Archive for Lake Geneva mortgage
The Federal Open Market Committee begins a 2-day meeting today in the nation’s capitol. It’s the group’s third of 8 scheduled meetings this year. Mortgage rates are expected to change upon the Fed’s adjournment.
Led by Chairman Ben Bernanke, the FOMC is a 12-person, Federal Reserve sub-committee. The FOMC is the group within the Fed which votes on U.S. monetary policy. “Making monetary policy” can mean a lot of things, and the action for which the FOMC is most well-known is its setting of the Fed Funds Funds.
The Fed Funds Rate is the overnight interest rate at which banks borrow money from each other. It’s one of many interest rates set by the Fed.
However, one series of interest rates not set by the Fed is mortgage rates. Instead, mortgage rates are based on the prices of mortgage-backed bonds and bonds are bought and sold on Wall Street.
There is little historical correlation between the Fed Funds Rate and the common, 30-year fixed rate mortgage rate.
As the chart at top shows, since 1990, the Fed Funds Rate and the 30-year fixed rate mortgage rate have followed different paths. Sometimes, they’ve moved in the same direction. Sometimes, they’ve moved in opposite directions.
They’ve been separated by as much as 5.29 percent at times, and have been as near to each other as 0.52 percent.
Today, that spread is roughly 3.65 percent. It’s expected to change beginning 12:30 PM ET Wednesday. That’s when the FOMC will adjourn from its meeting and release its public statement to the markets.
The FOMC is expected to announce no change in the Fed Funds Rate, holding the benchmark rate within in its current target range of 0.000-0.250%. However, how mortgage rates in and around Lake Geneva respond will depend on the verbiage of the FOMC statement.
In general, if the Fed acknowledges that the U.S. economy as in expansion; growing from job growth and consumer spending, mortgage rates are expected to rise. If the Fed shows concern about domestic and global economic growth, mortgage rates are expected to fall.
Any time that mortgage markets are expected to move, a safe play is to stop shopping your rate and start locking it. Today may be one of those times.
Lake Geneva real estate mortgage markets were mostly unchanged last week, breaking a three-week winning streak. Wall Street grappled with surprising demand on Spain’s debt issuance and a series of weaker-than-expected data points on U.S. housing.
Conforming mortgage rates across Wisconsin rose slightly according to the weekly Freddie Mac Primary Mortgage Market Survey.
Nationwide, the 30-year fixed rate mortgage rate climbed 2 basis points to 3.90%. This rate is available to homeowners willing to pay 0.8 discount points and a full set of closing costs, where 1 discount point is equal to 1 percent of the borrowed amount. Once again, Walworth State Bank doesn typically charge any points on their loans.
Prior to last week’s survey, just 0.7 discount points were required.
This week, mortgage rates are expected to be volatile. There is a lot of economic data due for release, the Eurozone’s issues with sovereign debt remain unresolved, and the Federal Open Market Committee gets together for a scheduled, 2-day meeting.
On the data front, the week starts with Tuesday’s Consumer Confidence figures and the government’s New Home Sales report. Both have the power to move mortgage rates. The week then concludes with the Pending Home Sales Index; the GDP release; and a series of Treasury auctions.
With respect to Europe, demand remains strong for debt from Spain, but at much higher rates as compared to several weeks ago. The same is true for Italy. Both nations are feared to be at risk of default on their respective sovereign debt. It’s a similar situation to that which occurred in Greece throughout 2011.
Long-term, lingering concerns for Spain and Italy would likely help keep U.S. mortgage rates suppressed.
And, lastly, the Federal Reserve will make a statement to markets Wednesday afternoon. The Fed is the nation’s central banker and its post-meeting press releases have tremendous influence on bond markets, including those for mortgage-backed bonds.
By extension, therefore, the Federal Reserve’s statement has the power to move Lake Geneva mortgage rates.
If you’re shopping for mortgage rates, it’s as good of a time as any to lock with your lender. Rates have more room to rise than to fall.
According to the National Association of REALTORS®, March 2012 Existing Home Sales fell to 4.48 million units on a seasonally-adjusted annualized basis — a 3 percent drop from February.
An “existing home” is a home that’s been previously occupied or owned.
The weaker-than-expected Existing Home Sales data is the third such housing report this month to suggest a lull in the spring housing market. Earlier this week, homebuilder confidence slipped for the first time in three months and March Single-Family Housing Starts fell, too.
