Housing Starts Rise In 8 Months Out Of 9 This Year
Housing Starts on single-family homes gained last month, marking the 8th time that’s happened this year.
A “Housing Start” is a home for which the foundation has been excavated and, considered alongside other key market metrics, September data suggests that the housing market stabilization is complete.
Momentum in housing is overwhelmingly positive:
- Homes under contract are soaring
- National home supplies are way down
- Home values are up in a lot of markets
Despite the positive news, the press is calling September’s Housing Starts data a “bummer“. Citing a drop in monthly building permits, the media purports that housing will slow in the months ahead.
The conclusion may be right, but the rationale may be wrong.
The probable cause for fewer permits isn’t that the housing market is overdone. It’s that home builders are choosing to exercise caution given the pending expiration of the First-Time Home Buyer Tax Credit and a still-growing number of foreclosed homes.
It’s unclear what housing demand will be beginning in December and the last present a builder wants for the holidays is an excess of inventory.
It makes sense that building permits are down, in other words.
Looking back at February of this year, there’s a host of signs that housing is on the path to recovery. Now, that path won’t be a straight line and there’s bound to be setbacks, but September’s Housing Starts is not one of them.
Housing Starts are up 40 percent on the year.
Previewing The New Good Faith Estimate
The new Good Faith Estimate makes its debut January 1, 2010.
Expanded from 1page to 3, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version.
By most accounts, Congress will meet this goal.
The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance. It also includes a section called “The Shopping Cart” in which applicants can compare lenders.
The new Good Faith Estimate is concise, too. Using a series of “Yes/No” checkboxes on Page 1, mortgage lenders specifically note:
- The interest rate on the mortgage
- Whether the interest rate can change over time
- Whether the loan carries a prepayment penalty
- The length of the rate lock
Currently, this information is spread across 3 separate forms.
Furthermore, the new Good Faith Estimate simplifies rate-and-fee comparisons, showing applicants how a lower rate can be available for a higher set of fees, and vice versa.
For all of its clarity, though, the new Good Faith Estimate still fails to address the issue of “suitability”. As in, is this the right loan for the right borrower? That’s something only a loan officer can do.
For suitable advice, talk with a loan officer who both listens to your needs and helps you plan for them. Great terms on an unsuitable loan are often worse than “good” terms on the right one.
What’s Ahead For Mortgage Rates This Week : October 19, 2009
Mortgage markets worsened last week on better than expected economic data, causing mortgage rates to rise.
Last week was the third consecutive week that mortgage rates moved higher and, since touching a multi-month low in early-October, conforming mortgage rates are up by about a half-percent.
It’s likely rates will continue to rise, too. That’s because the same force that held rates down for so long is now the force pulling them up — expectations for the U.S. economy.
Over the last 6 months, it wasn’t clear in what direction the country was headed. The housing sector has been gaining in strength, but the rest of the economy has been a question mark.
Last week put an end to some of those questions:
- Retail Sales posted stronger-than-expected results
- Consumer Sentiment matched September 2008 levels
- Jobless and continuing claims fell below consensus estimates
Expectations for the U.S. economy are changing on the fly. As a result, stock markets gained last week and mortgage markets lost.
This week, rates could move higher still. There are an unusually large number of key economic reports including on housing and inflation, plus a handful of speeches from key Federal Reserve members.
With each positive announcement, mortgage rates should rise.
NORTHEAST LOS ANGELES: OPEN HOUSES FOR SUNDAY OCTOBER 18
Listing of Sunday’s Open Houses from I-Tech MLS
Listing of Sunday’s Open Houses from Combined L.A. Westside MLS
Featuring Open Houses in the Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon
The Fed Thinks The Economy Is Improving And What It Means For Home Affordability
Mortgage rates are higher after the Federal Reserve released the internal notes of its September 22-23, 2009 meeting.
Known as the “Fed Minutes”, the report details the conversation and cross-currents that led to the Federal Reserve’s decision to vote “unchanged” on the Fed Funds Rate after its last meeting.
The Fed Minutes are the lengthy companion to the more famous, succinct post-meeting press release.
As a comparison:
- Press Release: 383 words
- Minutes: 6934 words
The extra level of details is a big deal because Wall Street is perpetually in search of clues about what the Federal Reserve is going to do next.
In the past week, multiple Federal Reserve members hinted that the Fed Funds Rate may rise as early as April 2010. Fed Chairman Ben Bernanke even alluded to it, too.
The minutes revealed that the economy may improve even faster than was previously expected, too.
These acknowledgements are part of the reason why mortgage rates are up. Because the Fed Funds Rate rises to accommodate a growing economy, the prospect of economic recovery is drawing money into the stock market and away from mortgage-backed bonds.
Less demand for bonds means a lower prices which, in turn, leads to higher rates.
NORTHEAST LOS ANGELES REAL ESTATE MARKET STATS 10/4 – 10/11
These zip codes include the Northeast Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon.
NORTHEAST LOS ANGELES: OPEN HOUSES FOR SUNDAY OCTOBER 11
Listing of Sunday’s Open Houses from I-Tech MLS
Listing of Sunday’s Open Houses from Combined L.A. Westside MLS
Featuring Open Houses in the Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon
October 9 Market Report Update
As expected, mortgage applications made an impressive jump last week, up 16.4%, as mortgage rates continue to drop.
Both refinances and purchase applications were up indicating that consumers are interested in readjusting their payments as well as buying homes. While applications are at their highest level since May 2009, and this is very good news, the question remains, what percentage of these applications will be accepted?
Need more information? Call Joe Elizondo of Northeast Financial at 323-256-7833 or email Joe at neast-financial @ sbcglobal.net.
NORTHEAST LOS ANGELES REAL ESTATE MARKET STATS 09/27 – 10/04
These zip codes include the Northeast Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon.