CURRENT MORTGAGE RATES AT 4.22% AND ARE PREDICTED TO GO A BIT LOWER!

To All My Readers: Interest rates continue to be at an all time low due to our sluggish economy and feds reluctance to in any way put in danger the recovering housing market. While interest rates have ticked up a bit from last year, they are still at historically low levels. Just to give younger readers some perspective, when I graduated from college in the 1980’s the interest rate on a 30 year fixed mortgage was over 9%. Needless to say i had to buy a smaller house than I wanted to because of what the interest rate did to my monthly mortgage payment. If you are a young person my advice is to buy now before the rates tick up again, and buy bigger than what you think you need for additional room as your family grows. I had no one to advise me, and after I bought my first home my wife became pregnant and the house I just bought was already to small. Thus we had to go through the process all again, this time finding a bigger home until number 4 came along and then that home was too small as well! Set your sights on a 4 bedroom, 2 or 3 bath home and you should be okay. As always, feel free to call me Richard Kemper at 813-777-5332 with any of your real estate questions.        

Average rate on 30-year mortgage at 4.22%

 

Mortgage Rate Trend Index

Half the experts (50%) polled this week by Bankrate.com expect little rate change over the short term. However, only 8% foresee an increase; the remaining 42% predict additional decreases.

WASHINGTON (AP) – Nov. 22, 2013 – Average U.S. rates on fixed mortgages declined this week after two weeks of increases, keeping home buying affordable.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.22 percent from to 4.35 percent last week. The average on the 15-year fixed mortgage dipped to 3.27 percent from 3.35 percent.

Rates had spiked over the summer and reached a two-year high in July on speculation that the Federal Reserve would slow its bond purchases later this year. But the Fed held off in September and now appears poised to wait at least a few more months to see how the economy performs. The bond purchases are intended to keep long-term interest rates low.

Mortgage rates tend to follow the yield on the 10-year Treasury note. They have stabilized since September and remain low by historical standards.

Still, mortgage rates are nearly a full percentage point higher than in the spring. The uptick has contributed to a slowdown in home sales. The National Association of Realtors said sales of existing homes fell 3.2 percent in October, the second straight monthly decline.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage held at 2.61 percent. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 2.95 percent from 3.01 percent. The fee rose to 0.5 point from 0.4 point.

Copyright © 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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IS THE MARKET COOLING? 11/18/13

I don’t believe there is any reason for alarm, but yes I have noticed the cooling off here in the Brandon, FL area. It is very interesting to look back and see what has happened. The market was soft going into spring, but then investor traffic drove prices up as inventory levels were low. The investor traffic has died down, but due to low inventory levels prices have not dropped. We will have to see what happens over the next few months.Read below for various reasons for slowing market.

Buying frenzy starting to cool?
NEW YORK – Nov. 18, 2013 – Bidding wars in recent months have fueled large gains in home values in some parts of the country. But bidding wars and the buying frenzy seen just a few months ago seem to be cooling at a time when housing affordability has been reduced due to higher mortgage rates and home prices.

“The bidding wars were creating a false market,” homebuyer Mike Imgarten told Bloomberg about his two-month house hunt in Sacramento, Calif., area. “Now is a good time to jump back in and see where we’re at.”

Inventories have risen in many markets, leaving homebuyers with more options. The National Association of Realtors® reported that inventory levels of unsold homes rose in September from a year earlier – the first time since 2011.

More homeowners are seeing the return of equity (more than 2.5 million homes saw positive equity return in the second quarter alone), which has prompted more people to list their properties.

“We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” says Ellen Haberle, an economist for the real estate brokerage, Redfin.

Home sales typically slow during this time of year, but some analysts say the seasonal drop-off has been higher than expected. They blame the increase in mortgage rates for a lot of that drop-off. Since May, mortgage rates have risen a full percentage point, which has led to an increase in borrowing costs that is holding some buyers back, housing experts say.

The government shutdown also has weakened consumer confidence, says Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.

“The frenzy has died down,” says Selma Hepp, a senior economist for the California Association of Realtors. “The question in the summer of this year was, ‘is this sustainable, or is this a bubble again?’ Now the data is showing that we’re returning to more of a traditional market.”

