What May Impact Mortgage Rates the Week of May 27, 2013

We are back to work following the Memorial Day holiday and mortgage rates are trending higher this morning. Mortgage interest rates are still at historically low levels, however they are off their extreme lows.

Yesterday, markets were closed in observance of Memorial Day. Here are some of the scheduled economic indicators that may impact mortgage rates this week:

  • Monday, May 27: Memorial Day
  • Tuesday, May 28: S&P/Case Shiller Home Price Index and Consumer Confidence
  • Thursday, May 30: Initial Jobless Claims, Gross Domestic Product (GDP), GDP Chain Deflator and Pending Home Sales
  • Friday, May 31: Personal Consumption Expenditures (PCE), Personal Income, Personal Spending, Chicago PMI and Consumer Sentiment (UoM)

This morning, the S&P/Case-Shiller Home Price Index for March revealed that year over year, home prices went up 10.9% based on the 20 City Composite. This is the largest increase to home prices since 2006. Seattle’s home prices, according to this report, were up 10.6% year over year.

As I write this post (6:52 am), the DOW is up 171 points and, as I mentioned earlier, mortgage backed securities (bonds) are getting beat up. Remember, investors will trade the safety of bonds for the potentially quicker return found with stocks. As the stock market continues to rally, you can anticipate mortgage rates to continue to trend higher.

You can still have a 30 year fixed rate in the “3’s” as of this morning…you’ll just have to pay more for it.  As of 7:00 am, I’m quoting:

3.875% priced with 0.719% in discount points based on a loan amount of $400,000 with a sales price of $500,000 (80% loan to value) and 740+credit scores (apr 4.005%). Based on a 30 year fixed rate for a purchase in greater Seattle closing July 5, 2013 or sooner.

DON’T FORGET: this is your last week to start an FHA loan and still have mortgage insurance that will terminate. FHA case numbers issued after this will have mortgage insurance on the life of the loan.

If you would like me to provide you with a mortgage rate quote for your home located anywhere in Washington state, where I’m licensed, click here.



S&P Case-Shiller reports homes prices up in Seattle

The  S&P/Case-Shiller Home Price Index was released this morning showing that home prices across the country are up 9.3% year over year through February based on the 20-City Composite. All 20 cities in the composite have reported increases in home prices over the last two months.

Some cites are experiencing double digit increases. Seattle’s home prices are up 9.3% year over year per this report.

SP Case Shiller Apr30

From the report:

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005….”

If you are considering buying a home in Seattle or anywhere in Washington state, I strongly recommend that you meet with a licensed mortgage originator and start the preapproval process early. I’ll often meet with home buyer six months to a year before they’re planning on buying a home. If I can help you, please let me know!

The Seattle – Bellevue – Everett area named as a Top 5 Place to Sell Your Home

Wall Street Journal’s Market Watch has named the Seattle – Bellevue – Everett area as one top five markets in the nation for selling your home. From the article:

Homes are flying off the market in Seattle. Listed properties spent a median of 56 days on the market as of January, down 38% from a year ago, according to Realtor.com. That’s almost half the median time homes are listed nationally….

….buyers have been left with a smaller number of homes to bid on, which in turn encourages multiple offers on properties that can push the purchase price higher than the asking price, experts say. There were fewer than 4,000 homes for sale in the Seattle metro area as of January, down 44% from a year prior, according to Realtor.com.  

This morning’s S&P/Case-Shiller Home Price Index also provides some positive data revealing that the Greater Seattle’s prices are up 8.2% year-over-year.

For hopeful home buyers, this means they need to make sure they have their ducks in a row before making an offer on a home. Home buyers in competitive markets like Seattle, Bellevue or Everett should contact a mortgage professional early on to start the preapproval process. The preapproval process typically only takes a day or two once the home buyer provides all the necessary supporting documentation. However it pays to get started early just in case there are situations that could be improved (such as credit scores, savings, etc.). 

The FHFA released their report on mortgage interest rates showing that rates trending higher since late November 2012 for the 30 year fixed conforming mortgage. If you’ve been following my rate quotes on Twitter, you may have realized this trend. Although rates are still very low, they are trending higher and have been for a few months.

If you are considering selling your home in the greater Seattle area, please don’t rule out buyers who are approved with FHA or VA financing. FHA and VA loans are much easier to underwrite and process in today’s market. In fact, they’re pretty much like a conventional mortgage. Plus buyers who qualify for FHA or VA loans are able to have higher loan amounts than conforming in our area.

Loan Limits for Seattle – Bellevue – Everett

Conforming: $506,000

FHA: $567,500

VA Jumbo: $1 million. $500,000 is the loan limit if the Veteran is looking for a zero down home. After $500,000, the down payment is 25% of the difference between the $500,000 limit and the sales price.

NOTE: Congress has been discussing rolling back loan limits. This is another reason to consider selling now if you have a home that would be impacted with reduced loan limits.

By the way, I have been in the real estate industry for just shy of 27 years. My first fourteen years were in the title and escrow industry and for the last 13 years, I have been a mortgage originator at Mortgage Master Service Corporation. I’ve worked with many real estate agents over my career and I’m happy to recommend one to you if you are considering selling or buying a home.