Rates Flat On The Week; CPI Meets Expectations
Interest rates continued to trade in a narrow range this past week. Today’s Consumer Price Index (CPI) for August was within market expectations as both the overall index and core index excluding the food and energy components increased 0.2%. Year over year the overall CPI is up 3.8% and the core CPI is up 2.8%. Most market analysts expect the Fed to leave short-term rates unchanged at next week’s FOMC meeting even though the core CPI is slightly higher than their comfort zone of 1-2% growth. August Retail Sales were stronger than expected and August Industrial Production was weaker than expected.
Crude Oil futures prices dropped again this past week and are currently trading under $63 per barrel. The Dow Jones Industrial Average is up about 170 points on the week.
Next week look toward Tuesday’s Housing Starts and Producer Price Index (PPI) along with Wednesday’s FOMC announcement as potential market moving events.
Current rate for a 30 year fixed loan is 6.375% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Current rate for a 15 year fixed loan is 6.25% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Current rate for a 5 year ARM is 6.50% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Posting info and rates provided by: Grant Hickman Senior Loan Officer Premier Mortgage Group, LLC 1844 Folsom Street Boulder, CO 80302 303-449-8855 ghickman@pmglending.com
Rates Flat On The Week; CPI Meets Expectations
Interest rates continued to trade in a narrow range this past week. Today’s Consumer Price Index (CPI) for August was within market expectations as both the overall index and core index excluding the food and energy components increased 0.2%. Year over year the overall CPI is up 3.8% and the core CPI is up 2.8%. Most market analysts expect the Fed to leave short-term rates unchanged at next week’s FOMC meeting even though the core CPI is slightly higher than their comfort zone of 1-2% growth. August Retail Sales were stronger than expected and August Industrial Production was weaker than expected.
Crude Oil futures prices dropped again this past week and are currently trading under $63 per barrel. The Dow Jones Industrial Average is up about 170 points on the week.
Next week look toward Tuesday’s Housing Starts and Producer Price Index (PPI) along with Wednesday’s FOMC announcement as potential market moving events.
Current rate for a 30 year fixed loan is 6.375% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Current rate for a 15 year fixed loan is 6.25% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Current rate for a 5 year ARM is 6.50% with no points based on a $250,000 Purchase Transaction; $187,500 Loan Amount; 10-20% Down. Posting info and rates provided by: Grant Hickman Senior Loan Officer Premier Mortgage Group, LLC 1844 Folsom Street Boulder, CO 80302 303-449-8855 ghickman@pmglending.com
Model Home Visitors Not Always Buyers
Home owners who are satisfied with their current dwelling and have no plans to move are visiting open houses and model homes for interior design tips, to get ideas for new amenities, and just to see how their home stacks up."I just like to look for anything that strikes me,” says Danny Vaca or Norco Hills, Calif., as he strolls through a $1 million-plus KB Home model in Sienna Ridge. “Our basic interior is done, but you always see these little knick-knacks that make you think, 'Hmm.' " Some in the industry say that as many as 90 percent of model-home visitors aren’t really interested in buying, although others say the figure is actually lower because sometimes people who say they're just looking are really in the early stages of home shopping. Home builders are well aware that looky-loos visit their model homes; it’s part of doing business, they say. Some builders even use looky-loos to their advantage by closely watching the visitors for clues about what features appeal to them and what might turn off prospective buyers. Randall Lewis, executive vice president of the Lewis Group of Cos., pops into model homes several weekends a year just to eavesdrop as visitors critique floorplans and make comments. Why? "To see where they spend their time, which rooms capture their attention and to hear their feedback," he says. "Model homes are a great laboratory for anybody in the business."
