Category Archives: New and Noteworthy

Getting Easier Still to Get Home Financing

From Housing Wire – May 12, 2015

hanks in large part to loosening government standards, it keeps getting easier to get a mortgage, the Mortgage Bankers Association said in a new report.

According to the MBA’s newly released Mortgage Credit Availability Index, mortgage credit availability rose in April by 0.5% to 122.0. The index also rose in March, climbing 2.3% to 121.4.

A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.

According the MBA’s data (as seen below), the mortgage credit availability index has risen consistently over the last several months, indicating the loosening of credit in the wake of several announcements from the federal government designed to open the credit box.

MBA Total MCAI April

(Source: MBA)

In March, MBA Chief Economist Mike Fratantoni said thatFannie Mae and Freddie Mac’s introduction of 97% loan-to-value loan programs, along with the continued expansion of the Federal Housing Administrationstreamline refinance, helped to ease credit in March.

For April, Fratantoni said that mortgage credit became more available due to other new government offerings.

“Mortgage credit availability increased on net in April,” Fratantoni said. “The increase was driven by new offerings of FHA’s 203K home improvement program, new VA offerings, and new jumbo products. The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings.”

Broken down by segments, the MBA’s report showed that the government MCAI, which measures FHA, VA and USDA loan programs rose 1.1% in April, driving much of the overall increase.

MBA Govt MCAI April

(Source: MBA)

The jumbo MCAI also rose in April, climbing by 0.8%. The conforming MCAI, which measures loan programs that fall under conforming loan limits, rose slightly in April, easing up by 0.2%.

On the other hand, the conventional MCAI, which examines non-government loan programs, fell in April by 0.6%.

While the mortgage credit availability index rose again in April, credit is still far less available than it was in the run-up to the financial crisis, as shown in the graph below.

Total MBA MCAI April

(Source: MBA)

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via Ellie Mae’s AllRegs Market Clarity product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time, the MBA said.

Taken from –

 

http://www.housingwire.com/articles/33866-mba-it-keeps-getting-easier-to-get-a-mortgage

More Info – Lenders Easier on Borrowers

Things are looking up, seems like weekly you can find a reason to jump back into housing.

Refi, or purchase, if you have been turned down, or think you cannot get a loan, read the article below, then contact us for answers.

CONTACT A SPECIALIST

Read on about the loosened lending standards here.

Kiplingers Says Lenders Pull Foot Off Break

Encouraging info here, a lot of people are now able to achieve their home financing goals. Find out today what you can do, read the good news, and talk to a specialist.

Welcome News

 

Market Watch

by : Sharon Campbell

QUOTE OF THE WEEK… “Only be afraid of standing still.” –Chinese proverb

INFO THAT HITS US WHERE WE LIVE… Standing still is something we need not fear in the real estate market. One data and technology firm reported home prices increased 0.8% in February, up 12.2% from a year ago, which represents 24 months in a row of year over year price gains nationally. Not counting distressed sales, prices were up 10.7% versus a year ago. Their chief economist commented: “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”

Another home data firm opined: “Over the year, we see Phase Three of the recovery unfolding, which we define as moderation across all price tiers.” The Commerce Department reported that in spite of harsher than normal weather, construction spending in January and February was up almost 9% from the same time last year. The National Association of Realtors revealed vacation home sales surged 29.7% last year, to 13% of all transactions. And the Mortgage Bankers Association’s survey of mortgage applications put the purchase index up 1% for the week ending March 28.

BUSINESS TIP OF THE WEEK… Online networking is important, but a recent study reported 95% of professionals believe face-to-face meetings are also essential to long-term relationships. Keep up your in-person networking .
>> Review of Last Week

GOOD JOBS… Friday arrived with a good March Employment Report, though not a great one. The stock markets at first rallied, but the early gains evaporated, as all three major indexes finished down for the day. The Dow and the S&P 500 eked out small increases for the week, but the tech-y Nasdaq suffered a loss. Some analysts felt the recent stock rally is tired and in need of a pullback. In other words, this is simply a market correction and doesn’t reflect any negative investor attitudes about the economy. That good but not great jobs report was simply consistent with the slow recovery we’ve seen for the last year.

