales. Sales of existing homes have risen for three consecutive months and are 10.30 percent higher year-over-year. Higher home prices are helping homeowners move up to larger homes, but analysts said that first-time buyers are still struggling to buy due to strict mortgage requirements and high demand for homes.

Commerce Department: Housing Starts Higher, Building Permits Lower

The Commerce Department reported that June housing starts increased from 1.20 million in May to 1.21 million in June; this is a month-to-month increase of 0.20 percent. Economists had expected a dip in housing starts to a rate of 1.185 million on an annual basis. Single family housing starts rose by 12.90 percent to a seasonally adjusted annual rate of 782,000 starts.

Building permits slipped in July by 16.30 percent to an annual rate of 1.29 million permits issued. Permits for single family homes, which account for nearly 75 percent of permits issued, fell by 1.90 percent to an annual rate of 679,000 permits issued. Demand for multi-family homes such as condos and apartments is rising as would-be home buyers sit on the sidelines and many millennials prefer to rent. In spite of these factors the rate of building permits issued rose by 7.50 percent year-over-year.

Building permits issued rose by 7.70 percent in the South, and rose by 20 percent in the Midwest. In the West, permits issued declined by 3.10 percent in July, while the Northeast posted a decline of 27.50 percent in building permits issued. This was not a surprise as builders rushed to take out permits before a tax credit expired in June.

Mortgage Rates Mixed

Freddie Mac reported that average mortgage rates fell for fixed rate mortgages and ticked upward for 5/1 adjustable rate mortgages. The average rate for a 30-year fixed rate mortgage fell by one basis point to 3.93 percent. 15-year fixed mortgage rates fell by two basis points to 3.15 percent and the average rate for a 5/1 adjustable rate mortgage rose by one basis point to 2.94 percent. Discount points were unchanged across the board at 0.60 percent for 30 and 15-year fixed rates and 0.50 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s economic news includes the Case-Shiller 10 and 20 city home price index reports, FHFA’s house price report for home sales connected with mortgages owned by Fannie Mae and Freddie Mac, and pending home sales. Core inflation numbers will also be released; this is significant as the Fed has set 2.0 percent annual inflation as one of its indicators for raising the Federal funds rate. Freddie Mac’s survey of average mortgage rates and weekly jobless claims will be released on Thursday, and this week wraps up with the consumer sentiment report on Friday.

 

house-dollarbills2It’s official: 2014 was the best year for total job growth since 2000. The housing market now has a confluence of several important demand-boosting factors that should make 2015 a big year for growth in home sales.

First, mortgage rates remain—at least for the time being—at near historic lows. The latest reprieve from higher rates is thanks to the bond market’s reaction to global economic concerns. Yet, as the jobs data indicate, the U.S. economy is on much better footing than the rest of the world.

Key factors for first-time buyers

But the key issue for first-time buyers has not been rates, which have been historically low for several years. Their employment situation, overall level of confidence, ability to qualify for credit and ability to afford the down payment have been the larger issues.

December data show that employment for younger households, in particular, has improved dramatically in the past year. For example, more civilian jobs for 25- to 34-year-olds were created in 2014 than in any other year since 1987.

Mortgage backers Fannie Mae and Freddie Mac clarified their credit qualification standards in the fall, which had been murky since 2009 legislation enacted in reaction to the housing bust. This should make it easier for many would-be home buyers to get a loan with slightly lower FICO scores and slightly higher loan-to-income and debt-to-income ratios.

The new low-down-payment programs announced in December from Fannie Mae and Freddie Mac will make conventional mortgages more accessible to first-time buyers.

FHA change could save borrowers almost $1K a year

The latest important factor was announced this week: The Federal Housing Administration intends to lower the annual mortgage insurance premium rate that applies to FHA-insured loans from 1.35% to 0.85%.

That may not seem like a lot, but it can make a tremendous difference to the very people that FHA mortgages are intended to help.

