Mortgage rates began trending higher last week, as the limited amount of economic news that came out was not as dire as expected. While the economy continues to run at a sub-par level, there is some evidence that we may not drop as far, or last as long, as some have been predicting. With inflation refusing to behave, signs of stability are increasing the chances that the Fed will stand pat on rates.
This week is huge in terms of important events and data for financial markets. There is a moderate likelihood that the Fed will trim rates another '/4-point on Tuesday. However, this is unlikely to help mortgage rates, as they have been held in check by growing inflationary concerns. We could see mortgage rates begin to climb aggressively if GDP for the 1st quarter comes in above 0.8% or if Friday's Employment Report is much better than expected. Either of these would indicate that the economy might be faring better than thought. This would free the Fed to return to focusing efforts on fighting inflation, which could lead to the possibility of higher interest rates later this year.
It is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I'm always here to help advise you, your friends, and your colleagues.
Paul Cantor is a mortgage planner at TrustMor Mortgage Campnay. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com
Monday, April 28, 2008
Richmond, The Perfect Time to Buy a Home.
Is it a good time to buy a home? Is the value of my house going to drop 10, 15, 25 or even 40%? Should I sell my house and move into a rental before the housing market collapses? Are we in a recession? Are mortgage rates going to continue to drop?
These are a few of the questions asked of me on a daily basis these days.
The omnipresent negative media hype has even had me start to wonder about these questions. There is validity to theory that the media has created a self-fulfilling prophecy of declining home values throughout the nation. While other loan officers were fearful for their jobs in the late summer, while the credit crunch was unfolding, I was experiencing very positive feelings, my phone was ringing with calls of concern from past customers and referral sources, truly concerned about my personal situation, this made me realize that what I do and the advise I give does make a positive difference in the lives of those I serve.
The calls are continuing but the subject matter includes request for advice on whether to buy, refinance, and sell, move-up…. I am fortunate to be a mortgage planner practicing in the Richmond market and not in Ft. Lauderdale, San Diego, Detroit, Las Vegas or Fairfax County. The fundamentals of the Richmond area housing market remain strong. Sure homes aren’t selling at the hyper-pace of three years ago, they are selling at a more normalized pace, or as we prefer in Richmond a more civilized pace. Richmond's 2007 unemployment rate averaged out monthly was shy of 3.2%, well below the national average of over 4.5% (when I took macro-economics in college I was taught that a 5% unemployment was equivalent to full employment, due to normal transitions). This is important, when people have jobs and expect continued employment they buy houses. Demonstration of the strength of the Richmond housing market is in most instances anyone who purchased a home two years ago could sell their home for a sizable profit today. Yes there are a few pocket of exceptions, most of which are in neighborhoods where builders have standing unsold inventory of homes and developed building sites.
It is a great time to buy a home. It may not be the best time for someone who has owned a home for less than a year to sell and get out of the market. The media hype and a slower calmer pace of sales provides an outstanding opportunity to buy. Whether buying a first home, investment (rental) property or moving up to a more expensive house, it is time to take action. Mortgage rates remain very low. Sellers are making sales concessions, such as paying all purchaser's closing costs or paying for upgrades and cosmetic changes to homes. The long-term outlook for the Richmond economy is very positive. The current deals often mean it is wise to use bridge financing, to bridge the gap between the sale of a current home to close on a purchase of a new one.
Fannie Mae and Freddie Mac, the private Federally chartered entities that guarantee the majority of mortgage debt in the US have not nor at this point intend to classify the Richmond market as one with declining home values, making great loan options including 100% financing still available to many home buyers
Conversations of people discussing moving and making offers to purchase a new home are now being overheard all over the Richmond area. Recent actions by the Fed have translated to people looking at refinancing and in many cases this has resulted in folks deciding not to refinance but to move-up to a more expensive home. If this activity continues the days of attractive seller concessions will disappear. Builders have slowed down new home starts and are finally clearing out inventories. All this means that Richmond home prices are going to start rising at a faster pace and now is a good time to buy.
