Mortgage rates have fallen to the lowest level since May 2013, according to recent data released by Freddie Mac. The 30-year fixed-rate loan averaged 3.8% nationally this week, while the 15-year fixed-rate loan averaged 3.1% nationally. 10-year Treasury yields have also fallen to the lowest rate seen in 7 months. The vice president of HSH.com said, “plunging oil prices, due to a slowdown in Russia and other global economies, have been sending investors into safe havens like U.S. Treasuries. This is again driving down yields and pulling mortgage rates right along with them.” More here

December 09, 2014 Improving consumer attitudes are driving a more positive fourth-quarter outlook for the national housing market. Fannie Mae's October National Housing Survey revealed the economy's steady but unspectacular growth has continued to create a dynamic favoring sellers, whose property values have appreciated but are not likely to accrue significantly greater value anytime soon. Prospective buyers, on the other hand, are faced with limited inventory in many areas but are steadily gaining confidence from an improving job market and gradual average wage gains. The government-sponsored enterprise's survey revealed the share of consumer respondents who expect their financial situations to improve over the next 12 months increased, while the number of people who feel it's a good time to sell a home surged upward. As a Mortgage News Daily report noted, there was a downward shift in the the number of respondents who felt it was a good time to buy a house in October, perhaps as a result of the Federal Reserve concluding its bond-buying program. Sixty-five percent of Fannie Mae survey participants still feel it's a favorable buyers market, down from 68 percent in September. And while the former figure still represents a healthy segment of the consumer population, the month-over-month decrease may be a harbinger of perceptions to come. As the Fed inches closer to eventually adjusting the key funds rate - potentially as soon as the second quarter of 2015 - mortgage interest rates are expected to rise. That will likely compromise buyer affordability in the broad sense, as many market participants have snatched up historically low borrowing costs in 2014. Even if, as many analysts have predicted, the average 30-year fixed-rate mortgage climbs only to 4.5 percent by mid-2015, it's reasonable to expect more returns like those seen in Fannie's October survey going forward. In other words, there's a sense that buyers should move sooner rather than later so they can optimize their investment. Appreciation rates subsiding On the other hand, fewer survey respondents reported an expectation for home prices to rise over the coming 12 months, with 44 percent of participants expressing that sentiment. And though only 7 percent of respondents anticipate home values will decline nationally, prospective buyers worried about rising rates may find some relief in the fact that appreciation rates seem to have plateaued during the second half of 2014. "Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment," said Doug Duncan, Fannie's senior vice president and chief economist. "The share of consumers who expect their personal finances to get better is near its highest level since the survey's inception, while those expecting their finances to get worse reached a survey low. Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it's a good time to sell a home reached another survey high." Duncan also noted a more stable balance between buyers' and sellers' attitudes, which could portend healthier rates of home sales activity in 2015. Sales figures have been uneven for much of the past year, thanks to demand levels exceeding supply in a lot of local markets. That has encouraged the exaggerated appreciation seen in places such as the Bay Area, Boston, New York and Seattle, and - along with tight standards for mortgage credit approval - served to box out a number of would-be buyers. "The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand," Duncan said. "These results may help drive a healthier housing market in 2015." What about sales rates? As far as the economy's trajectory on a macro level, consumer opinions remain mixed. The central bank's continued moves toward scaling back stimulus have been based on progress toward stated employment and inflation goals, so there's an impression things have improved since the beginning of the year. Yet some of the public remains skeptical, it seems, as the number of respondents expressing a belief the economy is on the right track remained at 40 percent - unchanged from September. The latest data from the Mortgage Bankers Association, meanwhile, stated new home purchase applications increased in October, up an eye-opening 8 percent from September. A third-quarter report from the trade group also revealed mortgage delinquencies were down and home retention rates generally continued to improve. Both reports indicate consumers are better managing their household finances and gaining renewed confidence from the macroeconomic momentum. MBA President Mike Fratantoni surmised the increased application volume was in part due to three consecutive strong jobs reports. More than 200,000 jobs were added by nonfarm payroll employers each month in August, September and October, bringing the national unemployment rate to 5.8 percent.