For example, the median price on an existing home sold in November was $205,300, according to the National Association of Realtors. Assuming a 3.5% down payment, the higher fee amounted to $222.88 a month on top of the mortgage payment. The new monthly fee would be $82.55 lower, or just shy of $1,000 a year. For a median household in the U.S., that difference is almost 2% of its annual income.

That 2% could make a critical difference to falling within the income qualification ratios required for a loan.

First-timer buyers now have a much better chance of qualifying and buying, and would-be sellers should be encouraged to think about this being the year to list.

This Week’s Mortgage News

Over the past several years, entry-level buyers – who tend to be first-time homeowners and who purchase smaller homes – have made up a diminished share of overall homebuyers. This has subsequently limited the ability of some homeowners to move up to a bigger home. Now, executives at several leading homebuilders report that they are seeing signs of entry-level buyers returning to the market, crediting improvements in jobs and greater access to mortgages.

Another outcome of the return of entry-level buyers to the market is a leveling off of the median size of a new home. New homes have been getting bigger since 2012, but an increase in first-time buyers is expected to put downward pressure on new-home sizes, according to Robert Dietz, an economist with the National Association of Home Builders.

Consumer surveys show that new-home buyers prefer homes with more rooms, larger garages, basements and great rooms, so the drop in home size will not be extreme. In addition, it is expected to occur gradually as the market shifts.

Industry Trends

WFS Jumbo rate – 5/5 ARM: 3.50% Other WFS rates – Check with your GSM for current rates. Refi Index – 1322.2 (-3.98%) Purchase Index – 164.8 (-1.02%) NAHB Builder Confidence – 55 (+2 pts.) Existing Home Sales – 5,150,000 (+2.4%) New Home Sales – 406,000 (-8.1%) Pending Home Sales – 102.7 (-1.10%)

(As of Aug. 21, 2014.)

SOURCE: Mortgage News Daily

Featured Product: Delayed Purchase Refinance Program

Sometimes, the only way to buy a home is to make the purchase with all cash and then refinance at the first opportunity. Until now homeowners have been required to wait six months from the closing date. But not anymore. Our new Delayed Purchase Refinance Program allows all-cash buyers to refinance their home as soon as 24 hours after purchase. Speak to a Weichert Gold Services Manager for more information.

Featured Product: Renovation Loan

A renovation loan is one loan that provides the funds needed to both purchase and renovate an owner-occupied one- to four-family home. These loans provide many benefits to homebuyers, including the ability to renovate the home to their liking and to purchase a home below market and make improvements to create higher value. What’s more, there is only one loan, which is fixed rate, government backed and requires only a low downpayment. Speak to a Weichert Gold Services Manager for more information.

Industry Trends

WFS Jumbo rate – 5/5 ARM: 3.125%
Other WFS rates – Check with your GSM for current rates.
Refi Index – 1328.9 (+.38%)
Purchase Index – 181.7 (+3.71%)
NAHB Builder Confidence – 49 (+4 pts.)
Existing Home Sales – 4,890,000 (+4.9%)
New Home Sales – 504,000 (+18.6%)
Pending Home Sales – 103.9 (+6.13%)

(As of July 10, 2014.) 

SOURCEMortgage News Daily

While the lending environment has not yet fully returned to normal, lending “is loosening up again after being extremely tight,” says Michele Raneri, vice president for analytics at Experian Information Solutions, a major consumer credit-rating company.

Evidence of this is seen in the credit scores of those getting loans. When reviewing fourth quarter 2013 Experian statistics, prime and near-prime borrowers – those considered most creditworthy – accounted for 58.5 percent of all mortgages, compared to 46.7 percent in late 2011.

In addition, in the fourth quarter of last year, the number of prime and near-prime loans that were granted increased 7.7 percent and 9.5 percent respectively from fourth quarter 2013. Raneri attributes this to pent-up demand from consumers who are now finding it easier to borrow.

Homebuyers may not realize that it could be easier than they think to be approved for home financing. By speaking to a Gold Services Manager, they can get a clearer picture of exactly what they can afford in a new home.

