Smart Borrower Blog

Archive for the ‘Mortgage Rates’ Category

Parents Helping Kids Get Mortgage Loans

In these days of economic uncertainty, many potential homebuyers are asking their parents for help. Today buyers are facing the most stringent lending standards in decades as well as a shaky job market. They are often in need of a good chunk of change in order to qualify for a home purchase. According to a survey from Better Homes and Garden Real Estate as reported in a CNN Money article , one in five baby boomer couples have already helped at least one of their children buy a house. That help has come in the form of giving cash for... more »

Fed Hopes to Lower Interest Rates, But Will It Help?

In order to “support a stronger economy” and keep inflation at the right level, the Federal Reserve decided today to purchase bonds with longer maturities, while selling off its shorter-term bonds, in hopes that long-term interest rates will continue to fall. The Federal Open Market Committee announced that it will buy $400 billion worth of Treasury securities with maturities of six to 30 years, over the next eleven months. It will simultaneously sell off an equal amount of its Treasuries that mature within three years or less. “This program should put downward pressure on longer-term interest rates and help make... more »

Refinances Fuel Spike in Mortgage Activity

Even as more bad news on the economy came pouring in, mortgage loan applications continued to grow in number. According to the Mortgage Bankers Association, its market composite index, its measure of total loan application volume, increased 21.7 percent during the week ended August 10, from the previous week. Broken down into parts, a 30.4 percent increase in refinance loan applications was off-set slightly by a 0.9 percent decline in home purchase applications. “Amid substantial market turmoil last week, mortgage rates dropped to their lowest levels of the year, and refinance applications jumped more than 30% to their highest levels... more »

Mortgage Applications Continue to Fall Despite Low Rates

Even though mortgage interest rates keep falling, it has not been enough to increase U.S. mortgage applications. Total applications for refinance loans and home purchase loans dropped 5.1 percent in the past week, according to the Mortgage Bankers Association, marking the fourth consecutive weekly decrease. The number of home purchase requests, often a sign of future home sales, fell 2.6 percent in the past week. The unemployment outlook and tightened loan standards continue to be significant issues for many potential homebuyers. Says Celia Chen, a housing economist at Moody’s Analytics Inc as quoted in a Bloomberg article “Without stronger job... more »

Will We See Higher Interest Rates This Year?

The minutes from the Federal Open Market Committee April 26 – 27 meeting were released today, revealing that Federal Reserve officials have started talking about an exit policy for its aggressive market support measures. That means interest rates are bound to rise, but how soon can we expect a jump in rates? “While the Fed said they’re tussling internally, they’re certainly not ready to step on the accelerator,” with regards to raising interest rates, said Jim Meyer, chief investment officer at Tower Bridge Advisors in a Wall Street Journal article. “They didn’t really accelerate any timetable. When the Fed says... more »

Home Sales Down, NAR Blames Lending Standards

Sales of existing U.S. homes fell 9.6 percent in February, according to the National Association of Realtors, the first drop in three months. The NAR is pointing its finger at lenders’ strigent loan standards as the reason for the continued housing market woes. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” said Lawrence Yun NAR chief economist. “This tug and pull is... more »

Mortgage Applications Rise to Highest Pace in Three Months

The number of applications for mortgage loans bounced up to it highest level since December, according to data from the Mortgage Bankers Association. Based on its seasonally adjusted index of mortgage application movement, refinances and home purchase applications were collectively up 15.5 percent during the last week. The refinance index alone was up 17.2 percent, while the home purchase index also jumped by double digits – 12.5 percent. “An improving job market is beginning to pave the way for an improving housing market,” said Michael Fratantoni, MBA vice president of research and economics. “Additionally, mortgage interest rates remained below 5... more »

Demand Falls as Mortgage Rates Jump

Mortgage interest rates jumped up this week, according to the Mortgage Bankers Association , and as a result home loan applications took a dive, a sign that the housing market is not reviving on pace with the rest of the economy. The MBA reported that the average rate on a 30-year fixed rate mortgage broke the 5 percent barrier this week, moving up to 5.13 percent from 4.81 percent the week before. That is the highest rate in almost 10 months. As rates increased, demand for mortgages slowed with the MBA seasonally adjusted mortgage application index falling 5.5 percent. “Mortgage... more »

Mortgage Rates Rise Slightly and Housing Market Sees No Improvement

Just two weeks ago, mortgage rates were at their lowest since the housing crisis began. For a 30-year fixed mortgage, rates bottomed out at 4.17%. Rates are creeping up ever so slightly and Freddie Mac is reporting current 30-year fixed rates to be at 4.4%. 15-year rates are also up slightly, coming in this week at 3.77%. Last week, these rates were at 3.76%; two weeks ago, 15-year rates hit rock bottom at 3.57%. Even though rates are up slightly, they are still historically low and the housing market has declined once again. Home purchases were down again for the... more »

Three Years Away From A Housing Price Bottom?

I thought that economists were saying months ago that the housing market had already hit bottom and we were on the way back up. I guess they were wrong or the economists today are wrong, because new forecasts are predicting at least three more years of price declines before things start turning around. The problem seems to be excess inventory as well as shadow inventory, or home that are in foreclosure and will be on the market sometime in the near future. “Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said... more »