Those Labor Department statistics showed an early spring rebound in hiring, with 192,000 new payrolls in March. Hiring was also stronger than originally thought in January and February, so revisions to those months gave us a total of 229,000 new jobs. Unemployment stayed at 6.7% thanks to 503,000 more in the labor force. Average weekly earnings were unchanged for the month, but 2.1% higher than a year ago, a good sign. ISM Manufacturing and Services indexes both showed a bit better growth in March. One negative: the February Trade Deficit ballooned to $42.3 billion.

The week ended with the Dow up 0.5%, to 16413; the S&P 500 up 0.4%, to 1865; but the Nasdaq down 0.7%, to 4128.

The bond market was mixed, with prices heading in both directions. But when all was said and done, the FNMA 4.0% bond we now watch finished the week up .75, at $104.06. In Freddie Mac’s Primary Mortgage Market Survey, national average fixed mortgage rates were relatively unchanged for the week ending April 3. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… A national online real estate site’s chief economist offered: “…home prices still look 5% undervalued. Even though prices have jumped in the last 2 years, they’re still in rebound mode.”
>> This Week’s Forecast

FED MARCH MEETING MINUTES, WHOLESALE PRICES UNDER CONTROL… It’s a quiet week for economic reports, save Wednesday’s release of the FOMC Minutes from the Fed’s last meeting. It’s always interesting, if not necessarily revealing, to see what the central bankers have to say about our economic prospects. Beyond that, it’s good to keep an eye on the wholesale Producer Price Index (PPI). Any rise there may mean consumer prices will soon follow. Fortunately, March PPI is forecast flat.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Apr 7 – Apr 11
Date
Time (ET)
Release
For
Consensus
Prior
Impact
W
Apr 9
10:30
Crude Inventories
4/5
NA
–2.379M
Moderate
W
Apr 9
14:00
FOMC Minutes
3/19
NA
NA
HIGH
Th
Apr 10
08:30
Initial Unemployment Claims
4/5
325K
326K
Moderate
Th
Apr 10
08:30
Continuing Unemployment Claims
3/29
2.843M
2.836M
Moderate
Th
Apr 10
14:00
Federal Budget
Mar
NA
–$106.5B
Moderate
F
Apr 11
08:30
Producer Price Index (PPI)
Mar
0.1%
–0.1%
Moderate
F
Apr 11
08:30
Core PPI
Mar
0.1%
–0.2%
Moderate
F
Apr 11
09:55
U. of Michigan Consumer Sentiment Index
Apr
81.0
80.0
Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Last week’s March jobs report wasn’t good enough to make economists think the Fed will hike the Funds Rate any time this year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Apr 30
0%–0.25%
Jun 18
0%–0.25%
Jul 30
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Apr 30
<1%
Jun 18
<1%
Jul 30
<1%

Market Watch

by : Sharon Campbell

QUOTE OF THE WEEK… “Winter is not a season, it’s an occupation.” –Sinclair Lewis, American writer

INFO THAT HITS US WHERE WE LIVE… It certainly has been a job getting through this winter in real estate. The latest evidence of this came with February New Home Sales, down 3.3% for the month, to a 440,000 annual rate. Observers once again felt that weekend snows in the Northeast, Mid-Atlantic states, and the Midwest motivated the downturn. Other analysts pointed out that February is always slow for home sales no matter what the weather is doing. Plus, contracts for these sales were signed at the start of the year, when buying a home isn’t a big post-holiday priority. There were an estimated 189,000 new homes for sale at the end of February, a 5.2-month supply.

Pending Home Sales were also down in February, 0.8%. This National Association of Realtors (NAR) measure of contracts signed on existing homes, indicates those sales should be off slightly a few months out. But the NAR’s chief economist was upbeat: “Contract signings for the past three months have been little changed, implying the market appears to be stabilizing. Moreover, buyer traffic information…shows a modest turnaround, and some weather delayed transactions should close in the spring.” Finally, the S&P/Case-Shiller 20-City Composite index dipped 0.1% in January, yet remained 13.2% ahead for the year. Adjusting for seasonal factors, prices were actually up 0.7% for the month.

BUSINESS TIP OF THE WEEK… Learn from what others have done, but then carve out your own path, dealing with whatever comes along. If something doesn’t work, try something else. Above all, never give up.
>> Review of Last Week

TIMOROUS TRADING… Caution was the watchword on Wall Street, as traders took profits on some of their higher flying stocks, leaving the Dow barely ahead for the week, the S&P 500 off a bit, while the tech-heavy Nasdaq suffered its biggest weekly drop since October 2012. Investors were clearly keeping an eye on the geopolitical uncertainty coming out of the Ukraine crisis. They were also concerned that the stock market’s recent record breaking performances may have been running ahead of the economic realities. As usual, it was a mixed set of data that described those realities.

