October 29th, 2014
- Rates fell to their lowest level in more than a year in the past week.
- Freddie Mac announced that for the week ending October 16, 30-year fixed rates fell to 3.97% from 4.12% the week before.
- The average for 15-year loans decreased to 3.18%.
- Adjustables were also down, with the average for one-year adjustables falling to 2.38% and five-year adjustables decreasing to 2.92%.
- A year ago, 30-year fixed rates were at 4.28%, higher than today’s levels.
- Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans were down sharply following the decline in the 10-year Treasury yield for the second straight week. Rates are at their lowest levels since June 2013 amidst continued investor skepticism regarding the precarious economic situation in Europe.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.
October 25th, 2014
Enjoy the lower rates and lower gasoline prices while you can and for as long as they last. That might be a few days, a few weeks or a few months. Or the markets might reverse themselves by the time you read this commentary. However, good news for our nation has been seen throughout the markets which has led to an economic uplift. Less jobless claims, lower gas prices, interest rates that are amongst the lowest that this country has been privy to since the inception of recorded mortgage loans, and a hope for even better times in the future. It is that hope that we must all hold onto and recognize that although some may say “I remember when”, we must have the mindset of “just wait and see-things will get even better”. For mortgage rates to become even lower, there may need to be some drastic overseas turbulence which will chase foreign investors back to the US Treasuries as their safe haven for investing. That, or our government may require a renewed “mini stimulus package”- purchasing MBS and treasury bonds from within. We will wait together and see……. Call ABBA First and ask to speak to Rich for any other additional information on how you may be able to save money through a mortgage from us. We WILL treat you as we would like to be treated ourselves.
October 20th, 2014
In the past two weeks, economic events around the world have caused interest rates to hit their lowest levels in more than a year. For those who are thinking about refinancing their present home or purchasing, now is the time to act as there is no way to tell how long today’s low rates will last. The markets are very volatile, so those who hesitate may miss out on a golden opportunity. Even more good news, some credit standards have loosened and home prices have increased such that some who couldn’t refinance the last time rates hit this level may be able to do so now. In addition, the government program for underwater mortgages (HARP) has been extended and may help you even if your loan balance is more than the value of your home. These rates and higher home prices may enable you to eliminate costly mortgage insurance; reduce your payments or build equity faster with a 15 year mortgage. Whatever your goals, now is the time to get a consultation with your lender and act quickly if you can benefit from today’s low rates. Note: A consultation will take only a few minutes and it may result in significant savings. Please contact ABBA First Mortgage at 910-332-0650 quickly before the market turns again.
October 15th, 2014
Stock market selloffs, fears that Europe’s faltering economy will create drag for the rest of the world, and perhaps even the Ebola “epidemic” has helped drive down mortgage rates to their lowest levels in 16 months.
“Rates dropped to the lowest level since June 2013 on news that the Federal Reserve has more reservations about the health of the U.S. and global economy than expected, which in turn, may delay rate hikes,” said Erin Lantz, vice president of mortgages at Zillow.
Investors are seeking a safer place to park their money and are doing so in bonds and mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.
Low interest rates have also affected the volume of mortgage applications. According to the latest data from the Mortgage Bankers Association, applications increased 5.6% last week from the previous week.
“Growing concerns about weak economic growth in Europe caused a flight to quality into U.S. assets last week, leading to sharp drops in interest rates. Mortgage rates for most loan products fell to their lowest level since June 2013,” said Mike Fratantoni, chief economist at MBA. “Refinance application volume reached the highest level since June 2014 as a result, with conventional refinance volume at its highest since February 2014.”
October 13th, 2014
For years we have gone through a tepid recovery from a very deep recession. And all along we have indicated that we don’t recover from such an event if Americans are not working. Year after year we waited and waited. Well, the wait is over. The recovery in jobs is more than underway, it has arrived. The average of 220,000 jobs added each month thus far this year — and the unemployment rate dropping below 6.0% — is just what the doctor ordered in this regard. This is not to say that we are all the way back. Many of the jobs created have been lower paying jobs, which has held back the pace of personal income growth. In addition, the low labor participation rate tells us that if jobs keep getting created, we will have to absorb many returning to the labor market.