In her press conference today, Fed Chairwoman Yellen clearly provided the Fed with more flexibility regarding interest rates. With GDP growth firming, unemployment falling and inflation benign, Yellen is hinting at maybe earlier but probably incrementally smaller rate hikes. And she has largely said that the Russian currency collapse and the bear market in oil are not worth worrying about. I still think the first rate rise is on 6/17/15. © 2014, Graphs & Laughs

4 Important Steps to Prepare for Homeownership By: Delvin Davis When a lot of consumers think of purchasing a home they think of the emotional side of ownership. While imagining where you will create milestone feel-good memories are important we can sometimes neglect the true cost aspects of preparing for such a large financial obligation. The following is a brief overview of what you can do today to ensure that you are in the best position possible to reap the many benefits of homeownership. Step 1: Obtain a good credit rating Every sport uses statistics to measure the performance ability of each individual participant to distinguish between success and failure. Consumer credit allows lenders to do the same thing by looking at your past performance, and your current situation. This enables banks, lenders, and financial service companies to get a uniform mathematical probability rating on how you will perform in the future. I've personally always liked to look at credit as your own personal score-card that validates your ability to repay people on time. It increases and decreases based on your performance, and the better you preform the more likely credit will be extended with the most favorable terms. Obtain a copy of your credit report for FREE Knowledge is power, and to obtain credible information is to be empowered. To obtain a good credit rating you must first become educated on your current credit situation. Since credit weights so important in today's economy the Fair Trade Commission (FTC) has designed a website were consumers can pull their own credit profile for FREE annually in order to monitor, evaluate, and dispute items listed on your personal credit report. http://annualcreditreport.com Validate Credit Information The next step would be to validate the debts and liabilities listed and dispute any inaccuracies listed on your report, and provide each credit repository or bureau documentation supporting the disputed item. Mistakes happen, and this will go a long way to improving your scores over a 3 to 6 months’ time period to ensure that you aren't being punished by inaccuracies listed on your credit profile. Pay Bills On-time The next and by far the most important thing you will need to do is to pay all bills and liabilities on time all-the-time to improve your performance levels. This is the greatest fundamental key to having a great credit rating. The credit bureau's measure credit by several categories (How many accounts are open, How much debt you have compared to your income, Request for new credit inquiries) the list goes on and on, but this category is 50% - 60% of decision matrix of their scoring system. Again, if you pay your bills on time every month your credit worthiness will improve. There are many myths that exist about credit and what constitutes a credit-worthy buyer, but if you know your credit history, pay all bills on time, and manage your current debts you will be strongly positioned to obtain the very best available financing lenders and banks have to offer. Step 2: Establish your home buying budget There are thousands of helpful websites, counseling services, and tools available to help you obtain a mortgage, but not a lot of information to help prepare homeowners for maintaining their home, and what to avoid the months following the purchase. This is why the next in step is to create a monthly home buying budget. Decreasing your Debt-to-Income Ratios Increases your CAMPACITY to repay While paying you bills on-time is the key to creating an excellent credit profile the management of debt ratios is also a deciding factor when lenders and banks receive your loan application. Debt-to-Income or capacity to repay is the difference between how much monthly debt you have paid out in comparison how much income you have going in. All lenders are different, but most mortgage guidelines today require a total debt ratio under 43% to be approved for a mortgage loan. This means you want to payoff smallest bills, and limit large financial commitments the months prior to obtaining a home loan. Once you review your FREE credit report you will be able to capture a snapshot of all your monthly liabilities, and begin working on reducing your monthly outgoing expenses. Check out Bills.com which offers articles, tools and solutions help people save time, money, and stress by addressing the everyday money issues faced by most of us... all for FREE! http://www.bills.com/ Step 3: Save money for a down payment, moving expenses, and the unknown In the world of credit finance the best terms, rates, and programs are available to those who have the most vested interested into the property. Whenever a lender reviews your asset portfolio they are going to first determine if you have enough money for a down payment, and secondly review how many months of cash reserves you will have to continue making payments once the loan is closed. Simply put lenders want to ensure that you will be financially suitable to continue to maintain the mortgage even when the unexpected happens. Bankrate.com offers a FREE Budgeting toolkit to help consumers create good habits to maximize savings in today’s economy. http://www.bankrate.com/finance/financial-literacy/budgeting-tools-tips-and-work-sheets.aspx Step 4: Pre-qualify for a home loan After you evaluate your credit profile, develop a monthly budget, and save for your down payment and reserves you will need to contact a mortgage professional who is licensed to do business in your state to be pre-qualified for your home loan prior to meeting with your realtor or making an offer on a property. When considering mortgage financing options researching a loan officer to validate your application is very important. The qualifications and experience of this individual will ultimately determine how much home you can afford, what programs you qualify for, and how much the financing of the property will cost. After the housing meltdown in the late 2000’s federal regulators created a system to ensure that there were minimum licensing requirements would be instituted for organizations, and individuals who originated mortgages moving forward. This system is called the Nationwide Mortgage Licensing System (NMLS). NMLS ensures that all loan companies meet state and federal standards for initial and ongoing educational, credit, assets, and bond requirements for the mortgage lending industry. Both the companies that lend, and the individuals who originate mortgages are assigned a Unique Identifier that’s posted on all correspondence not limited to websites, advertisements, and loan documentation. You will want to acquire both the individuals and the companies NMLS number, and go type this information into the register that will give you access to their active status, and any complaints made through state agencies about their origination activities. You can access the NMLS website for FREE at http://www.nmlsconsumeraccess.org/. You are now well on your way to making your Real Estate purchase dreams a realty. Happy House Hunting!!!! FREE Tools and Resources Receive FREE Annual Credit Report http://annualcreditreport.com Bills.com – FREE Online Budgeting Tools and Resources http://www.bills.com/ Bankrate.com – FREE Budgeting Toolkit http://www.bankrate.com/finance/financial-literacy/budgeting-tools-tips-and-work-sheets.aspx Nationwide License Mortgage System (Consumer Access) – Research Mortgage Professionals http://www.nmlsconsumeraccess.org/