A private survey put consumer confidence in March at its lowest level in four months. The dips in New Home Sales and Pending Home Sales raised concerns for some about housing. On the positive side, Weekly Initial Unemployment claims dropped to 311,000, the lowest level in four months. The four-week average for Continuing Unemployment Claims is at its lowest level in three months. Q4 GDP was revised upward to a 2.6% annual economic growth rate. And consumer Personal Spending, accounting for about two-thirds of the U.S. economy, went up the most in 3 months.

The week ended with the Dow up 0.1%, to 16323; the S&P 500 down 0.5%, to 1858; and the Nasdaq down 2.8%, to 4156.

The safe haven of the bond market was a welcome destination for investors. The FNMA 3.5% bond we watch finished the week up .04, to $100.19. National average fixed mortgage rates went up a tad during the week ending March 27 in Freddie Mac’s Primary Mortgage Market Survey. This followed an uptick on the 10-year Treasury note. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… Since Freddie Mac began tracking mortgage rates in 1971, the all-time high was hit in October 1981, at 18.63%. That’s more than 4 times recent average 30-year fixed mortgage rates.
>> This Week’s Forecast

MANUFACTURING GROWS, SERVICES GAIN, JOBS GO FORWARD… This week gives us some fundamental reads on the economy in March. The manufacturing sector should continue to show growth, both nationally, measured by the ISM Index, and in the Midwest, recorded by the Chicago PMI. The ISM Services index is expected to reveal that sector expanding at a slightly higher rate. Friday’s Employment Report is forecast to feature just under 200,000 new Nonfarm Payrolls, an encouraging sign for sure.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Mar 31 – Apr 4
Date
Time (ET)
Release
For
Consensus
Prior
Impact
M
Mar 31
09:45
Chicago PMI
Mar
60.1
59.8
HIGH
Tu
Apr 1
10:00
ISM Index
Mar
54.1
53.2
HIGH
W
Apr 2
10:30
Crude Inventories
3/29
NA
6.619M
Moderate
Th
Apr 3
08:30
Initial Unemployment Claims
3/29
320K
311K
Moderate
Th
Apr 3
08:30
Continuing Unemployment Claims
3/22
2.850M
2.823M
Moderate
Th
Apr 3
08:30
Trade Balance
Feb
–$39.5B
–$39.1B
Moderate
Th
Apr 3
10:00
ISM Services
Mar
53.5
51.6
Moderate
F
Apr 4
08:30
Average Workweek
Mar
34.4
34.2
HIGH
F
Apr 4
08:30
Hourly Earnings
Mar
0.2%
0.4%
HIGH
F
Apr 4
08:30
Nonfarm Payrolls
Mar
197K
175K
HIGH
F
Apr 4
08:30
Unemployment Rate
Mar
6.6%
6.7%
HIGH

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The Fed said it’s now watching a range of economic indicators to decide when to raise the Funds Rate. Economists believe that data will not inspire the central bank to act this year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Apr 30
0%–0.25%
Jun 18
0%–0.25%
Jul 30
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Apr 30
<1%
Jun 18
<1%
Jul 30
<1%

Market Watch

QUOTE OF THE WEEK… “One who stops being better stops being good.” –Oliver Cromwell, English military and political leader

INFO THAT HITS US WHERE WE LIVE… Last week, we who work in the housing market were given more opportunity to be better, as February Housing Starts dipped 0.2%, to an annual rate of 907,000 units. But wait, as they say on the infomercials. All the dip camp from multi-family units. Single-family starts were actually UP 0.3%. With the ground frozen or snow covered in much of the country, builders still stayed busy inside. As evidence, completions shot up 4.4% in February and are up 21.9% over a year ago. Anticipating a good spring, builders pushed Building Permits up 7.7% in February.

The 4-month moving average for Housing Starts is the highest since July 2008. Some economists feel the underlying trend for home building is upward and should remain that way for a couple of years. February, however, saw Existing Home Sales dip 0.4%, to a 4.60 million annual rate. But these closings came from contracts signed when harsh weather was slowing many markets. A lack of inventory has also been sending buyers to new homes. But median prices are up 9.1% annually, encouraging more sellers to list, and inventories were up 120,000 units in February, so existing home sales should rebound in March and April.

