ABBA First Mortgage News

Superbowl Commercial Promotes Mortgage Brokers

February 4th, 2020

Did you see it?  According to the commercial, it stated that working with a mortgage broker is FASTER, EASIER, and MORE AFFORDABLE.  This 30 second commercial was historic for the wholesale mortgage industry as it brought to light the fact that there is a better alternative for people looking to obtain financing for their home than the local bank.  It encouraged people to seek out and WORK WITH AN INDEPENDENT MORTGAGE BROKER. Although the commercial may have cost 5.6 Million dollars, to which I am truly grateful to the wholesale lender that promoted this ad, it shows that nationally, we believe in offering clients the BEST OPTION for financing of their most prized possession, their home!  When shopping for a mortgage, please consider ABBA First Mortgage for your best rates and terms, as more than a thousand of other clients have already done so.  Call us at 910-332-0650 for your free, no obligation quick rate quote and see for yourself why we have led the way as being one of the price leaders for nearly 15 years since our inception in 2005.

Improved rates tied to coronavirus outbreak

February 1st, 2020

Mortgage rates improved again today as the market continued to react to updates on the coronavirus outbreak.  For top tier scenarios, the average lender is now offering rates not seen since 2016, with the slight exception of a few hours during the beginning of September 2019.  Even then, today’s rates at least match Sept 2019’s rates on average.  In other words, today is tied for the lowest levels in more than 3 years.

To reiterate yesterday’s message: the persistent availability of such low rates depends on a few factors.  The biggest among those at the moment is the evolution of the coronavirus outbreak.  It’s definitely been responsible for the quick bump toward this week’s low levels, but the trade-off is that rates should experience quick upward pressure as soon as epidemiologists can confirm light at the end of the tunnel.

There’s some risk that we’re already seeing the first potential turning point this afternoon as the World Health Organization officially declared coronavirus to be a public health emergency.  That sounds like a bad thing, but it actually signals an intensification of efforts and resources to contain the virus.  The market reacted accordingly with bonds weakening (weaker bonds imply upward pressure on rates).  Fortunately, the weakness hasn’t spilled over from US Treasuries to mortgage rates yet, but that may not be the case tomorrow.  At the very least, risks of a bounce are elevated relative to where they have been so far this week.

Another piece of good news- Feds keep rates steady!

January 29th, 2020

As expected, the Federal Reserve announced today that it would maintain current interest rates. The news came in an announcement from the Fed’s governing body, the Federal Open Market Committee (FOMC), which concluded a two-day meeting today.

The FOMC did leave the door open for future rate moves, saying it would “continue to monitor” the economic situation as it assesses the appropriate target range for interest rates.

“Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent,” the FOMC said in a statement. “The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.”

The Fed cut rates three times last year.

Cash out refinance with a higher interest rate? YES!!!

January 29th, 2020

Americans are cashing out home equity by refinancing their home loans, even if it means they’re paying higher interest rates. Nearly 60% of cash-out refinancings in 2018 came with higher interest rates, the biggest share since before the financial crisis, according to a Wall Street Journal story citing data firm Black Knight. “For some homeowners, the trade-off is worth it,” the Journal story said. “While interest rates have crept up, they are still lower than what borrowers would pay if they tapped a credit card or home equity line of credit.” Boosted by refis, lenders originated $700 billion in home loans in the third quarter, the most since before the financial crisis, according to industry research group Inside Mortgage Finance. A big chunk of the cash-out refis were due to debt consolidation – specifically, paying off a home equity line of credit by rolling it into a first-lien. About $6.1 billion of HELOC debt was extinguished that way in the third quarter, the highest in almost two years, according to Freddie Mac data.

ABBA First Mortgage lowers rates again – BELOW the national average!

January 29th, 2020

For the week ending January 23, Freddie Mac announced that 30-year fixed rates moved down to 3.60% from 3.65% the week before. The average for 15-year loans decreased to 3.04% and the average for five-year ARMs moved down to 3.28%. A year ago, 30-year fixed rates averaged 4.45%, more than .75% higher than today. “Rates on home loans fell to the lowest level in three months and are about a quarter point above all-time lows. The very low rate environment has clearly had an impact on the housing market as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

A 13 year high in new home housing starts in December of 2019

January 21st, 2020

For those of you looking for a home to buy, keep your eyes open as across the nation (and hopefully in your locale), many hew homes are under construction.  If you’re in the market for that new home, Please call us here at ABBA First Mortgage and we’ll find the right contact for you that will notify you of the type of home that you are looking for and negotiate the right price with you and for you once it is completed.  This should assist you with the news that there was a strong rise in US housing starts in December to a seasonally adjusted annual rate of 1.61 million units, a new 13-year high.  Let’s take advantage of it in the new year as these homes come on the market.

The data from the HUD and Commerce Department shows a 16.9% increase in starts from the previous month with single-family starts up 11.2% to 1.06 million and multifamily up 29.8% to a 553,000 pace.

“The year ended on a high note with solid gains in single-family and multifamily production,” said Danushka Nanayakkara-Skillington, National Association of Home Builders assistant VP of Forecasting and Analysis. “And while the December estimates will likely be revised down, the trend moving forward is still positive.”