How does a seller make sure a home sells quickly? Time and time again hind site shows that a quick sale (not a fire sale) is better for a seller than a long dragged out marketing and listing period. The first piece of advice is to seek expert advice, talk to an experienced reputable Realtor® and loan officer. Do not go into the market pricing your home high and then plan to cut the price a few weeks if the property goes unsold, this looks desperate and typically will not attract additional quality prospects. Talk to both your Realtor® and mortgage lender to see what sales price will still make the numbers work for you on that new purchase. Put some effort in making sure the house is in tiptop shape. Enhance the curb appeal with landscaping; power washing and fresh paint on widows, doors and shutters, De-clutter the interior of the house, especially floors in closets and other surface area. Make sure everything is clean. Additionally it is always a good idea to have a per-sale home inspection and appraisal done; this shows good value and eliminates uncertainties for prospective buyers. Make sure your real estate agent has a good sound marketing plan, extending beyond putting your home in MLS (Multiple Listing Service).
A home is more than a financial investment. While owning almost always makes the best financial sense, the American Dream of home ownership also provides a sense of being a part of a community, pride, stability and security.
In summary it is an ideal time to buy a home in the Richmond market. To maximize the opportunities this market has to offer it is important to seek the expertise of good reliable real estate agent and mortgage professional.
About the author: Paul Cantor is President of TrustMor Mortgage Company in Geln Allen, VA. He is a frequent speaker at local real estate financing forums. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com.
These are a few of the questions asked of me on a daily basis these days.
The omnipresent negative media hype has even had me start to wonder about these questions. There is validity to theory that the media has created a self-fulfilling prophecy of declining home values throughout the nation. While other loan officers were fearful for their jobs in the late summer, while the credit crunch was unfolding, I was experiencing very positive feelings, my phone was ringing with calls of concern from past customers and referral sources, truly concerned about my personal situation, this made me realize that what I do and the advise I give does make a positive difference in the lives of those I serve.
The calls are continuing but the subject matter includes request for advice on whether to buy, refinance, and sell, move-up…. I am fortunate to be a mortgage planner practicing in the Richmond market and not in Ft. Lauderdale, San Diego, Detroit, Las Vegas or Fairfax County. The fundamentals of the Richmond area housing market remain strong. Sure homes aren’t selling at the hyper-pace of three years ago, they are selling at a more normalized pace, or as we prefer in Richmond a more civilized pace. Richmond's 2007 unemployment rate averaged out monthly was shy of 3.2%, well below the national average of over 4.5% (when I took macro-economics in college I was taught that a 5% unemployment was equivalent to full employment, due to normal transitions). This is important, when people have jobs and expect continued employment they buy houses. Demonstration of the strength of the Richmond housing market is in most instances anyone who purchased a home two years ago could sell their home for a sizable profit today. Yes there are a few pocket of exceptions, most of which are in neighborhoods where builders have standing unsold inventory of homes and developed building sites.
It is a great time to buy a home. It may not be the best time for someone who has owned a home for less than a year to sell and get out of the market. The media hype and a slower calmer pace of sales provides an outstanding opportunity to buy. Whether buying a first home, investment (rental) property or moving up to a more expensive house, it is time to take action. Mortgage rates remain very low. Sellers are making sales concessions, such as paying all purchaser's closing costs or paying for upgrades and cosmetic changes to homes. The long-term outlook for the Richmond economy is very positive. The current deals often mean it is wise to use bridge financing, to bridge the gap between the sale of a current home to close on a purchase of a new one.
Fannie Mae and Freddie Mac, the private Federally chartered entities that guarantee the majority of mortgage debt in the US have not nor at this point intend to classify the Richmond market as one with declining home values, making great loan options including 100% financing still available to many home buyers
Conversations of people discussing moving and making offers to purchase a new home are now being overheard all over the Richmond area. Recent actions by the Fed have translated to people looking at refinancing and in many cases this has resulted in folks deciding not to refinance but to move-up to a more expensive home. If this activity continues the days of attractive seller concessions will disappear. Builders have slowed down new home starts and are finally clearing out inventories. All this means that Richmond home prices are going to start rising at a faster pace and now is a good time to buy.