BUSINESS TIP OF THE WEEK… Treat each client as if she were your only client. When you’re working for her, focus on solving the problem at hand and tune everything else out.
>> Review of Last Week

FED, UP… Two words are all it takes to recap the week’s financial highlights. The Federal Reserve met and the three major stock indexes ended the week up. Following her first meeting as Fed Chair, Janet Yellen hinted that the central bank could start raising rates six months after its bond-buying program ends, which is still a long way off. But there will be no key data point to trigger a rate hike. Instead, Yellen said the bank would use a “wide range of information,” including data on jobs, inflation, and the financial markets. This disturbed investors, who don’t like to see the Fed exercising its judgment without clear guideposts.

However, enough positive economic data came in to keep Wall Street players pushing equity prices up. The Philadelphia Fed and NY Empire indexes, measuring manufacturing sentiment in those regions, both topped forecasts. Industrial Production and Building Permits also beat estimates. Misses included February Housing Starts. It was also disappointing to see Weekly Initial Unemployment claims edge up by 5,000, to 320,000, while Continuing Unemployment Claims drifted up to 2.889 million.

The week ended with the Dow up 1.5%, to 16303; the S&P 500 up 1.4%, to 1866; and the Nasdaq up 0.7%, to 4277.

The Fed tapered its bond buying by another $10 billion, and this reduction in demand sent bond prices south. The FNMA 3.5% bond we watch finished the week down .87, to $100.15. Freddie Mac’s Primary Mortgage Market Survey saw national average fixed mortgage rates drop a little during the week ending March 20. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… When the U.S. had a bubble in housing in 2003–2005, 30-year mortgage rates averaged 5.8%. Even though rates have edged up in the past year, they’re still nowhere near that level today.
>> This Week’s Forecast

NEW HOME SALES AND PENDING HOME SALES SLIP, GDP SOFT, INFLATION OK… It’s expected that both New Home Sales and Pending Home Sales will be down a tad for February, two more data points diminished by the winter weather, no doubt. The GDP, 3rd Estimate, is forecast to show U.S. economic growth was still slow in Q4, well under 3%. At least inflation is predicted to remain benign, Core PCE Prices holding at 0.1%.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Mar 24 – Mar 28

Date
Time (ET)
Release
For
Consensus
Prior
Impact
Tu
Mar 25
10:00
Consumer Confidence
Mar
78.2
78.1
Moderate
Tu
Mar 25
10:00
New Home Sales
Feb
445K
468K
Moderate
W
Mar 26
08:30
Durable Goods Orders
Feb
1.0%
–1.0%
Moderate
W
Mar 26
10:30
Crude Inventories
3/22
NA
5.850M
Moderate
Th
Mar 27
08:30
Initial Unemployment Claims
3/22
330K
320K
Moderate
Th
Mar 27
08:30
Continuing Unemployment Claims
3/15
2.900M
2.889M
Moderate
Th
Mar 27
08:30
GDP – 3rd Estimate
Q4
2.6%
2.4%
Moderate
Th
Mar 27
08:30
GDP Deflator – 3rd Estimate
Q4
1.6%
1.6%
Moderate
Th
Mar 27
10:00
Pending Home Sales
Feb
–0.2%
0.1%
Moderate
F
Mar 28
08:30
Personal Income
Feb
0.2%
0.3%
Moderate
F
Mar 28
08:30
Personal Spending
Feb
0.3%
0.4%
HIGH
F
Mar 28
08:30
PCE Prices – Core
Feb
0.1%
0.1%
HIGH
F
Mar 28
09:55
U. of Michigan Consumer Sentiment – Final
Mar
80.0
79.9
Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Last week Fed Chair Janet Yellen’s comments led many economists to believe the central bank might start raising interest rates by the middle of 2015. That’s still more than a year away. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Apr 30
0%–0.25%
Jun 18
0%–0.25%
Jul 30
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Apr 30
<1%
Jun 18
<1%
Jul 30
<1%

Market Watch

QUOTE OF THE WEEK… “The unexamined life is not worth living.” –Socrates, classical Greek philosopher

INFO THAT HITS US WHERE WE LIVE… Following the Socratic teaching, let’s examine life in the housing market. A research firm serving the mortgage industry reported that national home prices are growing slowly but staying in line with inflation adjusted long-run averages. They say this shows prices have normalized and future growth rates will look like historical ones, up between 3% and 5% per year. The firm’s vp of research and analytics added, “Nationally, we don’t see evidence of a price bubble forming again. Double digit gains over the last year, while similar to rates of growth in the run-up to the bubble, are off a much lower price floor.” Good point.

