Friday, July 2, 2010

Pending Home Sales Fall; Unemployment Claims Up

Pending home sales in May fell by 30.0 percent to an index level of 77.6 from 110.9 in April, the National Association of Realtors reported yesterday.
The level of pending home sales is 15.9 percent below May 2009. The data reflect contracts signed to purchase a home but not closings, which normally occur with a lag time of one or two months. This was the lowest level of pending home sales in the data series, which dates back to 2001.
Pending home sales in the South saw the largest regional decline, decreasing by 33.3 percent; they are 14.4 percent lower than May 2009. In the Midwest the index fell by 32.1 percent and is 20.2 percent below a year ago. Sales in the Northeast fell by 31.6 percent and are 14.8 percent lower than a year ago. The West saw the smallest decline, but still fell by 20.9 percent and were 15.1 percent below a year ago.
The May pending home sales data are in line with the MBA’s Weekly Applications Survey data, which have showed an 18 percent decline in May and a 15 percent drop in June, following 9 percent increases in the two months prior, indicating that new and existing home sales are likely to continue to fall in the months ahead. The home buyer tax credit has pulled demand for homes forward in the spring and we are now seeing some payback following the end of program, as the deadline for signing contracts was April 30. New home sales fell by nearly 33 percent in May and existing home sales fell by 2 percent.
Meanwhile, for the week ending June 26, seasonally adjusted initial unemployment claims was 472,000, an increase of 13,000 from an upwardly revised 459,000 (previously reported as 457,000) the previous week. The four-week moving average increased by 3,250 to 466,500 from 463,250 the week before, which was initially reported as 462,750.
The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending June 19, unchanged from the prior week's revised rate of 3.6 percent, which was estimated at 3.5 percent previously.
The advance number for seasonally adjusted insured unemployment during the week ending June 19 was 4.616 million, an increase of 43,000 from the preceding week's revised level of 4.573 million. The four-week moving average was 4.567 million, a decrease of 25,250 from the preceding week's revised average of 4.592 million.
June’s initial unemployment claims are 1.94 percent higher than April’s level, the second increase in three months. In the 10 months prior to March, claims had fallen in eight of those months. June’s average level of 467,000 claims is the highest since February this year.
In other news, the Institute for Supply Management Manufacturing Index for June decreased by 3.5 percent to 56.2 percent from May’s 59.7 percent, a sign that while both the overall economy and the manufacturing sector continue to grow, the pace of growth is slowing.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Thus, the index indicates growth for the 14th consecutive month in the overall economy and expansion in the manufacturing sector for the 11th consecutive month.
Most component indexes pointed to slower growth, while inventories components indicated that inventories are contracting, but at a slower rate. The index for new orders decreased by 7.2 percentage points to 58.5 percent. This was the 12th consecutive month of growth in new orders. A New Orders Index above 50.2 percent is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
The index for production decreased by 5.2 percentage points to 61.4 percent from 66.6 percent. An index above 51 percent tends to be in line with an increase in the Federal Reserve Board's Industrial Production figures. This is the 13th consecutive month that the Production Index has registered above 50 percent. The index for manufacturing employment decreased 2 percentage points to 57.8 percent from 59.8 percent, which was the seventh consecutive month of employment growth in this sector. A value above 49.8 percent is generally consistent with an increase in Bureau of Labor Statistics data on manufacturing employment.
Manufacturers' inventories contracted for the third consecutive month as the Inventories Index decline slightly by 0.2 percentage points to 45.8 percent. An index greater than 42.6 percent is generally consistent with expansion in the Bureau of Economic Analysis' figures on overall manufacturing inventories (in chained 2000 dollars). The index measuring customer’s inventories increased by 6 percentage points to 38 percent in June and was the 15th consecutive month that customer inventories were seen as “too low"

Chicago's Premier Broker
Keith Stewart

Friday, June 18, 2010

Home Buyer Tax Credit Closing Deadline Extended

The Home-Buyer Tax Credit closing deadline has been extended three months following a vote in the Senate. Senators voted 60 to 37 to approve the extension for the credit, which has a current deadline of June 30 to close a purchase. This extension would apply to people who entered a purchase contract by April 30. "By extending the transaction deadline, we can ensure that everyone taking advantage of this credit can complete the purchase of their new home," said Democratic Sen. Harry Reid of Nevada, one of the motion's sponsors, in a statement. The credit provision is part of a larger jobs and tax package that both chambers must still vote on before it becomes law.

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Thursday, April 29, 2010

Fed remains cautious despite good economic news

Deciding once again that the economy remains too fragile for higher interest rates, a cautious Federal Reserve kept increases on hold Wednesday and repeated that conditions requiring low rates were likely to remain for an extended period.

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Contact Keith Stewart

Monday, April 26, 2010

Time is running out to get the Home Buyer Federal Income Tax Credit!

