Weekly Mortgage Watch – Week of December 19th

MORTGAGE MARKET COMMENTARY: Last week’s economic news certainly reinforced the notion that the economy is finally gaining a stronger footing. Nearly every piece of economic data came in positive. Retail Sales rose by 0.8%, Industrial Production ticked upward 0.4%, and the Leading Economic Indicators rose by a stout 1.1%. With economic prospects improving, it comes as no surprise that mortgage rates also moved higher last week. If we are indeed seeing this economic recovery gaining steam, then it is very likely we will see mortgage rates moving upward in the coming months. Even with these rising rates, it is well worth mentioning that rates are still at historic lows. Only a few years ago, the idea of sub-5% mortgage rates was almost an absurd concept, and anything near 6% was a fantastic rate.  Mortgage rates may stay fairly level this week, or perhaps even drop back at bit after the run up in recent weeks. The final reading of the third quarter’s GDP is due, and markets have already priced in a small increase in GDP. Unless we get a 3% GDP or greater, rates should remain fairly firm.

NEGATIVE HOME EQUITY DROPS IN THIRD QUARTER: According to a report from the real-estate data company CoreLogic Inc., the number of homes with negative equity shrank last quarter from 11 million homes to 10.8 million homes. Currently in the US, 22.5% of residences with mortgages were in negative equity at the end of the third quarter. This represents a total of $744 billion in underwater properties. This is actually an improvement from the $800 billion in negative equity at the end of 2009.

BUYERS: If you are a considering buying in 2011, you will want to get your loan approval right away.  There are some FHA changes coming this Spring that will make it harder to get a loan,

SELLERS: When buyers hands become more tied, sellers see less buyers and lower sales prices.  If you are considering selling this Spring, doing so earlier in the year may put more dollars in your pocket.

You can follow any responses to this entry through the RSS 2.0 feed.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>