Roseville Loan Expert

Today’s payroll flop — only 20,000 real jobs created in May — will take some time to settle all the way in. Immediately: 10-year T-notes are 3.22% (from 3.36% yesterday and 3.99% six weeks ago), and the best mortgages below 5.00%.

The payroll report has confirmation: new unemployment has held high for five months; May retail sales look soggy and auto sales flubbed in May.

In days ahead, the entire recovery camp from government to stock-pushers has more than explaining to do. It must change its mind.

All in one fur-ball: How can mortgage rates be so low, and home prices so low, home affordability the best ever measured, yet housing defies recovery? One unifying answer: credit. Not enough, and wildly too tight. The credit dearth is perfectly rational. At default rates like these, nobody knows what new loan is safe to make, and underwriting has been overtaken by hand-shaking, eye-glazed panic. The horrifying conundrum: new loans will inevitably produce new losses, yet without enough new loans, losses on existing ones will be greatly higher.

The good thing for us is hidden in the above. Rates are at all-time lows and home affordability has never been better, the perfect storm. And even though it may not seem like it, we’re lucky here in California. Throughout the rest of the country the loss of the $8,000 home buyer tax credit has taken it’s toll as purchase applications are down sharply from a month ago (even though prices are the same and rates are lower) but we have another $10,000 tax credit available to use here in California! The local Sacramento area market is actually looking up with an every so slight month-over-month and year-over-year price increases in housing. Uber-low rates, dropping unemployment rates, and value in home prices coupled with that free $10,000 tax credit available to many Californian homebuyers should help that continue until the economy and national housing starts to pick up as well.

The glass is half empty, but it’s actually more than half full. Somehow…

Not my words, but the title of a very interesting article in the new Businessweek by Marc Roth. Definitely worth the read as it not only applies to the market as a whole, but the greater Sacramento Real Estate Market as well…

Well, the storm has passed. The low 5’s are gone. Just as I warned last week, get on now or miss the buss entirely! We had a about a week to lock them in, most people that missed the mid-high 4’s while waiting for the mythical 4.5% monster decided to lock in with the best they could, some kept waiting to see the 4’s again.

Well, those 4’s may be gone for good. But to anyone in Sacramento still in the market and haven’t decided to lock in or not yet, it’s time to ask your professional (hopefully you’re working with a real pro that knows how to read the MBS market) for some guidance. All my clients in position to lock did so last week, and they are all happy about it! Some people are finally realizing what they hear on the news might not be as it sounds in the real world. They are also coming back to reality to realize that rates are still historically very low.

For the most qualified borrowers rates are back to the low 5’s, even to 5% with a slight discount fee. We don’t know how long they will stay here though, so take advantage while you can.

On another note my last post to Rosevilleloanexpert.com has received a lot of attention. I had no idea so many people were readng this blog! In less than 24 hours the post about the new credit card legislation had 5 trackbacks from credit-related websites around the country!

~Greg :: The Roseville Loan Expert

We’re back into the low 5 and even high 4% range today. Not the low-LOWS of earlier this year but close.

Who will take advantage of it? I know a lot of people that kept waiting and waiting for the mythical 4.5% creature to emerge but lost out on anything are thanking their lucky starts these rates are back. They passed on 4.75% and got nothing and are all calling in to lock at 5.25% now! They were too greedy then, but are smartly being just greedy enough to take advantage of what is available today…

~Greg :: Roseville Home Loan Expert

Finally some good news for the bond market!!! The bond market is up over 100 basis points today (that is a really good thing). If we can hold on to these gains and continue the trend we may be able to see mortgage rates that start with a 4 again this year. If/when that happens EVERYONE looking to buy a home in the Sacramento area better be ready to take advantage of it. It may be the last time those rates come around again for a long while, or forever!

On a more personal note, my son’s last day of school is today. Let me just say he is more excited about it than I am but I’m pretty exicted about it too!

~Greg :: The Roseville Loan Expert

http://www.sacbee.com/topstories/story/1903523.html

Even though the stock market is up today, over 100 points on the Dow, bonds improved as of closing as well. Treasuries made up nearly half of yesterday’s (Black Wednesday) losses and Mortgage Backed Securities tried to follow suit but couldn’t muster quite the same rally. That being said there are signs on hope that there will be a recovery and the low 5’s should be a reality for a while…

~Greg :: The Roseville Home and Loan Expert

Today we have seen the entire bond market take a huge hit. Mortgage Backed Securities and Treasuries are way down, and I mean WAAAAAYYYYYY down. We’ve seen the market off by 2 full basis points. Meaning as much as 0.75% to rates from just yesterday. I will keep an eye on things as they progress and let you know. For the time being, I’m just hoping they stop the bleeding.

~Greg :: Roseville Loan Expert

P.S. Rates are still very good. Anything sub-6% is very good and interest rates are definitely still in the 5’s. It may be that the days of fixed rates in the high 4’s are over, possibly forever. It will take quite a lot for mortgage rates to get back to where they were after the massive sell-off in bond land today.

In the news today: Warren Buffet said he is very optimistic about the future of the economy and sees signs of a turnaround in the real estate market. Making now the perfect time to benefit from today’s affordable home prices and historically low interest rates. (I’ll be preparing a special post about the Home Affordability Index and how it effects all real estate and loans in Rosville very soon) 

When your Realtor tells you “now is a good time to buy” they may just be trying to get you in the right frame of mind to get out there and become a homeowner, but they would also be right.  With home prices and mortgage rates at all time lows here in Roseville there really has not been a better time in recent memory. And it will change… As the economy recovers, both interest rates and housing prices will follow suit. Locking in current home prices as well as a low mortgage interest rate a buyer can’t go wrong. But don;t take it from me, take it from Mr Buffet!

-The Roseville Home and Loan Expert ~ Greg