Sunrise Homes & Renovations, Inc.

Existing Home Sales Fall More Than Expected

by

Existing Home Sales Fall More Than Expected

Sales of previously owned homes reached 5.36 million sales on a seasonally adjusted annual basis and fell by 3.40 percent in October according to the National Association of Realtors®. Rising home prices and a shortage of available homes strained housing markets. Concerns over potentially higher mortgage rates may have sidelined home buyers as concerns over an anticipated rate hike by the Federal Reserve persisted. Many analysts expect the Federal Reserve to raise rates at its December meeting of the Federal Open Market Committee, which oversees the Fed’s monetary policy. Raising the target federal funds rate would cause consumer interest rates and mortgage rates to increase as well.

Shortage of Available Homes Could Lead to “Inventory Crunch” Next Spring

Lawrence Yun, Chief Economist for the National Association of Realtors®, cited concerns over the shortage of homes for sale. He said that a persisting shortage of available homes could lead to an inventory crunch during next spring’s peak selling season.

Home prices increased by 5.80 percent year over year to an average of $219.600. Rising home prices impacted decreasing sales in the West and South while home sales held steady in the Northeast, where home price growth was the slowest.

First-time Home Buyers Lag in Home Purchase Numbers

Although first-time buyers represented 31 percent of home buyers in October, which was a two percent increase over September’s participation, first-time home buyers usually represent approximately 40 percent of buyers of existing homes. First-time buyers are important to housing markets as they generate sales of homes by homeowners wishing to move up or relocate.

First-time buyers can be adversely affected by home prices and mortgage rates; a shortage of first-time buyers could create further slowdowns in home sales. There is good news due to steady job growth, which is important to those who are considering buying a home. Strict mortgage credit requirements are showing signs of relaxing and home builders are encouraged by current and future housing market conditions.

The National Association of Realtors® forecasts that 2015 sales of pre-owned homes at a level of 5.3 million sales, which would be the highest sales rate since 2007. Sales of existing homes are expected to rise by 3 percent in 2016, but mortgage rates and affordability will continue to influence actual sales and overall health of housing markets in the New Year.

What’s Ahead For Mortgage Rates This Week – November 16, 2015

by

The Fibromyalgia Diet: Healthy Eating Ideas That Could Help You Feel BetterLast week’s scheduled economic news was sparse due to no scheduled releases on Monday and the Veterans Day Holiday on Wednesday. A report on job openings was released on Thursday along with regularly scheduled weekly reports on jobless claims and Freddie Mac’s report on mortgage rates.

Mortgage Rates, Weekly Jobless Claims Rise

Mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose to 3.98 percent from last week’s reading of 3.87 percent. The average rate for a 15-year fixed rate mortgage rose to 3.20 percent from the prior week’s reading of 3.09 percent; the average rate for a 5/1 adjustable rate mortgage was also higher at an average of 3.03 percent as compared to the prior week’s average rate of 2.96 percent. Discount points were unchanged for all three types of mortgages at 0.60 percent for fixed rate mortgages and 0.40 for 5/1 adjustable rate mortgages.

New jobless claims rose last week to 276,000 claims filed against the expected reading of 268,000 new claims and the prior week’s reading of 276,000 new jobless claims filed. The Labor department reported 5.53 million job openings on September, which was the second highest reading since the inception of the job openings report in 2000.

The Labor Department also reported that the quits rate held steady at 1.90 percent for the sixth consecutive month. Fed Chair Janet Yellen has said that the Fed considers the quits rate an indicator of economic strength; if workers have enough confidence to quit their jobs for new jobs, this a strong economy. The quits rate has held steady for six months, which could signal to the Fed that the economy is not yet ready for a rise in interest rates that analysts expect to occur in December.

U.S. News recently cautioned that a combination of rising home prices and interest rates could quickly cool housing markets as first-time and moderate income buyers are priced out of the market and other would-be buyers find it difficult to qualify for the mortgages they need to finance home purchases. Recent hikes in mortgage rates are a likely response to the anticipated Fed rate hike in December.

What’s Ahead

Next week’s scheduled economic reports include the National Association of Home Builders Housing Market Index, Housing Starts and minutes from the most recent meeting of the Fed’s Federal Open Market Committee. The minutes may provide additional insight into how Fed policymakers are approaching the decision about raising the target federal funds rate.

What’s Ahead For Mortgage Rates This Week – November 2, 2015

by

Whats Ahead For Mortgage Rates This Week November 2 2015A number of economic reports released last week indicate mixed economic progress. The 20-City Home Price Index released by S&P Case Shiller showed that August home prices rose, but New Home Sales dropped in September. The Federal Open Market Committee of the Federal Reserve indicated that it may reserve the target federal funds range at its next meeting in December.

Case-Shiller Reports Higher Home Prices in August

August’s 20-City Home Price Index issued by S&P Case Shiller showed that average home prices rose in 18 of 20 cities with Denver, Colorado and San Francisco, California posting year-over-year increases of 10.70 percent. Portland, Oregon closely followed with a year-over-year gain of 9.40 percent. Cities lagging in home price gains were Chicago, Illinois and Washington, D.C. with year-over-year gains of 1.90 percent and New York City with a year-over-year gain of 1.80 percent.

