Rates Fall Slightly During Week

Indications that economic growth is moderating eased the pressure on mortgage rates, as the national average commitment rate on 30-year, fixed-rate mortgages fell to 6.72 percent for the week ending July 27, down from last week's average of 6.8 percent but still up from 5.77 percent a year ago, according to Freddie Mac.

The national average commitment rate for 15-year, fixed-rate mortgages was 6.34 percent, down from the previous week’s average of 6.41 percent. A year ago, the 15-year fixed-rate average was 5.34 percent."

Mortgage rates drifted lower this week on indications that economic growth is moderating, inflation remains under control, and the [Federal Reserve Board] just may pause raising rates for awhile," says Frank Nothaft, Freddie Mac vice president and chief economist."Meanwhile, recently released new homes sales for June fell to a lower than expected rate. That drop can be traced directly to higher mortgage rates, which are also helping to slow the growth of house prices in 2006," he adds.

The average for five-year adjustable-rate mortgages was 6.35 percent, compared with 6.36 percent the previous week and 5.27 percent a year earlier. One-year ARMs averaged 5.78 percent this week, down from 5.8 percent a week ago. The average rate on one-year ARMs was 4.46 percent for the same period the previous year. The national average commitment rate, along with fees and points charged by lenders, reflects the cost of obtaining the mortgage.

—REALTOR® Magazine Online

Market Update--Inventory Check

Did a little research on the MLS today. I always think it's interesting to look at inventory availability for the cities in our area.

Boulder
155 homes priced under $500k (45 are under contract)
398 homes priced above $500k (69 are under contract)

Louisville
87 homes priced under $500k (21 are under contract)
21 homes priced above $500k (3 are under contract)

Lafayette
149 homes priced under $500k (40 are under contract)
77 homes priced above $500k (11 are under contract)

Superior
68 homes priced under $500k (11 are under contract)
36 homes priced above $500k (10 are under contract)

Broomfield
181 homes priced under $500k (10 are under contract)
66 homes priced above $500k (2 are under contract)

Longmont
828 homes priced under $500k (76 are under contract)
154 homes priced above $500k (8 are under contract)

Erie
194 homes priced under $500k (20 are under contract)
71 homes priced above $500k (1 is under contract)

Niwot
20 homes priced under $500k (3 are under contract)
61 homes priced above $500k (5 are under contract)

Last time I did this update was June 6, 2006. Numbers are very similar which means the market is not picking up steam thru the summer. Inventory is just a little bit more than Demand at this time. Let's see how things look at the end of September.

The Rooms Formerly Known as Kitchen, Laundry

Gone are the days when rooms were named for their purpose.

Say goodbye to laundry rooms, studies, living rooms. Say hello to the “Live-In Room,” where people do what they want to do without feeling limited by walls.Take the room formerly known as a kitchen. The new concept room features a professional cooking area, a less formal dining and entertaining space, and a comfortable lounge area with sofas, a television, and a beverage center.

Electrolux, an international appliance company, debuted "Live-In Room" concepts at the 2006 Kitchen & Bath Industry Show. “We reviewed how the kitchen is used and developed a space that makes it a comfortable setting that encourages togetherness,” says John Swenson, director of brand marketing for the company.

Instead of walls, the room has "zones" that allow for residents to move around into different areas seamlessly and perform different tasks, from paying bills to watching movies on a comfy couch.Then there’s the room formerly know as the laundry room. Cabinetry manufacturer Merillat Industries LLC showed off its ideas for multiuse layouts incorporating various types of cabinetry to bring together laundry, craft, office, and other spaces. Design Services Director Paul Radoy says his team discovered that small kitchen spice drawers make great storage for sewing materials, fly-tying supplies, or model-building parts. Pull-out desk surfaces double as sewing stations, and an island on casters is ideal for a laundry-folding table or gift-wrapping surface.

Source: Remodeling Magazine

Web Sites Identify Where Sex Offenders Live, Work

Many buyers choose a neighborhood before they choose a home. At least three Web sites point home owners and buyers toward addresses where sex offenders live and work.

The most sophisticated is http://www.familywatchdog.us/ , which uses a color-coded mapping system. Users can click on the identifying squares and see photos, addresses, convictions, and other information about the offender. The site was created by Julie Clark, founder of the Baby Einstein Co., and John Walsh, host of the “America’s Most Wanted” TV show.

