Apr 4, 2012 | Federal Reserve
The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Mortgage rates in Worcester County area are rising on the news.
For the un-indoctrinated, 3 weeks after it meets, the Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes.
Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.
The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication from the FOMC — its post-meeting press release — tends to span 6 paragraphs or less.
The extra detail contained within the Fed Minutes is Wall Street fodder, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.
Lately, the minutes has made an out-sized impact on mortgage rates. The Fed’s words continue to swing the mortgage-backed bond market.
Today is no different.
March’s Fed Minutes is a dense one and markets are reacting. (more…)
Apr 3, 2012 | Mortgage Guidelines
Planning to use an FHA-backed mortgage for your next home loan? You might want to get your application in gear today.
Beginning next week, the Federal Housing Administration (FHA) is changing the way it charges mortgage insurance to U.S. homeowners. For the fourth time since 2010, FHA mortgage insurance premiums are rising for all FHA-backed homeowners.
For FHA Case Numbers assigned on, or after, Monday, April 9, 2012, there are two planned changes.
First, FHA Upfront Mortgage Insurance Premiums (UFMIP) will increase by 75 basis points to 1.75%, or $1,750 per $100,000 borrowed. Upfront Mortgage Insurance Premium is paid at closing, and typically added to an FHA borrower’s loan size.
The current UFMIP rate is 1.000 percent.
Second, annual FHA mortgage insurance premiums are rising. All new FHA-backed loans will be subject to a 10 basis point increase in annual mortgage insurance premiums, costing homeowners an (more…)
Mar 30, 2012 | Mortgage Rates
After a brief run-up two weeks ago, mortgage rates are back below 4 percent. It’s good news for home buyers and mortgage rate shoppers of Worcester County area because with lower mortgage rates come lower mortgage payments.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage rate fell to 3.99 percent this week from last week’s 4.08 percent.
Last week had marked the first time since December 2011 that the benchmark rate crossed north of 4 percent — a span of 16 weeks.
And, it wasn’t just rates that got cheaper this week — closing costs dropped, too.
Freddie Mac’s survey showed that the average number of discount points to accompany a 30-year fixed rate mortgage fell one-tenth of a percent this week to 0.7, where one discount point is equal to one percent of your loan size.
As a real-life example, a $200,000 mortgage with an accompanying 0.7 discount (more…)
Mar 29, 2012 | Housing Analysis
Recent data suggests that the U.S. housing market is in recovery. However, the data also shows this to be an uneven recovery.
According to the monthly S&P/Case-Shiller Index, for example, home values rose in three of 20 tracked markets between December 2011 and January 2012. 17 tracked markets showed home prices still in decline.
It’s easy to point to the Case-Shiller Index as evidence that the housing market in Massachusetts has yet to bottom, but we have to consider the Case-Shiller Index’s shortcomings — specifically in a recovering economy.
For example, the Case-Shiller Index is based on changes in home prices of a single home, through successive sales. This means that to calculate its home price index, the Case-Shiller searches for sales of the same home over a period of time and calculates the difference in contract price.
This methodology can distort the home price tracker downward during times (more…)
Mar 28, 2012 | Housing Analysis
The housing market took a step back in February, but remains near post-recession highs.
According to data from the National Association of REALTORS®, February’s Pending Home Sales Index slipped 0.5 percent from the month prior, to 96.5.
The Pending Home Sales Index is a monthly report which measures the number of homes under contract to sell, but not yet sold, nationwide.
The index is benchmarked to a value of 100, the average level of home contract activity in 2001, the first year that pending home sales data was analyzed. It also happened to be a year of historically-high levels of home contract activity. Therefore, a Pending Home Sales Index reading of 100 suggests a strong housing market nationwide.
The index has read north of 90 since October 2011.
On a regional basis, February’s Pending Home Sales Index varied :
- Northeast Region: -0.5 percent from January 2012
- Midwest Region : +5.7 percent from January 2012
- South Region : -3.3 percent from January 2012
- West Region : -2.6 percent from January 2012
Mild weather may have helped the Midwest Region last month but even regional data can only tell us so much. Like everything in real estate, housing data must (more…)