Source: “Bid Wars Wane in U.S. Housing Markets on Supply Rise: Mortgages,” Bloomberg Businessweek (Nov. 14, 2013)

IF YOU ARE IN THE MILITARY YOU SHOULD READ THIS

I live in a community, Fishhawk Ranch located in Lithia, Fl, with a large military presence and I know they depend on their BAH allowance to help them out. Let’s hope something is done before 2015 as these people put their lives on the line to protect us and our country.

Military families fear housing allowance is at risk
WASHINGTON – Nov. 8, 2013 – Sequestration could mean a $20 billion loss of defense funding for fiscal 2014 and possibly include a reduction in the allowance military families receive to help them pay for shelter.

Many military households apply their housing allowance to home buying or renting. The amount of an allowance varies according to geographic location, rank and other factors; and it’s adjusted annually to reflect local housing costs.

The idea of lower military allowances has already been floated. This summer, Secretary of Defense Chuck Hagel planted the idea of “changing how the basic allowance for housing is calculated, so that individuals are asked to pay a little more of their own housing costs.”

However, no major housing allowance changes are expected for fiscal year 2014, though the numbers have not yet been announced. Still, industry representatives are bracing themselves and asking enlisted families to do the same.

Elysia Stobbe of Jacksonville, Fla.-based VanDyk Mortgage, for example, says she is encouraging military customers to think about how any changes could “affect their income and ability to pay their mortgage in the future.”

Paula Cino of the National Multi Housing Council, meanwhile, is hoping that the government will keep everyone abreast of its plans so that there are no unexpected surprises. “The sooner that we really understand what the potential changes can be, the better we can respond and mitigate any damage to the program moving forward,” she said.

Source: Wall Street Journal (11/07/13) Wotapka, Dawn

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

MORE BANKS NOW OFFERING 5% DOWN CONVENTIONAL LOANS!

I still get comments from time to time from people who believe it is still really had to get a loan. If you are one of those people read on and you will be pleasantly surprised. If you need help finding a good lender in the Tampa area give me a call at 813-777-5332 and I will put you in touch with my broker. Richard Kemper RE/MAX Realty Unlimited

 

More banks offering loans for 5% down?

NEW YORK – Nov. 7, 2013 – For the last few years, buyers have been hard-pressed to land a mortgage if they didn’t have a 20 percent down payment, unless they turned to the Federal Housing Administration’s (FHA) low down-payment loans.

But a growing number of banks now offer loans with just 5 percent down, CNNMoney reports. For example, Bank of America, Wells Fargo and TD Bank are among the lenders reportedly offering mortgages with down payments as low as 5 percent.

TD Bank is offering a “Right Step” loan product that allows borrowers to get a loan with a 5 percent down payment while also allowing borrowers to get up to 2 percent of the sales price as a gift from a relative or third party. In actuality, then, borrowers would only need to come up with a 3 percent downpayment themselves.

Banks offering 5 percent down payment loans, however, also require borrowers to buy private mortgage insurance (PMI). Borrowers must keep PMI until they build up 20 percent equity in the home.

Source: “Banks Offering Mortgages with Only 5% Down Payments,” CNNMoney (Nov. 5, 2013)

PENDING HOME SALES DECLINE FOR 4TH MONTH IN A ROW SEPTEMBER 2013

Wow, this is not good news for a recovering Tampa housing market. The investors came in about a year or so and stabilized the Tampa market and helped us get our prices back to what they should be. But, the investors have slowed purchases in Tampa as they move on to cheaper markets, there was a 1%+ interest rate jump (which has now gone back down), 3 price increases by new construction builders in Tampa area, a government shut down, Obamacare, etc., which I think has some buyers heading back to the sidelines to wait it out and wait for some of the uncertainty to settle. I think key to the slower pending sales is price. I think home prices went up too quick which may make some people wait it out to see if prices are going to drop. No one wants to buy a home that is going to go down in value right after they bought it. That’s how we ended up with all the short sales after the housing market crash of 2007. Stay tuned to my blog to see how the Tampa real estate market is doing. Richard Kemper Re/Max Realty Unlimited 813-777-5332

Pending home sales continue slide in Sept.

WASHINGTON – Oct. 28, 2013 – Pending home sales declined for the fourth consecutive month in September. According to the National Association of Realtors® (NAR), higher mortgage interest rates and higher home prices curbed buying power.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August. Year-over-year, the index is down 1.2 percent compared to September 2012.