Not quite so complete but equally chilling are
http://www.us-sex-offenders.com/ and http://mapsexoffenders.com/ .—

REALTOR® Magazine Online

Rates Edge Lower On Bernanke Testimony

Interest rates edged lower again this past week on increased market expectations that the Fed is near the end of its tightening cycle. Ben Bernanke, Chairman of the Federal Reserve Bank, testified before Congress Wednesday and Thursday on the state of the economy. He stated that the economy is moderating which should limit inflation pressures over time. Minutes from the June FOMC meeting showed the members’ view of current monetary policy ranging from modestly restrictive to somewhat accommodative. The market increasingly expects that the Fed may leave the Fed Funds rate unchanged at its August meeting.

The market also received new economic data. The July New York Empire State Manufacturing Index, June Housing Starts, and the July Philadelphia Fed Index were all weaker than expected. The June Producer Price Index (PPI) and core June Consumer Price Index (CPI excluding the food and energy components) were both higher than expected. Year over year, core CPI is up 2.6% which is above the Fed’s comfort zone. June Industrial Production and Capacity Utilization were also stronger than expected.

Next week look toward Tuesday’s Existing Home Sales, Thursday’s Durable Goods Orders and New Home Sales, and Friday’s Advance read on second quarter GDP as potential market moving events. Wednesday’s Fed Beige Book, a survey of regional economic conditions, may also be a market mover.

Current rate for a 30 year fixed loan is 6.625% 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

Home Builders Courting Buyers

Builders in previously hot markets like Phoenix; Washington D.C.; Orlando, Fla.; and California are pulling out an array of incentives to woo buyers.

Centex Corp. has been offering 12-hour sales at some of its sales centers in California, where buyers are offered as much as $100,000 off the price of a multimillion-dollar home if they buy during sale hours.

Several builders are offering guaranteed pricing, where a home’s price will be reduced if pricing has changed by the time the home closes. This incentive is aimed at jittery buyers who are reluctant to sign a contract when pricing is volatile.

In Florida, Levitt Corp. is offering to help buyers who need to sell their existing home before purchasing a new one. The company’s ads offer a “guaranteed buyout program for your present home.”

In several places, builders are offering to pay buyers’ mortgages for the first year.

Alex Barron, an analyst at JMP Securities, predicts fundamentals will get worse before they get better, as speculative investors eventually will be forced to slash prices below home builders' to sell their homes. "Six months ago, I thought this might last only two or three quarters, but now I think sales will continue to go down in 2007," Barron says.

Source: The Wall Street Journal, Janet Morrissey (07/20/06)

'Drama Pricing' Gets Tough Markets Moving

Realtors in slow markets are learning how to use a strategy, often referred to as "drama pricing" or "energy pricing," which attract buyers by pricing a home at the low end of what similar properties in the area.

Drama pricing focuses on what buyers see on the market, forcing sellers to look at the prices of active listings.

In Massachusetts', Coldwell Banker Residential Brokerage is coaching its more than 3,500 practitioners on how to use the pricing strategy. Why? Buyers are overloaded with options and "only respond when they see a perception of value," says Angela Stamoulos, who teaches Coldwell Banker's course on this pricing technique.

Coldwell Banker's efforts reflect a sea change in the market's psychology. During years of record house-price gains in Massachusetts, a prospective seller would examine comparable houses that have sold in the prior six to 12 months and then determine how much more he could get for his home.

Janice Hoffman created a buzz in Cambridge by using drama pricing to sell an eight-room Victorian for $185,000 above the $1.1 million asking price. She attracted 130 people to the April 9 open house because the asking price was at the low end of similar houses in the Cambridge market. Her client received nine offers that ignited a bidding war.

Prices should be set "so that people who can afford it will step up," says Hoffman, a practitioner with William Raveis Real Estate in Newton, Mass.

Source: The Boston Globe, Kimberly Blanton (07/17/2006)

Rates Ease Lower on Deficit, Middle East Turmoil

Interest rates moved slightly lower on the week on a lower than expected budget deficit for fiscal year 2006 and increased turmoil in the Middle East. May’s international trade deficit was lower than expected and today’s June Retail Sales report was weaker than expected. Today’s consumer sentiment index was also weaker than expected. Crude oil futures are trading over $77 per barrel which will continue to pressure inflation at both the wholesale and retail levels. The Dow Jones Industrial Average has lost over 300 points on the week.

Next week look toward Monday’s Industrial Production, Tuesday’s Producer Price Index (PPI), and Wednesday’s Consumer Price Index (CPI) and Housing Starts as potential market moving events. Also, Fed Chairman Ben Bernanke testifies before Congress on Tuesday and Wednesday regarding the economy.