Higher home prices were seen by analysts as contributing to a lag in New Home Sales in September. The Commerce Department reported that pending home sales dropped by -2.30 percent as compared to August’s reading of -1.40 percent. Fewer home sales in September were consistent with the winding-down of the peak spring and summer home buying season, but analysts cited higher home prices and concerns about cooling economic trends as factors contributing to slowing home sales.

Federal Reserve Hints at December Rate Hike

Economists and media have been trying to predict when the Federal Reserve will raise its target federal funds range, which is currently set at 0.00 to 0.25 percent. The Federal Open Market Committee of the Fed indicated in its post-meeting statement that rates could be raised in December, when the committee meets for the final time in 2015. While no specifics were given, eyes and ears will be paying close attention for precursors of a December rate hike. When the Fed does raise rates, mortgage rates and other consumer lending rates can be expected to increase as well.

October Consumer Sentiment decreased to a reading of 97.6 as compared to an expected reading of 101.6 and September’s reading of 102.6; this suggests that consumers are increasingly wary of economic conditions as well as potentially higher interest rates.

Mortgage Rates Mixed, Jobless Claims Rise

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage fell by three basis points to 3.76 percent. Discount points were unchanged at an average of 0.60 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 2.98 percent. The average rate for a 5/1 adjustable rate mortgage was also unchanged at 2.89 percent. Average discount points were 0.60 for fixed rate mortgages and 0.40 percent for a 5/1 adjustable rate mortgage.

Jobless claims were slightly higher with a reading of 260,000 new claims filed against expectations of 265,000 new claims and last week’s reading of 259,000 new claims filed.

What’s Ahead

This week’s scheduled economic reports include reports on Construction Spending, ADP Payrolls, the Non-Farm Payrolls report and the National Unemployment report. These reports are will provide information related to general economic conditions and labor trends.

What’s Ahead For Mortgage Rates This Week – October 26, 2015

by

Whats Ahead For Mortgage Rates This Week October 26 2015Last week’s economic news included the National Association of Home Builders Index, Housing Starts and FHFA’s report on August home sales. The National Association of Realtors® released its monthly report on sales of previously owned homes.

Builder Confidence and Housing Starts Post Gains

The Wells Fargo National Association of Home Builders Housing Market Index for September posted its highest level of builder confidence in 10 years a higher than expected results with a reading of 64 for October. Analysts expected a reading of 62 based on September’s reading of 61.

The NAHB Wells Fargo Housing Market Index reading is based on three builder confidence readings. Builder confidence in current market conditions rose three points to a reading of 70; builder confidence in housing market conditions over the next six months rose seven points to 75 and buyer traffic in new housing developments held steady with a reading of 47. Any reading over 50 indicates that more builders are confident about market conditions than those who are not.

This news was consistent with September housing starts, which were also higher. The U.S. Commerce Department reported September’s housing starts at an annual level of 1.206 million starts against expectations of 1.139 million starts and August’s reading of 1.132 million housing starts.

Sales of Previously Owned Homes Surpass Expectations

September sales of pre-owned homes surpassed expectations according to a report released by the National Association of Realtors®. Sales of previously owned homes reached 5.55 million sales on a seasonally-adjusted annual basis against an expected reading of 5.34 million sales. August’s reading was adjusted downward from 5.31 million sales to 5.30 million sales of previously owned homes.

Lawrence Yun, Chief Economist for the National Association of Realtors®, cited lower mortgage rates, higher demand for homes and low inventories of available homes as driving higher sales. Slight easing of mortgage credit standards was also said to be driving home sales.

FHFA’s Home Price Index for August showed that home prices for properties associated with mortgages owned by Fannie Mae and Freddie Mac increased at a rate of 5.05 percent in August as compared to a growth rate of 5.80 percent year-over-year in August 2014.

Mortgage Rates Mixed, Weekly Jobless Claims Lower

Weekly reports on mortgage rates and jobless claims yielded mixed results. Freddie Mac reported that average rates for fixed rate mortgages dipped with the average rate for a 30-year fixed rate mortgage three basis points lower at 3.79 percent; the average rate for a 15-year fixed rate mortgage fell by five basis points to 2.98 percent. The average rate for a 5/1 adjustable rate mortgage ticked upward by one basis point to 2.89 percent. Average discount points were 0.60 percent for a 30-year fixed rate mortgage, 0.50 percent for a a5-year fixed rate mortgage and were unchanged at 0.40 percent for a 5/1 adjustable rate mortgage.

Weekly jobless claims were lower than expectations with a reading of 259,000 new claims filed against expectations of 265,000 new jobless claims. New claims were higher than the previous week’s reading of 256,000 new claims. Analysts are keeping an eye on jobs reports as stronger job markets are essential to expanding home sales.

