Mortgage Market Review

They say that no news is good news. But last week, several reports brought some surprising good news to the markets. Read on for details and what they mean for home loan rates.

There was good news on the labor front, as last weeks Initial Jobless Claims fell to 33 9,000, the lowest level in over four years. This news came on the heels of the surprising drop in the unemployment rate to 7.8% in September. This is encouraging news and could ease fears of slowing growth.

Also encouraging was the news from RealtyTrac that foreclosure activity declined to a five-year low in September, falling 7% from August and 16% from the same period last year. Housing has already improved substantially in certain parts of the country and this news bodes well for those states and areas that struggled with high foreclosure activity. Rounding out the week was some of the most surprising news of all: Consumer Sentiment surged to 83.1 in October, the highest level in five years.

Tempering this good news was a report from the International Monetary Fund (IMF), which said that the world economy will grow by 3.3% this year, the slowest since 2009. The IMF said that unless Europe and the U.S. address the financial threats to their resp ective economies, growth will continue to slow.

So what does all of this mean for home loan rates?

Remember that good economic news normally causes investors to move their money out of safer investments like Bondsincluding Mortgage Bonds, which home loan rates are based onand into riskier investments like Stocks to try and take advantage of gains. However, the Feds continued Mortgage Bond purchases as part of their third round of Quantitative Easing (QE3) and tame wholesale inflation data helped Bonds and home loan rates remain near record lows last week.

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all.

The Challenge of Closing

[dropcap character=”B” color=”red”]Buying or selling a home is like climbing Mount Everest – getting a signed contract is a great accomplishment after all of the processes before that, including having a property evaluator view your home and actually listing it for sale. Yet that’s only half the journey. The typical home transaction today involves more than 20 steps after the initial contract is accepted to complete the transaction.

“Closing” transfers the title of the property from the seller to the buyer. The buyer receives the keys and the seller receives payment for the home, minus money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed, and filed with local property record offices.

The good news is that much of what needs to be done before the closing is the responsibility of appraisers, loan processors, attorneys, and inspectors – and it’s your Bella Casa realtor’s role is to coordinate those responsibilities. You agent will help ensure that others do their jobs promptly and correctly and that the closing isn’t jeopardized.

Bella Casa realtors have extensive experience in handling problems that may arise during the time between contract and closing; they can anticipate difficulties and address them in time to ensure a smooth settlement for all involved.

When things go wrong, closing can easily fall behind. Here’s how much time to expect on particular delays:

One-Week Delays

  • Buyer submits incorrect information to lender
  • Source of down-payment changes
  • Escrow fails to notify parties about missing documents
  • Principals leave town without signing all necessary papers
  • Unknown defects are discovered in the property
  • Last-minute liens discovered
  • Cloud on title
  • Move-out date changes

Two-Week Delays

  • Lender decides at the last minute it doesn’t approve of the borrower or the property
  • Lender raises interest rates
  • Lender requires last minute reappraisal or repairs
  • Appraisal too low

 

Published on: Oct 12, 2012

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Willamina, Or 97396

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KitchenLiving room

Master Bedroom

Master bathroom

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FEATURED LISTING – 39715 Fort Hill Rd, Willamina

39715 Fort Hill Rd

Willamina, Or 97396

Gorgeous Custom Home Approximately 4,500 Sq.Ft.with 6 Bedrooms, 3.5 Bath, master bedroom on the main floor, vaulted ceilings, hardwood floors, Custom hickory cabinets, Great Room with Wet Bar, Island & Stained Concrete Floors with Radiant Heat, 1,000 Square Foot Trex Deck with view, Matching shop with RV storage, Matching custom-built playhouse, 5,000 square foot barn & so much more.

6 bedrooms

3.5  bathrooms

4468 sq feet

MLS#12678873

$569,900

For more information and for a personal showing please call the McCreith team @ 503-310-9844

KitchenLiving room

Master Bedroom

Master bathroom

Family room

Back Yard.

September Jobs Report Released – What do the Numbers Mean?

Last week, the Jobs Report for September was released, but the numbers may not be as clear as they seem. Read on for details and what they mean for home loan rates.

The Labor Departments Jobs Report showed that 114,000 new jobs were created in September, with 104,000 private sector job gains and 10,000 government job gains. While this number was lower than expectations, the job numbers for July and August were revised much higher.