Low inventory has been a challenge in some markets, so it was encouraging to see a national real estate site report inventory up in 22 of its 35 largest metros. The National Association of Realtors (NAR) put inventory up 7.6% year-over-year in January. All this is the result of higher home prices, yet more inventory should mean slower price increases. Finally, realtor.com revealed its number of for-sale listings was up 3.1% year-over-year in January. The site’s president commented, “this early rise in inventory is a welcome trend.” Basically, analysts expect less-frenzied conditions for buyers and higher sales volumes in the months ahead.

BUSINESS TIP OF THE WEEK… Know when to hire outside help so you can dedicate yourself to the tasks that have the most impact, the ones that really matter.
>> Review of Last Week

“RATIONAL OPTIMISM”… Friday, the S&P 500 closed at a new record level, the latest in a string of record closes for the broadly based index. In addition, the Dow closed up for the second week in a row, while the tech-heavy Nasdaq posted its fifth straight weekly gain. All this investor enthusiasm was put to “rational optimism” by one market observer, who was referring to Wall Street’s reaction to the better-than-expected Employment Report. 175,000 Nonfarm Payrolls were added in February, the biggest gain in three months, and Hourly Earnings moved up 0.4%.

The unemployment rate also ticked up, to 6.7%, because more people came into the labor force. However, more folks looking for work can be seen as a good thing, since it shows people feel more jobs are available. There were mixed messages from other parts of the economic picture, as the trade deficit crept up to $39.1 billion in January and ISM Services reported less-than-expected growth in that sector in February. Yet Personal Spending came in higher than forecast, showing the consumer continues to contribute and the ISM Manufacturing Index also bested growth estimates.

The week ended with the Dow up 0.8%, to 16453; the S&P 500 up 1.0%, to 1878; and the Nasdaq up 0.7%, to 4336.

Some of the money flowing into stocks of course came from investors unloading their bonds, sending those prices lower. The FNMA 3.5% bond we watch finished the week down .94, to $100.18. Freddie Mac’s Primary Mortgage Market Survey reported national average fixed mortgage rates fell during the week ending March 6. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. The Mortgage Bankers Association said purchase loan applications were up 9% for the week ending Feb 28.

DID YOU KNOW?… An average of 189,000 jobs a month have been added in the last year. At that rate, it will take until December 2018 to return to pre-recession employment levels, if you account for people entering the labor force as a result of population growth.
>> This Week’s Forecast

CONSUMERS CRAWL BACK, SENTIMENT HANGS IN… Consumers are expected to show evidence they’re staying in the game, as Retail Sales are predicted to slip back into positive territory for February. In line with this, University of Michigan Consumer Sentiment is forecast to remain at the decent level it’s been posting lately. It will be no surprise the Federal Budget will continue running a huge deficit, which doesn’t seem to bother too many in Washington.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Mar 10 – Mar 14

Date
Time (ET)
Release
For
Consensus
Prior
Impact
W
Mar 12
10:30
Crude Inventories
3/8
NA
1.429M
Moderate
W
Mar 12
14:00
Federal Budget
Feb
NA
–$203.5B
Moderate
Th
Mar 13
08:30
Initial Unemployment Claims
3/8
329K
323K
Moderate
Th
Mar 13
08:30
Continuing Unemployment Claims
3/1
2.925M
2.907M
Moderate
Th
Mar 13
08:30
Retail Sales
Feb
0.2%
–0.4%
HIGH
Th
Mar 13
10:00
Business Inventories
Jan
0.3%
0.5%
Moderate
F
Mar 14
08:30
Producer Price Index (PPI)
Feb
0.2%
0.2%
Moderate
F
Mar 14
08:30
Core PPI
Feb
0.1%
0.2%
Moderate
F
Mar 14
09:55
U. of Michigan Consumer Sentiment
Mar
82.0
81.6
Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Many economists now feel the Fed Funds Rate will remain at its super low level into next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Mar 19
0%–0.25%
Apr 30
0%–0.25%
Jun 18
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Mar 19
<1%
Apr 30
<1%
Jun 18
<1%