The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” says Lawrence Yun, NAR chief economist. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

September marks the first time in 29 months that pending home sales weren’t above year-ago levels.

“This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014,” says Yum. “Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year.”

The PHSI in the Northeast dropped 9.6 percent to 76.7 in September, and 6.4 percent below a year ago. In the Midwest, the index fell 8.3 percent to 102.3 in September, but it’s 5.7 percent higher than September 2012.

Pending home sales in the South slipped 0.4 percent to an index of 116.2 in September, but it’s 2.0 percent above a year ago. The index in the West dropped 9.0 percent in September to 97.3 and 9.8 percent lower than September 2012.

NAR projects that total existing-home sales this year will be 10 percent higher than 2012, reaching more than 5.1 million, and will likely hold even in 2014. The national median existing-home price is expected to rise 11 to 11.5 percent for all of 2013, but moderate to a 5 to 6 percent gain in 2014.

© 2013 Florida Realtors®

MORTGAGE LENDERS NOW REQUIRE SMALLER DOWNPAYMENTS FOR HOME LOANS!

 

I just wanted to get this out there for all of you who read my blog. Feel free to share it with your friends and family as this topic comes up on a regular basis with people I run into. It also lets us know the banking industry as well as the housing markets are improving. Lenders tightened up lending requirements following the 2007 housing crash because prices continued to slide and they didn’t want to have people walking away from new home purchases if the market continued it’s downward spiral. As home prices have increased and leveled off, lenders feel more confident that prices are stable and rising so they have relaxed requirements a bit. Underwriting, however hasn’t relaxed it’s rules, they are in fact more stringent than they use to be and ask for verification on EVERYTHING!           

 

More home loans require smaller downpayments

 

WASHINGTON – Oct. 24, 2013 – More people are getting home loans with lower credit scores and smaller downpayments.

Last month, the average FICO score for a closed home loan was 732, down from 750 a year ago, shows data from mortgage tracker Ellie Mae.

The average downpayment was 19 percent, vs. 22 percent a year ago. What’s more, almost one-third of closed loans had FICO scores under 700, vs. 17 percent a year ago. The top FICO score is 850.

“We continue to see things open up ever so slightly month by month,” says Jonathan Corr, Ellie Mae president.

The standards to get a home loan remain tight, mortgage experts say. But lenders are reducing some restrictions as housing prices recover and as higher interest rates curtail their refinance business.

“We’re starting to see some of the banks … get more creative … to drive more volume to the door,” says Jeff Taylor, managing partner at mortgage analytics firm Digital Risk.

Earlier this month, Bank of America dropped its minimum downpayment requirement for non-conforming loans under $1 million to 15 percent from 20 percent. Non-conforming loans, which can’t be sold to Fannie Mae or Freddie Mac, are over $417,000 in most parts of the country.

Wells Fargo also reduced non-conforming loan minimum downpayments to 15 percent from 20 percent in July.

JPMorgan Chase, meanwhile, reduced downpayment requirements in Arizona, Florida, Nevada and Michigan – states that were especially hard hit by foreclosures. The bank’s minimum downpayment is now 5 percent, down from 10 percent, for primary homes and 10 percent, instead of 20 percent for second homes in those states. The change brings downpayment requirements in those states in line with others, says JPMorgan spokeswoman Amy Bonitatibus.

“These markets have shown strong signs of improvement,” Bonitatibus says. Improving home values lessen risk for lenders.

JPMorgan and Wells made their changes in July after a sharp interest rate spike in May cut into the refinance business.

While banks are easing some loan requirements, home lending standards remain tight and will likely stay there, says Cameron Findlay, economist at Discover Home Loans.

New lending rules expected to take hold in January require lenders to make home loans that meet federal standards or face greater liability from borrower lawsuits should the loans go sour. Findlay doesn’t expect lenders to do many loans that fall outside of those standards.

“We’re seeing tweaking of the underwriting standards, but it’s not a wholesale loosening,” says Guy Cecala, publisher of Inside Mortgage Finance. “The pendulum is still too far toward restrictive.”

Copyright © 2013 USA TODAY, Julie Schmit