Source: Los Angels Times, Dawn Bonker (08/27/06)
Mortgage Rates Decline to 5-Month Low
Last week’s better-than-expected reading on the Consumer Price Index helped to push mortgage rates down to a five-month low, according to Bankrate.com’s weekly mortgage survey of large lenders. The average 30-year, fixed-rate mortgage fell to 6.48 percent, the lowest since March 29, while the average 15-year, fixed-rate mortgage, popular for refinancing, dropped by a similar amount to 6.19 percent. On larger loans, the average jumbo 30- year, fixed-rate declined to 6.74 percent. Adjustable-rate mortgages also backtracked. The average 5/1 ARM slid to 6.24 percent, and the average one-year ARM retreated to 6 percent. Slower economic growth has helped bring fixed mortgage rates to a five-month low, along with the Federal Reserve Board hitting the pause button on rate increases. Although inflation remains a threat, bond investors are confident in the Fed's forecast that inflation will recede as the economy cools, Bankrate.com says in its report. Fixed mortgage rates have fallen nearly one-half of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.48 percent, the same loan originated today would carry a monthly payment of $1,040.74. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments. Source: Bankrate.com (08/24/06)
NAR: Existing-home Sales Down, Prices Soften
Existing-home sales were down in July, while home prices in many areas are slightly below year-ago levels, according to the National Association of Realtors®.Total existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 4.1 percent to a seasonally adjusted annual rate1 of 6.33 million units in July from a downwardly revised pace of 6.60 million June, and were 11.2 percent below the 7.13 million-unit level in July 2005.David Lereah, NAR’s chief economist, said higher interest rates dampened sales but that price softening is good news for the housing market because it is drawing buyers. “Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” he said. “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.”The national median existing-home price2 for all housing types was $230,000 in July, up 0.9 percent from July 2005 when the median was $228,000. The median is a typical market price where half of the homes sold for more and half sold for less.According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.76 percent in July, up from 6.68 percent in May; the rate was 5.70 percent in June 2005. Last week, the 30-year rate declined to 6.52 percent. “An unexpected quarter-point drop in mortgage interest rates over the last month also could help to stimulate the housing market,” Lereah said.NAR President Thomas M. Stevens from Vienna, Va., said most sellers continue to see excellent returns on their homes. “Considering that typical sellers have been in their home for six years, the average appreciation during that time is close to 60 percent,” said Stevens, senior vice president of NRT Inc. “This demonstrates the value of housing as a long-term investment – the longer you own, the better your return.”Total housing inventory levels rose 3.2 percent at the end of July to 3.86 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.--NAR
Affordable Ways to Make a Home Sparkle
A home seller doesn’t have to spend a fortune on redecorating in order to impress buyers. But it does take a little creativity and a clear understanding of the main goal: to remove personal clutter and make everything else shine.Here are a few simple (and affordable) suggestions for making a home more impressive to potential buyers:
Outside: Spread fresh mulch on the flowerbeds; paint the front door; and buy a new "welcome" mat.
The mudroom: Get rid of the litter box and the pet food bowls; put cleaning supplies out of sight; and hang coats in the closet, not on hooks.
The bathroom: Hide personal items such as athlete’s foot powder or laxatives; put toothbrushes in the medicine cabinet; buy a new shower curtain.
The closets: Ruthlessly thin out clothes and shoes; hang what’s left on matching hangars; and replace the light bulbs with 100 watts.
The kitchen: Get rid of all but the basics in the cupboards and clean everything off the counters. Source: Universal Press Syndicate, Michael Walsh (08/20/2006)
Mortgage Rates Continue String of Declines
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 6.52 percent during the week ended Aug. 17, marking the fourth-straight decline.Rates are still 72 basis points higher than a year ago. A basis point is 0.01 of a percent. Five-year hybrid adjustable-rate mortgages, which carry fixed rates for the first 5 years and then float, fell 3 basis points to 6.18 percent. One-year ARMs declined 4 basis points to 5.65 percent. The 10-year Treasury yield, the benchmark for mortgage rates, has fallen as well due to data that shows moderate inflation and weakness in the economy. Source: Investor's Business Daily (08/18/06)
New-Home Construction Falls to 2-Year Low
New home construction continued to fall in July, dropping to its lowest rate in nearly two years, the U.S. Commerce Department reported yesterday.U.S. housing starts fell 2.5 percent to 1.8 million. This is the fifth consecutive decline in housing starts and the slowest pace since November 2004.Richard DeKaser, chief economist at Cleveland-based National City Corp., says builders are breaking ground for fewer homes because they have big unsold inventories of previous projects." What we are continuing to see is the supply side is slowing and declining at a pretty swift rate," said DeKaser. "We should expect to see more of this." The economist cited a survey released Tuesday by the National Association of Home Builders, which showed a plunge in builder confidence. Builders' views on current and expected sales had fallen to its lowest level since February 1991.Other observers are more optimistic. "Housing is still performing on a level that far exceeds the norm for the industry, albeit at a rate that has backed off somewhat from the 2 million-plus pace of recent years," says Bob Walters, chief economist for Michigan-based Quicken Loans.Source: The Chicago Tribune, Sharon Stangenes (08/17/2006)