Plunging gas prices at the pump led consumer prices lower in November, as reported by the Bureau of Labor Statistics. Big news out of Washington, D.C. today were headlines that the U.S. may be easing the embargo of Cuba that began in 1961. On the lighter side, Toys "R" Us announced it will extend its operating hours for 39 straight hours from 6 a.m. Tuesday December 23 through 9 p.m. on Christmas Eve.

During the holiday months, burglaries in the U.S. increase significantly according to the FBI. Taking a few extra measures to keep your home safe may help decrease your risk. A few things you can do to keep your home free from burglars are: Make sure all of your doors and windows are locked at all times. If you are visiting family or friends for a few days ask your neighbor(s) to watch over your house and get your mail for you while you are gone. Don’t leave hide-a-keys out, hand your spare keys out directly to trusted family members and friends. More here

OPEC's decision to push oil prices down assumes that lower prices reduce the supply of oil. However, unlike most natural resources, the marginal cost of producing another barrel of oil is low, once a well is drilled. Thus, oil pumping does not generally respond to price shocks. However, drilling new wells does. Thus, the future supply of US oil will depend almost entirely on how fast existing fracked wells deplete. © 2014, Graphs & Laughs

Warren Buffett Says Capitalizing on Todays Mortgage Rates is a No-Brainer

December 02, 2014

Even as the Federal Reserve's quantitative easing program nears the end of its tapering process, mortgage interest rates have remained remarkably low. In fact, as the fourth quarter began, falling rates were encouraging increased late-season activity from homebuyers. According to the Mortgage Bankers Association, mortgage application volumes were again on the rise to begin October, thanks primarily to still-favorable borrowing costs. The 3.8 percent week-over-week jump in applications included a 5 percent jump in the refinance share of activity, with the average contract interest on a 30-year fixed-rate mortgage falling to 4.30 percent for loans with 80 percent loan-to-value ratios. Rates have continued to drop amid recent stock market stagnation, nearing their lowest levels for the year and prompting many analysts and investors to tout the accommodative nature of the current buyer's market. Bloomberg reported Warren Buffett, billionaire investor and chairman of Berkshire Hathaway Inc., told a recent conference gathering in Laguna Niguel, California, there's no better time than the present to pull the trigger on a new home purchase. "You would think that people would be lining up now to get mortgages to buy a home," Buffett told attendees of the conference, hosted by Fortune magazine. "It's a good way to go short the dollar, short interest rates. It's a no-brainer. But so far home construction pickup has been slower than I had anticipated. Construction to come? Buffett's allusion to the need for more housing inventory is supported by the latest Commerce Department data for housing starts, which revealed sporadic activity to close the third quarter. Starts reached their highest annualized rate in nearly seven years during July, only to slump again after labor sector data revealed slow wage growth and a surprisingly modest number of jobs added in August. The 84-year-old Buffett, who heads an Omaha, Nebraska-based company with channels devoted to homebuilding, carpeting and masonry, among other trades, added he anticipates construction rates will pick up once more before year's end - a prediction buoyed by a strong recently released September jobs report. With enhanced household wealth and improved consumer sentiment, demand levels are expected to pick back up, theoretically supported by greater supply. Household formation falls off dramatically in a recession, at least initially Buffett said, adding that the low rate of national homeownership should not be considered a major long-term concern. But that doesn't last long. Hormones kick in and in-laws get tiresome, too." No time like the present Perhaps most promisingly, the recent fall from mortgage rates was preceded by nothing of note - if anything, signs have been pointing to a gradual uptick in borrowing costs, Mortgage News Daily reported. The Fed will complete its bond-buying program by the end of October, and the consensus expectation is for interest rates to rise incrementally over the next year. That still may prove true, and if it does, it only makes the current window that much more attractive for prospective buyers. The most prevalently quoted conforming 30-year fixed rate for the very best scenarios has moved quickly from being worryingly close to 4.375 percent to being excitingly close to 4.0 percent noted Matthew Graham of Mortgage News Daily. The most interesting thing about the movement the past two days is that there is no big-ticket headline motivating it. This is simply traders moving money for a variety of reasons. No one can know what all the motivations for that might be. In any event, the developments bode well for house hunters, who also have easing rates of home price appreciation and an improving job market working in their favor. How long the buyer-friendly environment will last remains to be seen, but as Buffett said, the reaction is to act.

