56% of Home Buyers are First Time Buyers…..
by Tom on July 31, 2009
in Market Musings
Interesting survey from JD Power. A couple of thoughts on it:
- They say that it’s a sign that the market is returning to more normal activity. While it is more “normal” activity than the speculators, the lack of move up buyers is still a sign that the market is hurting.
- For a lot of the first time home buyers, it’s a calculation of the cost vs. rent. If they are planning on staying put and they can buy a nice house for similar to the cost of rent, why not?
- The move up buyers have, in my book, a different set of questions to look at.
Just food for thought…..
Tom Vanderwell
The study also found that the proportion of first-time home buyers increased considerably — to 56% in 2009 from 44% in 2008. Many of these first-time buyers may be attracted by improved home affordability and the perception of a strong buyer’s market. This presents both challenges and opportunities for real estate companies, JD Power said in its survey.“The presence of more first-time buyers is encouraging, as it indicates that the real estate market is returning to more normal activity, with fewer speculators,” Howland said. “However, real estate companies and agents must carefully manage first-time buyer expectations. Although these buyers may believe otherwise, they must still overcome the traditional barriers to purchasing a home, such as being able to fund down payments, closing costs and monthly payments.”
Wall Street – Why it happened…. Part 2
by Tom on July 31, 2009
in Market Musings, Videos
Remember, this is just their opinion and I’m not saying I agree 100% but it is good information…..
Mortgage Market Update
by Tom on July 31, 2009
in Market Musings, Mortgage Rate Updates
Quick view of the mortgage market today. Rates have softened a little bit on a couple of things:
- Gross Domestic Product for the 2nd quarter came in significantly less bad (but not good) than expected. That increases the financial markets perceptions that the worst is over.
- The Treasury Auctions from earlier this week went better than expected.
We are now entering the phase in the market where we’re waiting for the jobs report next Friday. Expect a lot of volatility and very little movement (market noise) until then. Expect the market to continue to try to sort out the difference between actual economic improvement and a slowing of the pace of decline.
Until then, my recommendation remains to lock all loans. The upside risk is worse than the downside potential.
Tom Vanderwell
Here’s a couple of the rates I’m quoting today:
Purchase – 30 year fixed, under $417,000, 30 day rate lock, 5.125% with 0 pts, conventional mortgage.
Purchase – FHA, 30 year fixed, 3.5% down, 30 day rate lock, 5.125% with 1 pt.
Refinance – 60 day rate lock, 80% loan to value, 30 year fixed, under $417,000, 5.5% with 0 pts.
All APRs available upon request
-1% is < 2.5%
by Tom on July 31, 2009
in Market Musings
Well, it’s a case of “not so bad.” GDP was expected to be down by 1.5% and it was only down 1%.
A couple of thoughts:
- If you recall the discussion we had earlier this week, the number that Fed Chairman Bernanke uses is a GDP of 2.5% for unemployment to remain stable.
- We hit a negative 1% GDP for the 2nd quarter of 2009. That’s a LOT better than than what had in the first quarter of 2009.
- But we’re still at 3.5% below what is needed to reverse the employment losses.
I don’t know if you have seen the cover of Newsweek, but I think it describes it quite well….
The U.S. economy contracted at a slower-than-expected pace in the second quarter as the slump in business and residential investment moderated sharply, according to government data on Friday that backed views the recession was winding down.
Wall Street – What Happened – Part 1
by Tom on July 30, 2009
in Education, Market Musings, Videos
An interesting video series on what happened by the Wall Street Journal…..
Parts 2 and 3 will run Friday and next Monday.
Home Crisis Investigation
by Tom on July 30, 2009
in Market Musings, Videos, house prices
I’ll admit, they twist things out of context, but that’s part of what makes it so funny…..
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Home Crisis Investigation | ||||
|
||||
House Prices – What to Watch For….
by Tom on July 30, 2009
in Market Musings, Market Report, house prices
This report from Radar Logic makes a couple of interesting points:
- Until we see what the normally seasonal downturns of the fall and winter look like, don’t put too much stock in the reports that have been coming out lately. Their point is that if the normal downturn in winter is less severe than average, that’s a sign that we’ve got a “footing” on a turn around.