Industry Trends

WFS Jumbo rate – 5/5 ARM: 2.875% Other WFS rates – Check with your GSM for current rates. Refi Index – 1432.2 (-6.29%) Purchase Index – 174.0 (+4.00%) NAHB Builder Confidence – 47 (+2.17%) Existing Home Sales – 4,600,000 (-.43%) New Home Sales – 440,000 (-3.30%) Existing Home Prices – 237,300 (+0.30%)

(As of April 3, 2014.)

SOURCE: Mortgage News Daily

Featured Product: Weichert 15/15

Imagine 180 monthly payments without a single adjustment. Weichert Financial Services now offers a 30-year amortization product that only adjusts once — after 15 years. This unique structure provides the sense of security one finds with a fixed rate, while letting borrowers enjoy the advantages of an adjustable-rate loan.

This Week’s Mortgage News

President Obama signed into law a bipartisan bill reversing much of a 2012 overhaul of the government’s flood insurance program. This comes as a relief for homeowners living in flood-prone areas who would have seen large increases in insurance costs.

The changes to the original program were made to help eliminate subsidized rates for those in flood-prone areas. Implementing this required significant updating of the flood maps used to set premiums, resulting in often-unaffordable rate increases for many homeowners along the Atlantic and Gulf coasts and in flood plains.

To help combat the extreme rate hikes, the new law caps flood insurance premium increases at 18 percent a year. However, people whose second home is in a flood zone and those whose properties have flooded repeatedly would continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.

In a positive development for the real estate industry, the law allows sellers of homes built before the original flood maps were drawn to pass their subsidized insurance rates on to the people buying their home

Industry Trends

WFS Jumbo rate – 5/5 ARM: 2.75%
Other WFS rates – Check with your GSM for current rates.
Refi Index – 1432.2 (-6.29%)
Purchase Index – 174.0 (+4.00%)
NAHB Builder Confidence – 47 (+2.17%)
Existing Home Sales – 4,600,000 (0.43%)
New Home Sales – 440,000 (-3.30%)
Pending Home Sales – 95.0 (+0.11%)

(As of Mar. 27, 2014.) 

SOURCEMortgage News Daily

Featured Product: Weichert 15/15 

Imagine 180 monthly payments without a single adjustment. Weichert Financial Services now offers a 30-year amortization product that only adjusts once — after 15 years. This unique structure provides the sense of security one finds with a fixed rate, while letting borrowers enjoy the advantages of an adjustable-rate loan

 

This Week’s Mortgage News

Buyers using a jumbo mortgage might encounter a pleasant surprise: Mortgage rates for jumbo mortgages – loans over $417,000 in most of the United States and over $625,500 in pricier areas – are now at, or below, rates for conventional mortgages.

This compares to recent years when it was standard for mortgage rates for jumbo financing to be higher than comparable conventional loans. In fact, in 2009, jumbo rates were almost 2 percentage points higher, making these home purchases less affordable.

The lower costs and improved availability of jumbo financing can be attributed to recent changes in the home financing market, including the loosening of the secondary market for jumbo loans and the implementation of guidelines that exempt jumbo mortgages.

In addition to high-end homebuyers, this recent change is also good for the real estate market as a whole. Buyers taking out jumbo loans are usually move-up buyers, meaning the home they are selling is now available to a first-time buyer or other consumers seeking a home at a lower price point.

Featured Product: 10% Down Jumbo Loan 

Weichert Financial Services can offer qualified borrowers a fixed-rate jumbo mortgage loan of between $417,001 and $850,000 with only as little as a 10% downpayment. This opens a window of opportunity for buyers able to afford the monthly payments and upkeep on a home, but who have not yet been able to save enough to make the typical 20% downpayment.

Speak to a Weichert Gold Services Manager for more details.