How does a seller make sure a home sells quickly? Time and time again hind site shows that a quick sale (not a fire sale) is better for a seller than a long dragged out marketing and listing period. The first piece of advice is to seek expert advice, talk to an experienced reputable Realtor® and loan officer. Do not go into the market pricing your home high and then plan to cut the price a few weeks if the property goes unsold, this looks desperate and typically will not attract additional quality prospects. Talk to both your Realtor® and mortgage lender to see what sales price will still make the numbers work for you on that new purchase. Put some effort in making sure the house is in tiptop shape. Enhance the curb appeal with landscaping; power washing and fresh paint on widows, doors and shutters, De-clutter the interior of the house, especially floors in closets and other surface area. Make sure everything is clean. Additionally it is always a good idea to have a per-sale home inspection and appraisal done; this shows good value and eliminates uncertainties for prospective buyers. Make sure your real estate agent has a good sound marketing plan, extending beyond putting your home in MLS (Multiple Listing Service).
A home is more than a financial investment. While owning almost always makes the best financial sense, the American Dream of home ownership also provides a sense of being a part of a community, pride, stability and security.
In summary it is an ideal time to buy a home in the Richmond market. To maximize the opportunities this market has to offer it is important to seek the expertise of good reliable real estate agent and mortgage professional.
About the author: Paul Cantor is President of TrustMor Mortgage Company in Geln Allen, VA. He is a frequent speaker at local real estate financing forums. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com.
Monday, April 21, 2008
Mortgage Rate Commentary Week of April 20, 2008
Last week ended with upward pressure beginning to mount on mortgage rates. Economic news was mixed, but hinted that perhaps the downturn will not be as bad, or as long, as many had feared. Both Retail Sales and Industrial Production posted only small gains, but both faired better than expected. Both the Producer and Consumer Prices Indices revealed that inflation is still marching ahead with little sign of abating any time soon. All of this makes the likelihood of a rate cut from the Fed less likely, and many interest rates began to trend upward with these reduced expectations.
We could see mortgage rates holding fairly steady this week as the market prepares for next week's Fed meeting. There are not any major market-moving economic reports due. However, we will get some insight into the housing market with both new and existing home sales data due. Any signs of recovery in the housing market could be met with upward pressure on mortgage rates. If housing data plummets, we may see some downward pressure in hopes of more help from the Fed.
Paul Cantor is a mortgage planner in central Virginia. He may be reached at (804) 433-1510 or at www.PaulCantor.com .
We could see mortgage rates holding fairly steady this week as the market prepares for next week's Fed meeting. There are not any major market-moving economic reports due. However, we will get some insight into the housing market with both new and existing home sales data due. Any signs of recovery in the housing market could be met with upward pressure on mortgage rates. If housing data plummets, we may see some downward pressure in hopes of more help from the Fed.
Paul Cantor is a mortgage planner in central Virginia. He may be reached at (804) 433-1510 or at www.PaulCantor.com .
Monday, April 14, 2008
Weekly Mortgage Rate Commentary
Mortgage rates held mostly steady last week as markets appeared to be taking a breather while waiting for next week's onslaught of economic data.
While some calm might be nice for the entire mortgage industry, we could see volatility return this week with the amount of economic data due. This week, we get insight into many segments of the economy. Retail Sales and Industrial Production numbers are due this week with expectations of very little change. If either number spikes higher, we could see mortgage rates moving higher. The best situation for mortgage rates would be to see sluggish results for both readings, with some good inflation news, as both the Consumer and Producer Price Indices are due. After last month's surprise flat CPI core number, another lower CPI reading would be cheered by the market, and we could see mortgage rates trending downward in increased expectations of additional Fed rate cuts. Any major government announcements regarding housing or mortgages programs could send rates either way.
Paul Cantor is a mortgage planner at TrustMor Mortgage Company in central Virginia. he may be reached at (804) 433-1510 or at www.PaulCantor.com .
While some calm might be nice for the entire mortgage industry, we could see volatility return this week with the amount of economic data due. This week, we get insight into many segments of the economy. Retail Sales and Industrial Production numbers are due this week with expectations of very little change. If either number spikes higher, we could see mortgage rates moving higher. The best situation for mortgage rates would be to see sluggish results for both readings, with some good inflation news, as both the Consumer and Producer Price Indices are due. After last month's surprise flat CPI core number, another lower CPI reading would be cheered by the market, and we could see mortgage rates trending downward in increased expectations of additional Fed rate cuts. Any major government announcements regarding housing or mortgages programs could send rates either way.
