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Category Archive: ‘Interest Rates/Loan Limits’

Lowest Rates Since May


Dropping mortgage rates are likely to keep buyers interested – and maybe pay a little more to get it done? Jumbo 30Y rates can be had in the mid-3s!

From MND:

Mortgage rates had another great day, with most lenders maintaining or improving upon yesterday’s 4-month lows.  Given that we’d have to go back to May 8th, 2015 to see better rates, we’re very close to ‘5-month lows.’  In terms of top-tier conventional 30yr fixed rate quotes, 3.875% remains most prevalent.  A growing number of lenders are quoting 3.75% and only a few remain up at 4.0%.  Not all borrowers will see a change in their quoted rate over the past few days, but in those cases, the closing costs would be lower or the lender credit would be higher.

Although there was a reasonable chance that we’d see increased volatility in the markets that underlie mortgage rates today, trading remained calm and positive.  Stock prices and bond yields continued to diverge.  This could have something to do with the way investors approached the end of the month and quarter.  In other words, the volatility that was a risk today, could instead simply be waiting for the new month/quarter tomorrow.  In any event, Friday’s big jobs report always has the potential to send rates quickly in either direction.  While that does mean there could be further improvement for those willing to roll the dice on the economic data, it’s hard to argue against taking that risk off the table with rates near 5-month lows.

Posted by on Sep 30, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market | 1 comment

National Housing Policy

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I saw these questions from Ed DeMarco on Twitter. My answers:

1. Have the M.I.D. apply towards primary residence only (not second homes), and lower from $1,000,000 to $500,000.  Those buying in hopes of a bigger write off will still buy a house, and take the partial benefit – and be in it for the appreciation and to raise a family (make wifey happy).

2.  Have the mortgage interest deduction be in effect for the first ten years of ownership only.  It would encourage borrowers to pay off mortgages in the ten years, and not refinance every year.

3.  Require that only the buyers can pay for mortgage insurance (sellers can pay in full now).

4.  Redirect the disadvantaged folks to subsidized rentals until they aren’t disadvantaged. Only stable, secure, affluent people should buy a house – it’s too late for the rest, unless they drive to the suburbs/outer edge of town.

5.  There are several loan programs available to help the disadvantaged already.  NACA is still around, helping buyers purchase with no down payment and no closing costs (H/T daytrip):

6.  Lower the capital-gains tax for 1-2 years to incentivize those reluctant-but-motivated possible sellers to unload a rental property or two.  Cut federal rate to 10% for the first year (currently 20%), and then back to 15% in the second year.  The crotchety old guys still won’t sell, so there won’t be a flood.  But more inventory = more sales while stabilizing prices.

7.  Keep Fannie/Freddie the way they are for now. If they can keep operating in the black, let’s allow the mortgage industry to enjoy the fluidity. I attended a seminar today on the new loan disclosures coming on October 3rd, and it is clear that Fannie/Freddie will be extremely strict on compliance. It doesn’t mean tougher credit, it means the mortgage industry needs to submit the cleanest loan packages ever – which is good for the taxpayers.

8.  The new compliance crunch will virtually eliminate mortgage brokers – wholesale lenders won’t want to take a chance on them. Yes, we still have room for you over here to be a realtor – there’s only 11,000 of us chasing 3,500 sales each month.

9.  Encourage a private jumbo-MBS market without subsidizing it.  Eventually, a private MBS marketplace could help shift the burden from Fannie/Freddie.

10. Run a tight ship.  We can handle it.

The powers-that-be have made some great moves to get us this far, now bow out gracefully and let free enterprise take care of the rest.

Posted by on Aug 20, 2015 in Bailout, Housing Tax Credit, Interest Rates/Loan Limits, Loan Mods, Local Government, Mortgage News, Mortgage Qualifying | 0 comments

Fed Move?

july 14 rates

The President of the Federal Reserve Bank of Kansas City thinks “it’s time” for the U.S. central bank to raise short-term interest rates to reflect solid improvements in the economy.

The current level of near zero short-term rates, set at emergency levels to deal with deep economic problems, “do not seem needed anymore,” Ms. George said. “We should now be beginning to think about a rise in interest rates,” the official told a gathering on agricultural matters held at her bank. “You have to have some dose of courage” in your forecast and be willing to act, even when the future is uncertain, Ms. George said.

Link to WSJ article here.

Austan isn’t so sure:

Posted by on Jul 15, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market | 2 comments

Summer Rates

loan rates

We’ve been enjoying a statistical exuberance that is somewhat misguided.

The latest Case-Shiller Index was the March reading, which includes sales data from the previous two months too.  Our recent local data has been looking strong as well, with both April and May sales and prices higher year-over-year.

But rates were lower when those buying decisions were made.  Rates are heading north now, and are higher than they have been all year:

June rates

The reports of good news will keep coming all month, and sellers will stay optimistic – and be reluctant to lower their price in the midst of the euphoria.  But the prime spring selling season is complete, and the summer sales should be impacted if rates keep rising.

Back in 2013 when rates started rising, some buyers rushed to purchase – but that was 10% to 20% ago, price-wise. They are going to be more tempted to wait it out this time.

Get Good Help!

Posted by on Jun 3, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market, Spring Kick | 1 comment

Rate Hike Needed?

Shiller takes a shot at Californians in the video below:

The U.S. Federal Reserve should consider lifting interest rates sooner rather than later to tackle speculative bubbles in the housing and stock markets, Nobel Prize-winning economist Robert Shiller told CNBC on Monday.

Shiller said that some parts of the U.S. — such as San Francisco and California — were in “bubble territory,” with house prices growing rapidly.

“If I was asked to testify before them (the Fed) I might reconsider, but there is a tendency for central banks to ignore speculative bubbles until it’s too late,” Shiller said, talking about the need for higher interest rates.

“It may already be too late. Stock markets in the U.S. are quite high and prices in the real estate market are getting high.”

“I call this the ‘new normal’ boom – it’s a funny boom in asset prices because it’s driven not by the usual exuberance but by an anxiety,” said Shiller.

“This is an anxiety driven world – the whole world is driven by anxiety. It is anxiety about the aftermath of the global financial crisis, it’s anxiety about inequality and about computers replacing jobs,” he added.

Posted by on Jun 1, 2015 in Interest Rates/Loan Limits | 4 comments

NSDCC Sales History

Last week we saw the recent NSDCC sales history – how does it compare to previous years?

Here are the sales stats from the first four months of each year, going back to the beginning of the 2-out-of-5-year capital-gains tax exclusion – which helped trigger the ensuing bubble:

# of Sales
Median SP
April 30-Yr Mortgage Rate

In spite of all the excuses – low supply, high prices, tough credit, etc. – this year’s sales count is the second highest of the last ten years.

Want to know the direction of the market? Watch the sales count – it reflects the changing combination of low supply, prices, tough credit, and mortgage rates. We have it good here!

Click for more local history:

Posted by on May 19, 2015 in Interest Rates/Loan Limits, Jim's Take on the Market, North County Coastal, Sales and Price Check | 14 comments