Improving consumer attitudes are driving a more positive fourth-quarter outlook for the national housing market. Fannie Mae's October National Housing Survey revealed the economy's steady but unspectacular growth has continued to create a dynamic favoring sellers, whose property values have appreciated but are not likely to accrue significantly greater value anytime soon. Prospective buyers, on the other hand, are faced with limited inventory in many areas but are steadily gaining confidence from an improving job market and gradual average wage gains. The government-sponsored enterprise's survey revealed the share of consumer respondents who expect their financial situations to improve over the next 12 months increased, while the number of people who feel it's a good time to sell a home surged upward. As a Mortgage News Daily report noted, there was a downward shift in the the number of respondents who felt it was a good time to buy a house in October, perhaps as a result of the Federal Reserve concluding its bond-buying program. Sixty-five percent of Fannie Mae survey participants still feel it's a favorable buyers market, down from 68 percent in September. And while the former figure still represents a healthy segment of the consumer population, the month-over-month decrease may be a harbinger of perceptions to come. As the Fed inches closer to eventually adjusting the key funds rate - potentially as soon as the second quarter of 2015 - mortgage interest rates are expected to rise. That will likely compromise buyer affordability in the broad sense, as many market participants have snatched up historically low borrowing costs in 2014. Even if, as many analysts have predicted, the average 30-year fixed-rate mortgage climbs only to 4.5 percent by mid-2015, it's reasonable to expect more returns like those seen in Fannie's October survey going forward. In other words, there's a sense that buyers should move sooner rather than later so they can optimize their investment. Appreciation rates subsiding On the other hand, fewer survey respondents reported an expectation for home prices to rise over the coming 12 months, with 44 percent of participants expressing that sentiment. And though only 7 percent of respondents anticipate home values will decline nationally, prospective buyers worried about rising rates may find some relief in the fact that appreciation rates seem to have plateaued during the second half of 2014. "Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment," said Doug Duncan, Fannie's senior vice president and chief economist. "The share of consumers who expect their personal finances to get better is near its highest level since the survey's inception, while those expecting their finances to get worse reached a survey low. Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it's a good time to sell a home reached another survey high." Duncan also noted a more stable balance between buyers' and sellers' attitudes, which could portend healthier rates of home sales activity in 2015. Sales figures have been uneven for much of the past year, thanks to demand levels exceeding supply in a lot of local markets. That has encouraged the exaggerated appreciation seen in places such as the Bay Area, Boston, New York and Seattle, and - along with tight standards for mortgage credit approval - served to box out a number of would-be buyers. "The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand," Duncan said. "These results may help drive a healthier housing market in 2015."

Home builder sentiment across the nation edged lower in December, but still remains robust as 2014 comes to an end. In another sign that the U.S. economy has improved from the depths of the Great Recession, the Federal Reserve reported on Monday that factory production rose in November from October. Today is the busiest day of the shipping season for the U.S. Post Office and FedEx with just 10 days until Christmas.