Time is running out to get the Home Buyer Federal Income Tax Credit!

You must be under contract by April 30, 2010 to be eligible for this $8,000 tax credit for first-time buyers. Previous homeowners, you may be eligible for a $6,500 tax credit....but you must act soon!

Contact us today for more information, and visit our website to view our great listings.

Our Team of Preferred Real Estate Consultants would be happy to assist you with finding the home of your dreams!

Tuesday, April 13, 2010

FHA Property Flipping Requirements

With certain exceptions, FHA has prohibited insuring a mortgage on a home owned by the seller for less than 90 days. This restriction was imposed in 2003 to prevent property flipping (reselling for profit with an artificially inflated value). On January 15, 2010, HUD announced a temporary (1 year) waiver of the prohibition with strict conditions to ensure against predatory practices.
Effective April 1, 2010, will allow the 90-day waiver for all properties acquired directly from a lender, but prohibits FHA financing for properties owned less than 90 days if the sales price is greater than or equal to a 20% increase over the seller's acquisition cost. The 90 days is calculated from the seller's acquisition date to the purchase contract date of the new transaction.
If the resale occurs within 0 to 90 days, the following requirements must be met:
1. All transactions must be arms-length; no identity of interest between buyer, property seller or third parties. Specific ways to ensure an arms-length transaction include:
Property seller currently holds title to the property. LLCs, corporations or trusts serving as property sellers must meet all applicable state and federal law.
No pattern or previous flipping activity exists on the property (as evidenced by multiple title transfers within 12 months.
The property was marketed openly and fairly (Any sales contracts with "assignment of contract of sale" may be a red flag).
2. Transactions with sales price greater than or equal to a 20% increase over seller's acquisition cost are not allowed.

Thank you for your business.

Monday, April 5, 2010

Pending Home Sales Rise in February

Pending home sales rise 8.2 % in February The biggest month-to-month increase was in the Midwest where pending sales jumped nearly 22%. Evidence that the Home Buyer Credit is stimulating the purchase market.

Just a reminder you have until April 30th to secure a contract and June 30th to close. I am sure there will be a large number of last minute contracts coming in. DONT WAIT UNTIL THE LAST MINUTE as you may get bogged down in underwriting.

Call Keith Stewart today to get Pre-Approved 773-529-7000

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Monday, March 29, 2010

Mortgage Rates Expected to Climb

The super-low mortgage rates everyone has enjoyed for more than a year may likely be coming to an end. The Federal Reserve is expected to end their campaign of buying up mortgage-backed securities this week.
The Federal Reserve Bank, last March began a 1 trillion-plus shopping spree to buy up mortgage-backed securities from Fannie Mae and Freddie Mac. This artificial involvement in the mortgage market was the main tool the Fed could use to keep interest rates low. That campaign is scheduled to be wrapped up Wednesday March 31st, the end of the first quarter.
Many experts predict this will cause mortgage rates to spike up. If you have been considering a refinance or purchase it may be best to pull the trigger before rates do go up. It seems inevitable at this point.

Call Today to lock in your low rate! 773-529-7000

Thursday, March 18, 2010

Source: Market Watch March 18, 2010, 1:21 p.m. EDT

The number of people applying for unemployment benefits fell by 5,000 in the latest week, marking the third straight drop, but there's little evidence companies are ready to hire at a pace that would sharply reduce the nation's high jobless rate. Unemployment predicted to stay high for some time.

Yet senior economic officials at the White House repeated a warning this week that unemployment might remain near its current level of 9.7% for an "extended period." White House officials predict the economy will add an average of 100,000 jobs a month in 2010, but that would just keep pace with natural growth in the labor force. Jobs would have to be created at double that pace to sharply reduce unemployment.

To help millions of workers who can't find jobs, Washington is set to extend benefits until the end of the year. Regular unemployment benefits run out after 26 weeks.Lawmakers this week also passed another stimulus bill, worth $17.6 billion, aimed at creating more jobs. Included in the measure are temporary tax credits for businesses that hire additional workers.

In the week of Feb. 27, the number of workers receiving extended federal benefits climbed 352,000 to 6.04 million, not seasonally adjusted.Altogether, 11.65 million people were collecting some type of unemployment benefits in the week of Feb. 27, up from 11.36 million. The numbers are not seasonally adjusted.

Wednesday, March 17, 2010

Home Affordable Foreclosure Alternatives-HAFA-Kicks off April 5

The new program, Home Affordable Foreclosure Alternatives, or HAFA, kicks off in April 5. Some real estate industry experts see it as a response to the limited success of a government loan modification drive known as the Home Affordable Modification Program, or HAMP.

Under the new HAFA program, if a homeowner doesn't qualify for a HAMP modification they must be offered a short sale. Borrowers can also be offered a deed in lieu of foreclosure.
Homeowners who qualified for a HAMP modification, but have missed two consecutive payments, will also be offered a short sale or deed in lieu through HAFA.