Industry Trends

WFS Jumbo rate – 5/5 ARM: 2.75%
Other WFS rates – Check with your GSM for current rates.
Refi Index – 1547.6 (-3.11%)
Purchase Index – 168.8 (-0.47%)
NAHB Builder Confidence – 47 (+2.17%)
Existing Home Sales – 4,870,000 (+1.0%)
New Home Sales – 468,000 (+9.60%)
Pending Home Sales – 95.0 (+0.11%)

(As of Mar. 13, 2014. WFS rate: Mar. 20.) 

SOURCEMortgage News Daily

Missy “Mary Jo” Iemmello

“MOVE WITH MISSY”

284 Route 10 West

Randolph, NJ

973-945-3331

missrealestate@optinline,net

This Week’s Mortgage News

During a speech at Mercer University in Macon, Ga., this week, Federal Reserve Bank of Atlanta President Dennis Lockhart expressed his optimism for the U.S. housing market. While stating that he was not “effusively bullish” on housing, Lockhart did feel that the sector had momentum and that his outlook for 2014 remained positive.

One of the examples Lockhart provided to back up his forecast was that interest rates continue to be favorable for purchasing a home, even despite tightened regulatory requirements to qualify for a mortgage. In addition, he cited pent-up demand among younger Americans who have been waiting to form their own individual household. Once they begin doing so, this should lead to home purchases and building activity.

Lockhart also provided commentary on the possibility that recent weaknesses in economic data could be a result of poor weather throughout much of the country, stating that while he is still tracking the numbers carefully, it is too early to draw a conclusion.

A former Georgetown University professor, Lockhart has led the Atlanta Fed since 2007

Industry Trends

WFS Jumbo rate – 5/5 ARM: 3.00% Refi Index – 1644.5 (-2.69%) Purchase Index – 160.7 (-6.30%) NAHB Builder Confidence – 46 (-17.86%) Existing Home Sales – 4,870,000 (+1.0%) New Home Sales – 414,000 (-6.97%) Pending Home Sales – 92.4 (-8.70%)

As of Feb. 20, 2014.

SOURCE: Mortgage News Daily

Featured Product: Weichert MI Advantage

Weichert MI Advantage includes lender-paid mortgage insurance (MI). This means Weichert – not the borrower – pays the MI premium. Borrowers who choose this type of loan will have a slightly higher interest rate, but pay no MI premium at closing or within their monthly payments. This means lower monthly mortgage payments for most borrowers.

This Week’s Mortgage News

Mortgage application activity was up at the end of January due to lower mortgage rates. According to the Mortgage Bankers Association (MBA), its Market Composite Index, a measure of mortgage application activity, rose 0.4 percent for the week ended Jan. 31 on a seasonally adjusted basis, and 14 percent on an unadjusted basis from the week prior.

Breaking down the applications further, the MBA reported that its unadjusted Purchase Index increased 14 percent week-over-week. Refinancing remained at 62 percent of total applications, and the share of applications filed for adjustable rate mortgage products (ARMs) rose a percentage point to 8 percent.

This increase in application activity can be attributed to lower rates. In fact, on Thursday, Freddie Mac said mortgage rates had decreased for five consecutive weeks, bringing them back to November 2013 levels. These low rates present an opportunity for real estate sales professionals to reach out to their buyer clients and prospects and let them know that buying a home has become more affordable due to the decreased cost of financing their purchase.

Industry Trends

WFS Jumbo rate – 5/5 ARM: 2.75%
Refi Index – 1693.2 (2.92%)
Purchase Index – 180.5 (-3.78%)
NAHB Builder Confidence – 56 (+1.75%)
Existing Home Sales – 4,870,000 (+1.0%)
New Home Sales – 414,000 (-6.97%)

As of Feb. 6, 2014.

SOURCEMortgage News Daily

Newsletter Sign Up

Add your email address to get the monthly newsletter.

How's The Market?

Free Real Estate Statistics Updated Monthly

Randolph Twp

Shongum Lake

Search For Homes

$
$

What's My Home Worth?

Find an estimate of your Randolph Twp & Shongum Lake home's current value today!

Click to find out

Featured Homes