But perhaps the biggest news in the report is that the unemployment rate came in at 7.8%, falling by a whopping 0.3% from Augusts 8.1% reading. This represents the lowest unemployment rate since January 2009. And while that is good news, its even more important to look at the Labor Force Participation Rate (LFPR).

The LFPR did improve by 0.1% to 63.6%, but it remains near thirty-one year lows! The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or not. The ratio of people “participating” or working is then compared to the total population.

On balance, Septembers Jobs Report confirms that our economy is producing 125,000 to 140,000 jobs per month. While that may sound good, those numbers are not high enough to keep up with immigration and popu lation growth. The ongoing weakness in the labor market is one of the major reasons why the Fed announced another round of Bond buying (known as Quantitative Easing or QE3) on September 13, saying they will provide this stimulus to our economy until the labor market is well into recovery.

So what does all of this mean for home loan rates? Another reason the Fed enacted QE3and they are buying such large amounts of Mortgage Bonds each monthis to keep home loan rates (which are tied to Mortgage Bonds) near record lows. The Fed hopes this will help strengthen our housing market and economy overall. However, as the labor market and economy start to improve and if inflation heats up, Bonds could face some selling pressurewhich could impact home loan rates negatively as a result.

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Smart Options: Kitchen Flooring

By: John Riha

Published: September 16, 2009 via houselogic.com

Choose kitchen flooring that marries your priorities–durability, sustainability, low maintenance, or an open floor plan–with the options. You’ll need a solid plan in place to make sure that when the new flooring is placed there are no remnants of your old floor left behind. To make sure they are out of your home and disposed of correctly, you may want to contact a rubbish removal st kilda service or a service that is closer to your home renovation, so you can have everything cleared away quickly.

Chef’s choice: Comfort and low maintenance

Top-quality sheet vinyl flooring is ideal for busy cooks. It’s a snap to clean up, plus it’s completely waterproof and stain-proof. There are few seams to trap dirt or let moisture through to the subfloor, and installations for kitchens less than 12 feet wide (the width of standard sheet vinyl) are seamless. Sheet vinyl requires no ongoing maintenance, so you can spend more time cooking.

Sheet vinyl belongs to a group of flooring products called resilient flooring, which have flexibility and are slightly soft under foot. This characteristic eases muscle fatigue-a plus if you spend a lot of time in your kitchen. Also, resilient floorings are much more forgiving of accidentally dropped glasses and bowls.

Then there’s cushioned vinyl, which is backed with a layer of foam-regular sheet vinyl uses felt backing-providing an extra measure of comfort. But its added thickness and flexibility make it difficult to create seams that stay tightly bonded over time. When your flooring dealer measures your kitchen, be sure to ask if your configuration requires seams. If the answer is yes, consider regular felt-backed vinyl. This is because, in the event that you hire home maintenance service providers such as Prefix Inc. and similar others for your home, this flooring plan can prove to be beneficial.

You’ll find sheet vinyl flooring in many of colors and patterns. Thicker vinyl can feature a textured surface, and some types do an excellent job of mimicking the appearance of ceramic tile and real stone. Textured vinyl provides traction and is a good idea for kitchens where floor surfaces occasionally get wet.

Vinyl flooring includes a “wear layer” on its top surface that helps resist scratches and scuff marks. The trade-off for low maintenance is that the wear layer eventually dulls and you’ll likely want to replace it. The best brands offer guarantees on the wear layer of 10-15 years, but good quality vinyl should last 20 years. While opting for such floor installation, it’s best to contact reputed service providers like the ones at Milwaukee Flooring Installation. Else, you could ask your close contact and check if they have any references that they can help you with.

Cost: At $1 to $5 per sq.ft., sheet vinyl is one of the least expensive options for kitchen flooring. Installation adds $1 to $2 per sq.ft., depending on the complexity of the project. For a 12 x 16 foot kitchen, you’ll spend about $1,000. In general, the thicker the vinyl, the higher the quality and the cost of the product. It’s widely available at home improvement centers and flooring stores.

When durability is important

Porcelain flooring tile, a version of common ceramic tile, is the durability champ. It’s fired at high temperatures that produce an extremely hard, durable, stain-resistant tile impervious to moisture. In fact, it’s so tough it can be used outdoors in virtually any climate.

Like common ceramic tile, porcelain tile comes either unglazed or glazed. The unglazed versions take on the color of their clay mixture, so they have naturally earthy tones. Glazed tiles have a glass-like coating that can be made in virtually any color, and can mimic the look and texture of real stone at a much lower cost than stone. For kitchens, choose porcelain tiles certified as slip-resistant by the Americans with Disabilities Act-the designation should be visible on product literature or packing materials.