- “Fear has turned to optimism” – that’s a pretty subjective description and I wonder whether it’s fear has turned to optimism or if it’s more a matter of investor greed. Prices have fallen to the point that people are willing to consider real estate again?
Is there enough data at this point to make a definitive judgment? Nope. Are things getting better? Certain characteristics of the market say that they are, but other characteristics (foreclosures, credit problems etc.) say they aren’t.
Stay tuned, it ain’t over yet.
Tom Vanderwell
Radar Logic pointed to home prices soaring in many markets beyond the expected levels, given historical seasonal patterns. This trend suggests price increases seen recently are due to something beyond simple seasonal swings.Along with strong gains in prices studied by Radar Logic, housing starts increased continually since the beginning of the year. Existing home sales rose steadily through the year and new home sales are also on the rise since March, indicating the gain in home sales is not due only to high foreclosure resales as buyers work through foreclosure inventory.
“While houses may sell at a discount from their peak values for years to come, the return to normal seasonal patterns suggests that sustainable appreciation could return to the market soon,” Radar Logic’s analysts said in the special report. “Attitudes have changed dramatically since last winter and the fear of many investors has turned to optimism.”
But the question remains whether the trend will continue through the approaching winter and the expected seasonal downturn, Radar Logic said. Buyers tend to retreat for winter and remain on the sidelines until February, when volume usually picks up again. The analytics company said observers should wait until winter passes to make judgments on the market, as any current recovery trends should become more apparent between now and next buying season.
“A positive sign to look for is a winter home-price decline that is less severe than would be expected given past seasonal price patterns,” the report concluded. “This would indicate that consumers’ confidence in the housing market is strengthening and that a strong upcoming buying season could be on the way.”
It’s Starting Tomorrow……
by Tom on July 29, 2009
in Market Musings, banks
Well, it starts tomorrow.
government regulations in the mortgage world.
thoughts for today:
in one post, it would be too long and too detailed to deal with
adequately.
changes that I’m going to be talking about are “my bank” regulated
changes because then it would look better for the industry as a whole. But I
can’t. These changes are government mandated and driven by Fannie and Freddie,
not “my bank.”
for what I’m calling “Straight Talk Lending.” I’ll be getting
you more details of that over the next weeks but let me tell you a couple of the
main “points” behind it:
-
We’re in a very dynamic and fast changing
mortgage world right now. What worked last week very well might not work next
week. -
Change creates confusion. Confusion creates
delays. -
Delays create
frustration.
Straight Talk Lending is a new
and improved way of:
-
Improving communication in the mortgage world
as we all adjust to the new changes that the government is putting
out. -
Reduce the frustrations that happen in the
mortgage world. (You’ll notice I didn’t say eliminate them – just reduce
them) -
Create a better understanding of the mortgage
world as it exists today. -
create a better understanding of what it takes
to get approved for a mortgage in today’s market.
I’ve sent this to you from my tvanderwell@straighttalkaboutmortgages.com
e-mail address for a couple of reasons:
-
It’s tied to my mortgage blog, Straight Talk About Mortgages,
which is where I share a lot of my thoughts about the mortgage
world. -
It makes it easier to send this to a number of
people from a technology standpoint.
If you know anyone else who might want to know
more about the changes in the mortgage world, feel free to forward this on to
them.
As we embark on a new era in mortgage lending, I
leave you with a promise. “I promise to keep you informed, to help you make
sense of the mortgage world, and to help you navigate it.”
Until next time,
Mortgage Market Update
by Tom on July 29, 2009
in Mortgage Rate Updates
Quick update – the Treasury auction that I was talking about earlier. Well, it didn’t go so good.
I expect we’ll see higher rates before the day is done.
Tom
Mortgage Market Update
by Tom on July 29, 2009
in Market Musings, Mortgage Rate Updates, Videos