What’s Ahead

This week’s scheduled economic news includes Case-Shiller reports on home prices along with reports on new home sales, consumer confidence and consumer sentiment. Core inflation readings will be released Friday after Thursday’s releases of Freddie Mac mortgage rates and weekly jobless claims.

What’s Ahead For Mortgage Rates This Week – October 13, 2015

by

Whats Ahead For Mortgage Rates This Week October 13 2015Last week’s economic reports included the Federal Open Market Committee Meeting Minutes and Weekly Jobless Claims. Also, the new mortgage TRID rules went into effect. Here are the details:

TRID (TILA-RESPA Integrated Disclosure) Goes Into Effect

TRID, or TILA-RESPA Integrated Disclosure, which is also known as the “Know Before You Owe” rule will change the mortgage process by altering some standard loan forms and practices. Originally slated to go into effect August 1, the Consumer Financial Protection Bureau (CFPB) actually took effect on October 3.

On Wednesday, October 7, 2015, the House of Representatives approved HR 3192, “The Homebuyers Assistance Act”, which would provide a safe harbor for lenders who act in good faith to comply with the new TRID mortgage disclosure requirements. The bill will still need to be passed by the US Senate and signed by the President in order to become law.

Home buyers can expect to be using two new forms under TRID — the Loan Estimate and the Closing Disclosure. These two new loan forms are easier to understand and consolidate the earlier standard forms. The forms are also designed to work in combination with each other, which wasn’t happening with the previous forms.

The new forms clearly detail the loan amount, its terms, whether the amount can increase after closing for each section, and the feature of the loan, such as whether there is an early payment penalty or not.

The forms are designed to provide the buyer with more time to review the costs associated with the mortgage. The Loan Estimate document is due to the buyer three days after applying for the loan, while the Closing Disclosure must be presented three days before closing.

The CFPB has offered a special guide for real estate professionals.

Real Estate Professionals Guide (http://www.consumerfinance.gov/know-before-you-owe/real-estate-professionals/)

Mortgage Rates Tick Downward

Freddie Mac reported that the average mortgage rate for a 30-year fixed rate mortgage dropped lower to 3.76 percent from 3.85 percent the previous week; the average rate for a 15-year fixed rate mortgage was also lower at 2.99 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at an average rate of 2.88 percent. Average discount points for both fixed rate products was.6 percent while the discount points for the adjustable product was.2 percent.

Jobless Claims Fall To 42-Year Low

New unemployment claims dropped to 263,000 against expectations of 271,000 new jobless claims and the prior week’s reading of 277,000 new jobless claims. Some experts argued that the drop may have had to due with seasonal employment trends. The U.S. labor-force participation rate was reported at a 38-year low at 62.4 percent in September.

What’s Ahead For Mortgage Rates This Week – September 21, 2015

by

Whats Ahead For Mortgage Rates This Week September 21 2015Last week’s economic releases included several reports related to housing. The Wells Fargo/NAHB Housing Market Index achieved its highest reading in nearly 10 years. Housing Starts dipped in August and Building Permits issued in August exceeded July expectations. The week’s big news was actually no news. The Fed’s Federal Open Market Committee decided not to raise interest rates. Fed Chair Janet Yellen followed up on the FOMC statement with a press conference and said that the Fed is not yet ready to raise rates, but that a majority of FOMC members are prepared to raise rates before year-end.

Inflation Rate Remains Well Below Fed Benchmark

The Federal Reserve has set a goal of reaching an inflation rate of 2.00 percent as one of several considerations for raising the target federal funds rate that currently stands at 0.00 percent to 0.250 percent. The Consumer Price Index for August fell from July’s reading of 0.10 percent to -0.10 percent in August. Lower prices were driven by lower fuel costs. The dip in consumer costs was the first since January.

The Core Consumer Price Index, which excludes volatile food and energy sectors, was unchanged at 0.10 percent in August, which matches analyst expectations and July’s reading.

NAHB: Home Builder Confidence Hits Highest Level in Nearly 10 Years

The Wells Fargo/NAHB Housing Market Index reached its highest reading since November 2005 with a one-point increase to a reading of 62 in September. Readings over 50 indicate that a majority of builders are confident about housing market conditions. September’s reading was the highest since November 2005, when the NAHB Housing Market Index achieved a reading of 68.

Housing Starts Lower, But Building Permits Rise

The Commerce Department reported that August housing starts fell to a seasonally-adjusted annual reading of 1.13 million starts against projections of 1.16 million starts and 1.16 million housing starts in July. Residential building permits were higher in August with a reading of 1.17 permits issued for residential construction and 1/13 million permits issued in July.

Mortgage Rates Rise

Freddie Mac reported that mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by one basis point to 3.91 percent. The average rate for a 15-year mortgage also rose by one basis point to 3.11 percent and the average rate for a 5/1 adjustable rate mortgage also rose by one basis point to 2.92 percent. Discount points averaged 0.60 got 30-year fixed rate mortgages, 0.70 percent for 15-year mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.

What’s Ahead 

Next week’s scheduled economic news includes reports on new and existing home sales, FHFA’s House Price Index, along with regularly scheduled weekly reports on new jobless claims and mortgage rates.