Current rate for a 30 year fixed loan is 6.75% 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 6.375% 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 6.625% 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

How Much Homeowner’s Insurance Do I need?

Every day people ask themselves, “How much homeowner’s insurance do I need?” The answer varies, depending on each person’s situation. Usually you should insure your home for its whole value, the actual building and all of its contents.

In order to find out exactly how much your home is worth, you should have it appraised. You can have an appraiser, builder or insurance agent give you an estimate on its value. However, if you ever remodel or add on to your home, its value will increase, and you will then need to purchase more coverage.

For any valuable possessions you have, you can purchase extended coverage, to ensure those items are covered as well. The best thing to do is take a room-by-room inventory of your valuables then keep this list somewhere outside the home, for example, a safe-deposit box.

To determine if valuable possessions, such as TVs, stereos or computers are covered, or if you have any other questions about homeowner’s insurance, contact your State Farm insurance agent.

By: Helen Wagner
State Farm® agent
5360 Arapahoe Ave.
Boulder, CO 80303303
442-7844helen.wagner.jrn6@statefarm.com

Home Sales Expected To Stabilize In The Months Ahead

WASHINGTON (July 11, 2006) – Home sales are projected to ease modestly but should stay within a relatively narrow range over the balance of the year, according to the National Association of Realtors.

David Lereah, NAR’s chief economist, said the market is showing signs of stabilizing. “The major housing indicators have been moving up and down within a reasonable range, which means the market should even-out just below present levels,” he said. “At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but don’t look for any big shifts one way or the other.”

Existing-home sales are expected to decline 6.7 percent to 6.60 million in 2006 from 7.08 million last year. That would still be the third highest level on record. New-home sales should fall 12.8 percent this year to 1.12 million from 1.28 million in 2005. Housing starts are forecast to decline 6.8 percent to 1.93 million this year from 2.07 million in 2005.The 30-year fixed-rate mortgage is likely to reach 7.0 percent by the end of the year.

“The uptick in interest rates has been slowing home sales,” Lereah said. “We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country.”

NAR President Thomas M. Stevens from Vienna, Va., said consumers who have been on the sidelines should feel more confident about the market normalization. “When it comes to big ticket purchases, buyers are more comfortable in a stabilizing environment,” said Stevens, senior vice president of NRT Inc. “At the same time, home sellers in most areas understand that the period of abnormal price growth is over, and they have become more realistic about the current market. This is helping to ease the pressure on home prices in some areas.”

The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. With more construction in lower cost regions as well as price incentives that are helping to clear unsold inventory, the median new-home price should increase 1.0 percent this year to $243,300.

The unemployment rate is projected to average 4.7 percent in 2006, while inflation, as measured by the Consumer Price Index, is forecast at 3.4 percent. Growth in the U.S. gross domestic product is expected to be 3.4 percent this year, and inflation-adjusted disposable personal income is likely to grow 3.1 percent.

Rates Flat Over Last Week On Mixed Jobs Report

Interest rates were flat on the week. Today’s June employment report showed that non-farm payrolls grew by 121,000 on expectations that payrolls grew by 200,000. The unemployment rate remained unchanged at 4.6%. Average hourly earnings, though, increased 0.5% on expectations of 0.3% increase. This gain is the highest in five years. With job growth softening, though, increases in average hourly earnings may soften as well in coming months.

The ISM Manufacturing and Non-Manufacturing indices were released this week. Both were weaker than expected. The employment and price components of both indices declined. Crude oil futures are trading over $75 per barrel and some market analysts are expecting prices to increase to $80 per barrel. The economy shows signs of softening, yet the inflation threat from higher energy prices still remains. The Fed will have a difficult decision regarding monetary policy at their next meeting in August.

Next week look toward Wednesday’s international trade report along with Friday’s Retail Sales report as potential market moving events. Also, continue to monitor energy prices as higher prices may provide a barrier to lower interest rates.

Current rate for a 30 year fixed loan is 6.75% 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 6.50% 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 6.75% 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

Happy 4th of July

The City of Louisville held it's Annual 4th of July picnic. This year it was held at the new community park.

The Mayor, Chuck Sisk, and his team cook and serve up dogs and brats for everyone--Free!! Pretty cool. Line was long for the food but everyone got some.

All kinds of games, entertainment and fun for everyone all ages.