October 10th, 2014
“At current foreclosure rates, the shadow inventory could fall below 500,000 units by year-end, which could provide a solid boost to the recovery in housing in 2015.”
This is extremely positive for the future of the housing market. As foreclosed upon homes continue to drop, the inventory of new homes and future purchases to be made may begin to thrive as buyers become more positive about the economy and how it affects their bottom line dollar.
October 9th, 2014
Currently, Americans are experiencing the tightest credit market in 16 years. And according to a new report, they’ll have to wait at least three more years until it becomes easier to get a mortgage.
In a report published by New York City-based investment banking firm Keefe, Bruyette & Woods, three years is the minimum amount of time it will take for Congress to reach an agreement over the future of Fannie Mae and Freddie Mac. The GSEs own or guarantee almost half of all U.S. mortgages.
Credit availability is so tight that even former Federal Reserve Chairman Ben Bernanke can’t get his mortgage refinanced, despite earning a reported $200,000 to $400,000 for a speech. According to real estate information firm CoreLogic, credit availability for home purchases in May was about a third of what it was in 1998.
Following the housing bust, banks became hesitant about lending because they had to repurchase billions of dollars of bad mortgages they sold to Fannie Mae, Freddie Mac and private investors. Banks are afraid if they loosen their standards, the same thing will happen again and want legislation to protect them.
Banks aren’t the only ones who want protection; bond investors also want legislation to protect them from banks.
Earlier this year, Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) introduce a bill that would dismantle Fannie and Freddie and replace them with a new federal mortgage insurer.
The bill has received opposition and was thought to be dead in the water when six key Senate Democrats withdrew their support. The group said they felt the bill needed a major revision.
October 7th, 2014
Fixed rates were stable in the past week. Freddie Mac announced that for the week ending October 2, 30-year fixed rates eased to 4.19% from 4.20% the week before. A year ago, 30-year fixed rates were at 4.22%, slightly higher than today’s levels. The average for 15-year loans was unchanged at 3.36%.*
However, ABBA First Mortgage offers better than market rates for better than market clients. Today’s fixed rate for 30 year fixed rate mortgages start at 3.99% with no points and our fixed rate 15 year mortgage starts at 2.99% with no points. These rates include improvements both yesterday and today.
(*Rates indicated do not include fees and points and are provided for evidence of trends only.)
Please call ABBA First toll free at 1-866-676-3349 to obtain a customized quote showing what we can do for you to save you money!
September 30th, 2014
• Fixed rates eased back a bit in the past week after rising the previous week.
• Freddie Mac announced that for the week ending September 25, 30-year fixed rates eased to 4.20% from 4.23% the week before while ABBA First Mortgage, Inc has remained at better than market rates for our better than market borrowers (4.125% paying a credit towards closing costs on loans $100k and above).
• The average for 15-year loans also decreased slightly to 3.36%.
• ARMs were mixed, with the average for one-year adjustable rates remaining at 2.43% and five-year adjustable rates increasing to 3.08%.
• A year ago, 30-year fixed rates were at 4.32%.
• Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans were slightly changed with the rate on the 30-year fixed down three basis points. Meanwhile, existing home sales dropped 1.8 percent in August to a seasonally-adjusted annual rate of 5.05 million. Sales of new single-family homes surged 18.0 percent in August to an annual pace of 504,000 units. Also, the Federal Housing Finance Agency reported house prices rose just 0.1 percent on a seasonally-adjusted basis in July, and were up 4.4 percent over the past year.”
(Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.)
September 26th, 2014
The drop in stocks is adding a little support to the bond and mortgage markets although so far not a lot of improvement in rates and MBS prices given the strong declines in stocks this week. Investors and traders are wanting to think that a serious correction may be ahead; as long as that thought permeates there will not be much of a decline. The general consensus is still bullish for stocks; the bulls see the current decline as a buying opportunity, but another day like yesterday that thought will fade quickly.