A short sale happens when the borrower and the mortgage servicer agree to sell a home for less than the value of the loan or loans. A deed in lieu of foreclosure occurs when a homeowner voluntarily gives the deed of the property to the servicer.

To help kick-start HAFA, there are government incentives. Borrowers get $1,500 to help them move to a new home and up to $3,000 in short sale proceeds can be given to holders of second mortgages on the homes in the program.

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Tuesday, March 16, 2010

Fed stands pat on rates-But will mortgage rates go up?

Although the Federal Reserve kept its benchmark interest rate at a record low level Tuesday and made no changes to the key "extended period" policy pledge, a signal that it believes the economy still needs support to get to a sustainable path.

Many are predicting the long term mortgage rates to spike upward. Primarily due to the fact the Fed's buying of mortgage backed securities comes to an end at the end of this month. This has a direct impact on mortgage interest rates that were held at historical lows by the Treasury buting Mortgage Backed Securities creating a false market.

If you have been considering a refinance, or a purchase it may be a good idea to move forward sooner rather than later.

Call Today: 773-529-7000

Monday, March 15, 2010

Homebuyer Tax Credit Creating Activity

With the Homebuyer Tax Credit deadline of April 30th fast approaching, there has been a substantial increase in potential buyers calling to get Pre-Approved. With the mad rush to secure a contact by April 30th and close by June 30th. There will be a log jam so to speak getting loans through underwriting and scheduled with the title companies.

Call or visit my website today to beat the rush.

Friday, March 12, 2010

Shows true cost of borrowing

That’s essentially how the APR works. It takes any fees you pay for a mortgage loan or refinance, and recalculates their cost as part of an interest rate. It’s a handy way of comparing loan offers with differing fees and interest rates. For example, you may have one loan offer at 5.5 percent, zero points and $2,500 in fees, vs. another at 5.25 percent, two points and $7,000 in fees. Your APR on the first might be 5.6 percent, but 5.75 percent on the second. The first loan is the least expensive, even though it has a higher interest rate.

The APR can be used to compare offers on adjustable rate mortgages, even though the rates may fluctuate over time. The way that works is, the APR is calculated assuming you’ll have the mortgage for the full term of the loan and simply pay the new rate whenever it resets. Because no one can predict what interest rates will do in the future, the calculation simply assumes the base rate, or rate index, that rate resets are based on will remain unchanged, so the calculation simply depends on how much the resets
vary from the base rate.

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Thursday, March 11, 2010

Get Preapproved Before You Start Home Shopping

Getting a mortgage can be difficult these days. So when shopping for a new home, it helps to be Pre-Approved before you start your search or make an offer to a seller.
A Pre-Approved mortgage means that a lender has already reviewed your income, credit and assets to verify that you can qualify for the mortgage you’re seeking. It shows a seller that you’re serious about buying a home and can deliver on your purchase offer, which puts you in a better position to negotiate.

Pre-Approved means you’ve passed a higher level of lender scrutiny than someone who’s simply been Pre-Qualified. The latter simply means the lender thinks you ought be able to qualify for a mortgage, based on your finances as you describe them. A Pre-Approval means the lender has confirmed it.

At Chicago's Mortgage Choice our team is committed to providing our clients with the highest quality financial services combined with the lowest rates available in your area.

Call us Today 773-529-7000

Wednesday, March 10, 2010

Home Purchase Motivation in April 2010

The $8,000 first-time homebuyer and $6,500 repeat homebuyer tax credits can only be taken on homes for which sales contracts are signed by April 30, though buyers have until June 30 to actually close the sale. Congress already extended and expanded the credit after it was originally due to expire last November; there doesn’t seem to be much support for extending it again, so if you miss the April 30 deadline, you’re probably out a luck on this one.

A potentially bigger impact will occur when the Fed buys the last of $1.25 trillion in mortgage securities it has been purchasing over the past year. Also scheduled to conclude on April 30, the program has been credited for driving mortgage interest rates to record lows in the spring and again in the fall of 2009, and keeping them at or below 5 percent for most of the year.

Though 30-year fixed rates held steady around 5 percent through Jan. 2010, most observers expect them to rise sharply once the Fed purchase program concludes. Many observers expect rates to almost immediately shoot up to 6 percent and hold there, an increase of a full percent. On a $250,000 30-year loan, that 1 percent translates to an additional $150 a month, or $1,800 a year.

Finally, in early April the FHA is increasing the mortgage insurance premium it charges on all loans by half a percent, from 1.75 percent to 2.25 percent. A onetime fee charged upfront at the time of closing, it means that the premium on a $150,000 FHA loan would increase by $750, to $3,375. However, this only applies only to borrowers seeking an FHA-backed loan, although those are making up a larger share of the market.