Housing Optimism

Clearly, the biggest news in the country these days is the Obamacare/ACA rollout that has gone less well than many have hoped.  While most of the country hangs on to see what will happen next, our housing market is actually doing quite well.  Here are some numbers to send you optimistically into the holiday season:

  • Research firm CoreLogic reported that its Home Price Index showed a year-over-year increase of 12.4 percent from August 2012 to August 2013. That marks the eighteenth consecutive month of year-over-year gains.
  • In addition, CoreLogic reported that foreclosure inventories in August dropped by 33 percent nationally compared to August 2012. This was the twenty-second consecutive month with a year-over-year decline.
  • FNC’s Residential Price IndexTM (RPI), shows both a substantial increase in home prices during the third quarter of 2013 but also a broadening of the housing recovery across the country.  The RPI increased 2.5 percent between the second and quarters, making the most recent quarter’s growth the fastest in the current recovery.

While it’s assumed that the winter months will quell the great gains in home prices, as they typically do, we are encouraged heading into 2014.  Now is still a great time to purchase a home—mortgage rates are slightly and anxious home sellers are more ready to get out than at other times during the year.

Are you in need of fast answers and reliable service related to a mortgage? Call us today: 913.396.4448.


Housing and the Fed

Bernanke-House-Policy_AP_MI-resize-380x300The most highly anticipated Fed meeting in years captured all the attention last week. The Fed statement caught nearly every investor by surprise, since the Fed did not begin to taper its bond purchase program. Mortgage rates swiftly dropped following the news and ended the week lower.

While the vast majority of investors expected a small cut in the quantity of monthly Fed bond purchases, the Fed made no change. According to the statement, Fed officials will wait for signs of stronger economic growth before scaling back its bond purchases. Fed Chief Bernanke stated that the economic data “does not yet provide sufficient confirmation” to justify reducing bond purchases. For mortgage rates, the continued demand from the Fed for mortgage-backed securities (MBS) is positive.

As we have said before, when the Fed talks… the markets listen. More frightening than the double talk from regional Fed chiefs that has ensued in the days since the announcement, is the complete befuddlement of investors. Their faith in their ability to anticipate what the Fed will do is waning, which likely will lead to high levels of volatility in the future.

The housing sector has been a major source of strength for the economy this year. By waiting to taper, Fed officials will have more time to see what impact the rise in mortgage rates in recent months will have on the housing market. The housing data released this week showed a modest pace of improvement. August Existing Home Sales increased 2% to the highest level since February 2007, exceeding even the peak seen in November 2009 when the homebuyer tax credit was set to expire. Existing Sales were 13% higher than one year ago. Total inventory of existing homes available for sale rose slightly to a 4.9-month supply.

Strategically Pay Off Debt to Boost your Credit Score

Paying off debt is hard enough as it is, but when you’re thinking of purchasing a home the strategy you use to pay off that debt is important. Mortgage Bankers look at your debt utilization ratio when considering you for a home loan and the amount of financing they’re willing to offer.

Let’s say you have 6 credit cards with balances that are close to their credit limit. Instead of utilizing a debt snowball (where you pay the smallest card off first and then throw the amount you have left each month at the next largest amount), you’ll want to divide the amount you have to pay towards debt across all 6 cards and pay a little to each of them. That way, it lowers your overall debt utilization ratio. In addition to this, make sure you keep any credit lines open once the cards are paid off.

If you aren’t sure if you’ll be approved for a loan and want to start working toward a new home, give us a call. We’re happy to run the numbers for you and let you know how far away you are from your dream and what you need to do to make it a reality.

Are you in need of fast answers and reliable service related to a mortgage? Call us today: 913.317.5626.

Why do we care about Cyprus?

cyprusHave you ever been to Cyprus? Me neither. Let me give you some background… the country is actually an island in the Easter Mediterranean sea known for vacationing and home to about 1 million people. So why did the news of economic collapse cause such an issue recently?

Banks in Cyprus, a member of the European Union, are in dire need of additional capital. Cyprus is a tax haven for foreigners and its banking sector is enormous compared to the size of its economy. The EU proposed to loan Cyprus some of the needed funds, if Cyprus raised the rest through a one-time tax on all bank deposits. The bank deposit tax was very unpopular (to say the least), and government leaders in Cyprus voted against the bailout plan without providing an alternative. EU officials have warned that they will cut off emergency funding for banks in Cyprus on Monday if Cyprus is not able to come up with the rest of the needed funds. Most analysts view the Cyprus bailout terms as a unique situation given its nature as a tax haven, but investors are nervous that the troubles may spread.

As troubles in Europe spread, so do issues with investor confidence for our own economy. Analysts have been predicting a large market sell-off for some time as the Dow reached historically high levels recently. Some people wonder if more EU uncertainty will lead to this sell-off. Coincidentally, a large sell-off can prove positive for mortgage markets as investors flee to safe investments. And that, friends, is why we care about Cyprus.

Are you in need of fast answers and reliable service related to a mortgage? Call us today:913.317.5626.