Market Watch

By: Sharon Campbell

QUOTE OF THE WEEK… “Never, never, never give up.” –Winston Churchill

INFO THAT HITS US WHERE WE LIVE… Not giving up on the U.S. housing market is clearly the right strategy. Additional proof of this came with latest New Home Sales report. Up a strong 9.6% in January, new single-family home sales reached a 468,000 unit annual rate. This was the strongest yearly rate since July 2008. So much for the notion that slightly higher mortgage rates are holding back home sales. This January boom in new home sales also supports the theory, reported here, that recent weaker existing home sales numbers were partially caused by a lack of inventory that drove buyers into new homes.

Pending Home Sales, a measure of contracts signed on existing homes, was up just 0.1% in January, foretelling modest sales growth a couple of months out. The January reading, however, was the first increase since last May. In other housing news, the Case-Shiller index of home prices in the 20 largest metros went up 0.8% in December and was up 13.4% for all of last year. The FHFA index of prices for homes financed with conforming mortgages was up also 0.8% in December, and is 7.7% ahead for 2013. Both annual home price gains were the largest seen since 2005.

BUSINESS TIP OF THE WEEK… A great communications exercise is to boil down your message to less than 30 words and just three key points. Being succinct is important, whether you’re chatting up a prospect or a member of the media.
>> Review of Last Week

A VERY PLEASANT FEBRUARY… For much of the country, February’s weather may have been horrible, but the climate on Wall Street was pleasant indeed, as stocks treated investors to strong monthly gains. The Dow’s 4% February rise was its largest monthly percentage gain since January 2013 and the Nasdaq’s 5% hike was its biggest since September. The S&P 500, with a 4.3% February gain, is finally positive for the year. This was all encouraging to see, given negative influences like Russia’s worrisome involvement with Ukraine and some disappointing economic reports.

That downer data was, as usual, mixed in with some good stuff. The Conference Board’s Consumer Confidence read missed expectations, but the University of Michigan’s Consumer Sentiment beat forecasts. Pending Home Sales came in lower than predicted for January, but New Home Sales surprised to the upside. GDP – Second Estimate had overall economic growth sliding to 2.4% in Q4, but January Durable Goods Orders were down less than expected. Finally, the Chicago PMI showed manufacturing continuing to expand in February in the Midwest, where the weather apparently has less economic impact.

The week ended with the Dow up 1.4%, to 16322; the S&P 500 up 1.3%, to 1859; and the Nasdaq up 1.0%, to 4308.

While stocks moved up, bonds didn’t do too badly either, as the mixed economic data kept some investors focused on safety. The FNMA 3.5% bond we watch finished the week up .88, to $101.12. For the week ending February 27, Freddie Mac’s Primary Mortgage Market Survey reported national average fixed mortgage rates edged up, while adjustable mortgage rates dipped slightly. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… The National Debt is the sum of all prior annual federal deficits. Since these are financed by government borrowing, the national debt represents all outstanding government debt.
>> This Week’s Forecast

CONSUMER SPENDING AND PRICES HANG IN, EMPLOYMENT HOLDS ON… The week begins with Personal Spending and Core PCE Prices data expected to show that consumers hung in there, contributing a smidge more to the economy in January, while inflation remained under control. The week ends with the January Employment Report, predicted to reveal job growth holding on to modest levels.

The ISM Index of manufacturing and ISM Services index are both forecast above 50, indicating continued, if slow, growth in February. The Fed’s Beige Book may give useful insights into the economic situation in the 12 Federal Reserve Districts across the country.
>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Feb 24 – Feb 28