Cost: Averages from $1 to $20 per sq.ft.; installation, $5 to $10 per sq.ft. Porcelain tile is widely available at home improvement centers and flooring stores.

The green kitchen flooring options

Cork is made from tree bark that’s harvested every eight to 10 years; it’s a sustainable material, meaning the bark grows back and can be harvested repeatedly. Countries that produce cork are careful to regulate harvesting practices to ensure future supplies.

Cork has a unique cellular structure that’s waterproof and compressible, which makes it a comfortable, moisture-resistant choice. It comes in 12 x 12-inch tiles and 1 x 3-foot planks, each with a unique grain pattern of swirls and speckles. The surface is naturally textured, so cork is slip-resistant as well.

Most cork flooring products come pre-finished. However, they should be resealed every 3 to 4 years to help guard against scratches and prevent moisture from entering the seams between tiles. Both natural wax and polyurethane are good sealers for cork. Choose water-based polyurethane that’s non-toxic or has low volatile organic compound content.

Cost: $2-$6 per sq.ft.; installation, $5-$10 per sq.ft.

Hardwood unites an open floor plan

Hardwood flooring, with its unmatched warmth and visual appeal, is a great choice if you have an open floor plan and prefer a single flooring style that creates visual continuity beyond the kitchen. In the kitchen, hardwood provides durability and low-maintenance. Prefinished hardwood is moisture-resistant, although spills should be wiped up immediately.

Hardwood flooring is either solid wood strips or engineered wood planks. Engineered wood has a veneer of real wood backed by layers of less expensive plywood. This construction provides dimensional stability that makes the flooring less susceptible to movement caused by changes in humidity and temperature-a good idea for kitchens. If this is the option you decide to go with, you can get in touch with professionals providing floor refinishing chicago services (depending on where you live) like Improvix Hardwood Flooring.

Increasingly popular bamboo, like hardwood, is glued together to form solid strips or engineered planks. But technically it isn’t a hardwood, it’s a grass. Bamboo is tough, durable, and green. It can be re-grown quickly and easily. If the environment is a factor in your choice of bamboo flooring, look for products made without urea formaldehyde glues. Costs are comparable to hardwood.

Cost: $3-$8 per sq.ft., although exotic varieties of wood may run as high as $12 per sq.ft. Installation, $5-$12 per sq.ft., depending on the complexity of the job.

Mortgage Lending News

A Gross Domestic Product. And last week’s final reading of GDP for the second quarter was far from pretty. Read on to learn why this matters and how home loan rates are faring.

Last week, the final reading of GDP for the second quarter was reported at an anemic 1.3%. This was after a sizable downward revision to previous estimatesand this is significant because GDP is the broadest measure of economic activity. In addition, Durable Goods Orders (i.e. orders for products like furniture and computers that are designed to last for an extended period of time) came in shockingly low. Figures like these speak to the improvement needed in our economy, and are a big reason why the Fed announced its latest round of Bond buying (known as Quantitative Easing or QE3) on September 13.

There was some surprisingly good news last week, as Initial Jobless Claims came in at 359,000, much better than expected and the best reading since late July. One of the main objectives of QE3 is to promote job growth, which is essential for our economy to grow. Time will tell if QE3 and this money injection into the economy will spark economic growth and lower unemployment, or if it will devalue the U.S. Dollar, raise commodity and asset prices like Stocks, and heighten inflation fears.

So what does all of this mean for home loan rates? Inflation is the arch enemy of Bonds and home loan rates because it reduces the value of fixed investments like Bonds. If inflation does creep into the economy, this could have a negative impact on Bonds and home loan rates in the coming months.

On the flip side of that, negative economic news like the GDP Report and Durable Goods Orders often causes investors to move their money out of risky investments like Stocks and into safer investments like Bonds, including Mortgage Bonds (which home loan rates are based on). That’s why home loan rates often improve when our economy is struggling. In addition, investors also tend to move their money into safe investments like our Bonds during times of global uncertainty, such as last weeks strikes in Greece and riots in Spain. These two factors and the Feds QE3 Mortgage Bond purchases are the main reasons that Bonds and home loan rates have improved of late.

The bottom line is that home loan rates remain near historic lows, meaning now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.