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Mortgage Rate Update Ending 8/4/2010

Bankrate.com  conducts a weekly national survey on the interest rates for the five most common consumer banking products.  Here’s the outcome for 8/4/2010:

• 30 Year Fixed Rate: 4.66 percent
• 30 Year Fixed Rate Jumbo: 5.34 percent
• 15 Year Fixed Rate: 4.11 percent
• 5/1 ARM (Adjustable): 3.95 percent
• 1 Year ARM (Adjustable): 4.80 percent 

According to the Mortgage Bankers Association:

• Mortgage applications rose 1.3 percent when compared to a week earlier
• Refinance applications shot up 1.3 percent when compared to a week earlier
• Applications for new purchases increased 1.5 percent

According to the National Association of Realtors:

• Pending home sales fell 2.6 percent in June when compared to a month earlier
• Sales were also down 18.6 percent year over year.

Mortgage Rate Update Ending 7/7/2010

Bankrate.com  conducts a weekly national survey on the interest rates for the five most common consumer banking products.  Here’s the outcome for 7/7/2010:

• 30 Year Fixed Rate: 4.74 percent
• 30 Year Fixed Rate Jumbo: 5.48 percent
• 15 Year Fixed Rate: 4.22 percent
• 5/1 ARM (Adjustable): 4.06 percent
• 1 Year ARM (Adjustable): 4.79 percent 

According to the Mortgage Bankers Association:

• Mortgage applications rose 6.7 percent when compared to a week earlier
• Refinance applications shot up 9 percent and are at 13-month highs
• Applications for new purchase dipped 2 percent

According to the National Association of Realtors:

• Pending home sales fell 30 percent in May when compared to a month earlier
• Sales were also down 15.9 percent year over year.

This Winter: A Test for Tri-Valley Home Sales

Despite recent figures showing that house prices have increased for the last three months, concerns for this winter are starting to appear that housing may be in for a deep freeze. Two main factors are at the focal point of the debate: default and distress sales and artificially low interest rates.  One or a combination of the two could slow down home sales and shift home prices downward.

In the Tri-Valley area, default and distress properties have been waning. The last few months have seen less foreclosure and short sale properties come on to the market.  Six months to over a year ago, these default and distressed homes where primarily found in the lower to middle price ranges. Many of the homeowners in this price range had secured subprime mortgages which later resulted in big problems and consequently led to foreclosures and short sales. Now, things are beginning to shift away from the lower to middle priced homes.  More homes at the middle to upper price ranges are expected to become default and distress sales according to a recent New York Times article.  “Plenty of pain yet to come,” said Joseph Shapiro, chief United States economist for MFR.

In talking to homeowners, I have identified that some homeowners at the higher price points have been more equipped financially to survive the downturn in the market.  Despite job losses or reduction in income, they have been able to live off savings or the liquidation of stock for a longer period of time.  Some have been able to adjust their lifestyle while others have found jobs to replace lost income. However, for those who have not been able to overcome their hardship, they are faced with the grim reality that their life savings is being wiped out.  They may be left with no choice but to consider giving up their home to short sale or foreclosure.

On top of the potential for more default and distressed sales, another factor that could weigh in on home sales is Read more

Focus on Credit. Enough Said.

How many of you can’t get that jingle out of your head from the commercial on television touting “free credit report dot com”.  I am now seeing a therapist about it.  Despite joking about my current mental state, credit has been making headlines recently both nationally and in the Tri-Valley area and is quite a serious subject.  With many homes turning to short sales and foreclosures, some homeowners don’t realize the huge impact that a short sale or foreclosure can have on their credit and subsequently their future buying power.

In a recent article by Strategic Equity, Dave Muti, author of “Mortgages:  What You Need to Know,” was asked how a credit score is calculated and tips for increasing it. The Fair Isaac Corporation created the most common credit score used today - the FICO score.  It ranges between 350 and 850.  The higher the score, the better the interest rate you can secure.  720 is the credit score threshold that you don’t want to drop below in order to secure the best rates.  If you drop below 500, you may not even be able to secure a mortgage.

The following are five critical credit criteria reported in the article:

1. Payment History - This pertains to your track record for paying your bills. It makes up 35% of your score. Essentially, this means paying your bills on time. A mortgage “late” is much more serious than a credit card “late”
2. Credit Ratio - How much you owe is 30% of your score. Just because you owe less does not translate to having a better score.  This score is determined between the various types of credit you have opened (see #3 below). There needs to be a balance between how much you owe and how much you have available to you.  Having too many credit cards can be a negative and having only one could be as well. The goal is to have a lot of credit available to you, and to then use that credit, while at the same time not maintaining a high balance.
3. Credit Type - The type of accounts you have makes up Read more
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   Written by Adam Golden · Filed Under Featured, Tri-Valley Real Estate Update | Leave a Comment 

   Dublin, San Ramon, Danville, Pleasanton, and Livermore’s August Real Estate Update

   August 9, 2009

   This graph consists of real time inventory numbers for Danville, Dublin, Livermore, San Ramon and Pleasanton. Here are the active real estate housing stats for the Tri-Valley cities for the month of August.

   The current market conditions for the Tri-Valley appear to be leading us toward a classic case of supply and demand. Inventory numbers continue to drop across the board in the Tri-Valley area and buyers are actively pursuing homes through open houses and showings. Logic would lead us down a path that as more buyers purchase homes and the inventory numbers continue to wane, we should see a stabilization of home prices. I deeply believe that we are headed in the right direction, however I still want to see how the fall and winter months turn out before I become a true believer. There are a few factors that are impacting my decision. First, I am still interacting with a number of homeowners who are in financial trouble. Second, there is speculation that banks may end their moratorium on pursuing foreclosures. Third, we are currently in the traditionally busiest time of year for real estate activity in the Tri-Valley.

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