Date
Time (ET)
Release
For
Consensus
Prior
Impact
M
Mar 3
08:30
Personal Income
Jan
0.3%
0.0%
Moderate
M
Mar 3
08:30
Personal Spending
Jan
0.1%
0.4%
HIGH
M
Mar 3
08:30
PCE Prices – Core
Jan
0.1%
0.1%
HIGH
M
Mar 3
10:00
ISM Index
Feb
51.6
51.3
HIGH
W
Mar 5
10:00
ISM Services
Feb
53.5
54.0
Moderate
W
Mar 5
10:30
Crude Inventories
3/1
NA
0.068M
Moderate
W
Mar 5
14:00
Fed’s Beige Book
Mar
NA
NA
Moderate
Th
Mar 6
08:30
Initial Unemployment Claims
3/1
338K
348K
Moderate
Th
Mar 6
08:30
Continuing Unemployment Claims
2/22
2.973M
2.964M
Moderate
Th
Mar 6
08:30
Productivity – Rev.
Q4
2.5%
3.2%
Moderate
F
Mar 7
08:30
Average Workweek
Feb
34.4
34.4
HIGH
F
Mar 7
08:30
Hourly Earnings
Feb
0.2%
0.2%
HIGH
F
Mar 7
08:30
Nonfarm Payrolls
Feb
163K
113K
HIGH
F
Mar 7
08:30
Unemployment Rate
Feb
6.6%
6.6%
HIGH
F
Mar 7
08:30
Trade Balance
Jan
–$37.3B
–$38.7B
Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Last week, Fed Chair Janet Yellin let Congress know that the Fed Funds Rate could stay where it is long after the unemployment rate reaches the central bank’s target. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:
Consensus
Mar 19
0%–0.25%
Apr 30
0%–0.25%
Jun 18
0%–0.25%

Probability of change from current policy:

After FOMC meeting on:
Consensus
Mar 19
<1%
Apr 30
<1%
Jun 18
<1%

Important Ins and Outs

By : Mari Takeshita

Do I need 20% down? For a primary residence, you only need 3.5% down for an FHA loan, 5% down for a conventional loan, and $1,000 down for a CHFA loan. VA loans don’t require any money down.
Who pays my real estate agent? The seller pays for both real estate agents – the agent representing the seller and the agent representing the buyer.

Is the earnest money in addition to the down payment? NO – the earnest money is subtracted from the down payment at closing.

Is the inspection the same thing as the appraisal? The inspection is to determine what kind of shape the house is in, and the appraisal is to determine the value of the house. The buyer orders the inspection and the lender orders the appraisal.

If the house doesn’t appraise for the sales price, do I still have to buy the house? No. You can either pay the difference between the sales price and the lower appraised value in cash (not the smartest thing to do because the house isn’t worth it), you can walk away from the deal entirely and get your earnest money back, or the seller can lower the sales price to the appraised value of the home.

Cell – 303.941.MARI (6274)
Fax – 720.208.0215
Cherry Creek Properties, LLC

Use Your Resources

By : Mari Takeshita

In today’s market, it’s not enough for real estate agents to just do their jobs anymore. We should also prove to clients that we are trustworthy and know what we are doing. Buyers are hungry for information and can be wary of the home-buying process. And considering the market volatility in the not-so-distant past, who can blame them? Build trust and assuage buyers’ fears with these five ways to prove that we on their side.

1. Anticipate Their Questions

First-time buyers have a lot of the same questions, so I make sure to brief them on the steps of the transaction from beginning to end, including things like home inspections. Fill them in on everything they will want to know, need to know, and haven’t even thought to ask.

2. Remove the Element of Surprise

Part of prepping buyers for the home-buying process is filling them in on all the associated costs, both in time and money. I let them know when they’ll need to show up in person, such as during inspection, and when they’ll need cash, like at closing. It’s also important to manage buyers’ expectations. For example, if it’s common in the area for buyers to make offers on multiple homes before they’re successful, you need to know so you can mentally prepare for possible disappointment. That way you won’t feel like your hopes are getting crushed if you keep losing out on their “dream” homes, and so that you also won’t think I am not doing a good job.

3. Share Your Expertise

As an agent, I have a crucial tool at your disposal: Experience. As much as buyers might think they know about the home-buying through reading or talking to their friends and family, you haven’t lived it the way I’ve experienced it. I prove that I have your best interests in mind by helping my clients learn from the mistakes I’ve seen other buyers make.

4. Let Them Know It’s OK to Be Nervous

It’s completely normal to panic at some point during the process of buying a home. In fact, it’s abnormal for buyers to not get worried about making such a major purchase. Some trepidation is expected (especially at certain points in the process, like right before they sign the offer), and you shouldn’t misinterpret it as a sign that they should back out of the deal.

5. Back Up Advice With Data

Buyers might balk at suggestions, but they can’t argue with cold, hard numbers. So, for example, I tell buyers that homes in the area are selling over list price, back that up (and help them understand what that means) with a price-to-sale price ratio. Also explain that if their limit is $300,000, you should start looking at homes as low as the $250,000 range to increase their chances of making a successful offer.