Paul Cantor is a mortgage planner at TrustMor Mortgage Company in central Virginia. he may be reached at (804) 433-1510 or at www.PaulCantor.com .
Tuesday, April 8, 2008
Buy A Home Or Remodel?
While much of the country is fixated on the problems of the overall housing market, many people are facing a much more personal issue - what to do with their own home when a change is needed. Whether it is the birth of a child, an elderly parent moving in, a job change, or just time for a change, making the decision to move or remodel is rarely an easy one. With the overall housing market not as healthy as it was a few years ago, the questions move beyond the number of bedrooms, the local schools, and local amenities. One must consider how long it may take to sell the home, especially if the needs are pressing. Additionally, will there be improvement projects to complete that would make the house easier to sell. Remodeling has its own set of questions, including how long you might need to stay in the home to recoup the investment from a major project.
Whether remodeling or moving is in your near future, some significant mortgage analysis will be required. Two of the most important issues will be the equity in your home and your credit situation. Generally, the more equity in your home, the greater your options become. Your home's equity can be accessed for a remodeling project either though cash-out refinancing of your current mortgage or a second mortgage or line-of-credit. When selling and buying a new home, your equity can be used for your new home's down payment and closing costs. Your credit situation will impact what type of interest rate you'll pay, how much you can borrow, and the type of loans you should consider. Given current market conditions, an honest and thorough analysis of your financial situation should be completed before you get serious about moving or remodeling. Please give me a call to schedule a time for us to meet. I'll help make sure that you understand all the financial options available to you.
Paul Cantor is frquent speaker on local real estate financing issues and may be reached at (804) 433-1510 or at www.PaulCantor.com .
Whether remodeling or moving is in your near future, some significant mortgage analysis will be required. Two of the most important issues will be the equity in your home and your credit situation. Generally, the more equity in your home, the greater your options become. Your home's equity can be accessed for a remodeling project either though cash-out refinancing of your current mortgage or a second mortgage or line-of-credit. When selling and buying a new home, your equity can be used for your new home's down payment and closing costs. Your credit situation will impact what type of interest rate you'll pay, how much you can borrow, and the type of loans you should consider. Given current market conditions, an honest and thorough analysis of your financial situation should be completed before you get serious about moving or remodeling. Please give me a call to schedule a time for us to meet. I'll help make sure that you understand all the financial options available to you.
Paul Cantor is frquent speaker on local real estate financing issues and may be reached at (804) 433-1510 or at www.PaulCantor.com .
Monday, April 7, 2008
Weekly Mortgage Rate Commentary
Mortgage rates held relatively steady for a second week with weak, but stable, economic news. While we may see some downward pressure this week from the greatest jobs loss reported in five years, the Labor Department reported a much worse than expected loss of 80,000 jobs in March. Last week's ISM Manufacturing Index ticked up slightly. While it is still below 50, which indicates contracting manufacturing, many interpreted the upward bump as positive.
This week is a lighter week in terms of data for markets to digest. The Fed and the compromise bill regarding housing and mortgages being hammered out in Congress will likely dominate this week. The minutes from the Fed's last meeting are due this week, along with speeches from Fed Chair Bernankc and from Fed member Richard Fisher. If we see consensus that the economic challenges can be reversed quickly, we could see some upward pressure develop on rates. If these Fed-related items reveal concerns about prolonged economic challenges, rates may dip a bit. Also watch this week for what's in and what's out in the compromise bill. Rates could be pushed either way.
Paul Cantor is a mortgage planner at TrustMor Mortgage Company in central Virginia. he may be reached at (804) 433-1510 or at www.PaulCantor.com .
This week is a lighter week in terms of data for markets to digest. The Fed and the compromise bill regarding housing and mortgages being hammered out in Congress will likely dominate this week. The minutes from the Fed's last meeting are due this week, along with speeches from Fed Chair Bernankc and from Fed member Richard Fisher. If we see consensus that the economic challenges can be reversed quickly, we could see some upward pressure develop on rates. If these Fed-related items reveal concerns about prolonged economic challenges, rates may dip a bit. Also watch this week for what's in and what's out in the compromise bill. Rates could be pushed either way.
Paul Cantor is a mortgage planner at TrustMor Mortgage Company in central Virginia. he may be reached at (804) 433-1510 or at www.PaulCantor.com .
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