Call ABBA First Mortgage at 866-676-3349 toll free and allow us to do the work for you while we can also offer financing with low rates and fees as shown on our RATES page for NC at-

http://www.abbafirst.com/north-carolina-mortgage-rates-08.php

or for TN at-

http://www.abbafirst.com/tennessee-mortgage-rates-08.php

A brief look back at 2019

January 14th, 2020

On the market level, stocks had a great year in 2019, with the major indices gaining over 20%, despite slower growth. This could be attributed to lower interest rates which prevailed in 2019. Freddie Mac pegged the average 30-year fixed rate home loan at 3.9% for 2019, the fourth lowest average in the past 50 years. These lower interest rates also pumped up the real estate markets, as many took advantage of lower rates to purchase new homes or refinance their existing homes. In November, new home sales were 17% higher than one year ago. Of course, as we have seen, markets can turn on a dime and certainly the threat of the escalation of tensions in the Middle East provides an example of that possibility.

Rates fell due to Mid-East tensions in the past week, but started to rise late in the survey week as tensions eased. For the week ending January 9, Freddie Mac announced that 30-year fixed rates moved down to 3.64% from 3.72% the week before. The average for 15-year loans decreased to 3.07% and the average for five-year ARMs moved down to 3.30%. A year ago, 30-year fixed rates averaged 4.45%, more than .75% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Rates fell to the lowest level in thirteen weeks, as investors sought the quality and safety of the U.S. Treasury fixed income markets. The drop in interest rates, combined with the strong labor market, should propel a continued rise in homebuyer demand.”

ABBA First Mortgage has continued to offer some of the lowest rates and terms in both NC and TN.  Give us a call toll free at 866-676-3349 for your no obligation, free customized quote today.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Rates are stable- or are they?

January 8th, 2020

For the week ending January 2, Freddie Mac announced that 30-year fixed rates moved down to 3.72% from 3.74% the week before. The average for 15-year loans decreased to 3.16% and the average for five-year ARMs moved up slightly to 3.46%. A year ago, 30-year fixed rates averaged 4.51%, more than .75% higher than today. “The combination of improved economic data and market sentiment has led to stability in interest rates, which have hovered around 3.7 percent for nearly the last two months. The stability is welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market and other interest rate sensitive sectors. The low rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Looking forward to a prosperous and HAPPY NEW YEAR

December 31st, 2019
As we come to the end of the year, we can look back and see plenty of pot holes the economy had to overcome. But the economy did overcome the challenges and we had a very good year — for stocks, bonds and real estate. Of course, that is all old news. What we all want to know is what 2020 will look like. As in any year, there are a modicum of predictions. And none of these highly paid economists or analysts are likely to really be able to predict the future. But it is all interesting to see what they say.

For the U.S. economy overall, Kiplinger expects growth of 1.8% in 2020, compared with an expected 2.3% in 2019 and 2.9% in 2018. Business spending in the U.S. has been subdued by uncertainty about a trade deal, the fallout from Brexit and angst over the presidential election. But with unemployment at decades-long lows, consumers, who account for the bulk of the U.S. economy, remain a strong underpinning. Kiplinger expects the unemployment rate to inch up to 3.8% in 2020 from 3.6% in 2019, and the Fed to cut rates at least once early in 2020. “The economy is in a tug-of-war between geopolitical risk and the underlying resilience of the American household, plus the Fed,” says Mike Pyle, global chief investment strategist at BlackRock.

As far as real estate, sales of new homes probably will rise to a 13-year high in 2020 as the U.S. dodges a recession, according to Lawrence Yun, chief economist of the National Association of Realtors®. New-home sales probably will jump 11% to 750,000, according to Yun’s new forecast, which would be the highest reading since 2007. Sales of existing homes likely will increase 3.7% to 5.56 million in 2020, the highest tally since 2017, Yun said. “Some loosening in inventory will happen in 2020, and so we expect home sales to rise,” Yun said. “We’ll see an increase in inventory, but not any oversupply, so home prices should continue to move higher – our hope is in a much tamer fashion.”

Rates still slightly inching up

December 20th, 2019

Mortgage interest rates were somewhat higher again today–the 4th day in a row that we’ve been forced to observe such mildly unpleasant things.  Technically, this brings the average lender to the highest rates in more than a month, but it’s important to note how narrow the range has been and how mild the movement has been on most days.  Even if we add up all of the weakness after rates hit their best recent levels at the beginning of the month, the average lender is only 0.125% away from those lows.

Reassuring caveats aside, it’s still important to keep in mind that rates are still best described as being in a mild uptrend over the past few weeks and in a more volatile uptrend since September.  When it comes to planning on locking/floating rates, it makes more sense to be defensive (i.e. don’t assume rates will come back down until and unless they give us a clear indication that is what they’re doing).

Conclusion-Rates are “quite a bit” higher than the lowest of the lows that we have seen since they hit bottom.  I would estimate about the difference to be about .5% higher which seriously is not really that much higher.  Rates are also a “little bit higher” than where they were since we started talking about the rates going up or edging up.  That difference is only .125% which truly is very little, but as it continues to inch up, it shows this ongoing trend of slight deterioration to the rate.