The news wasn’t entirely bad for home resales, however. Although total home units sold decreased, so did the number of homes available for sale. There were just 2.37 million homes for sale nationwide in March, a 2 percent drop from the month prior.
At the current pace of sales, therefore, the entire nation’s home resale stock would “sell out” in 6.3 months. This is the second-fastest pace since the housing market’s April 2007 peak.
A 6-month supply is widely believed to represent a market in balance between buyers and sellers.
So long as the two forces remain in balance, home prices should do the same. This is the law of Supply and Demand at work.
However, if home sales continue to slide and home inventory builds, buyers may find themselves with an edge in negotiations.
If you’re planning to buy a home in 2012, the long-term housing trend is still toward recovery. This season may be a good time to look at your options. Talk to your Lake Geneva real estate agent to see what’s available. Low mortgage rates may persist, but low home prices may not.
According to foreclosure-tracking firm RealtyTrac, foreclosure filings fell to 199,000 in March 2012, a 17 percent decrease from March 2011. Last month marks the first time since July 2007 that foreclosure filings numbered less than 200,000 on a monthly basis — a span of nearly 5 years.
The generic term “foreclosure filing” is used to group all types of foreclosure activity into a single reading. It includes default notices, scheduled auctions, and bank repossessions.
As in most months, foreclosure density varied by region. 6 states accounted for more than half of the nation’s repossessed homes in March.
- Florida: 13.6 percent of all bank repossessions
- California: 12.0 percent of all bank repossessions
- Georgia: 8.0 percent of all bank repossessions
- Michigan: 7.5 percent of all bank repossessions
- Arizona: 6.5 percent of all bank repossessions
- Illinois: 6.4 percent of all bank repossessions
- Wisconsin: 2.1 percent of all bank repossessions
At the other end of the spectrum, North Dakota and Washington, D.C. were home to the fewest bank repossessions, with 0.03% and 0.02% of the national total, respectively.
Also noteworthy is that the RealtyTrac report revealed that Nevada relinquished its title as Top Foreclosure State after 62 consecutive top-ranking months. In March, 1 in every 301 Nevada homes received some form of a foreclosure filing. The March rate was a nation-topping 1 in 300 in neighboring Arizona.
For Lake Geneva home buyers, today’s foreclosure market represents an interesting opportunity.
Homes purchased while in the various stages of foreclosure can often be bought at lower prices relative to homes not in foreclosure. It’s one of the reasons why foreclosed homes now account for 20 percent of all home resales.
However, don’t confuse less expensive for less costly.
Foreclosed homes are often sold “as-is” and may be in various stages of disrepair. Fixing a foreclosed home to make it habitable could wipe out the money saved on its price tag. Your best Lake Geneva real estate “deal”, therefore, may be a non-distressed home in sound, move-in ready condition.
If you’re buying foreclosures — or even considering it — be sure to talk with a real estate agent first. The process of buying a foreclosed property is different from buying a “regular” home. You’ll want somebody experienced on your team.
The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.
Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.
Today’s newspapers offer up an excellent example.
According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.
For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle.
A few published headlines include:
- U.S. Housing Starts Unexpectedly Drop To 5-Month Low (BusinessWeek)
- New Home Constructions Takes Pause (CNNMoney)
- A Delayed Winter For Housing (US World And News)
Although these headlines are accurate, they tell just half of the story.
Housing Starts did drop in March, but if we remove a subset of the data — structures with “5 or more units”; a grouping that includes condominiums and apartment buildings — we’re left with Housing Starts for single-family residences only. It’s this data that matters most to Lake Geneva home buyers and nationwide.
Few home buyers buy entire apartment buildings. Most buy single-family homes.
In March, single-family Housing Starts were down 0.2% from the month prior, or just 1,000 units on a seasonally-adjusted, annualized basis.
That’s hardly a drop at all.
As measured by the National Association of Homebuilders, the Housing Market Index dropped three notches in April to a reading of 25. The report measures homebuilder confidence in the newly-built, single-family housing market.
When the Housing Market Index reads 50 or better, it reflects favorable market conditions. Readings below 50 reflect unfavorable conditions.
According to the scale, not since April 2006 have housing market conditions have been deemed “favorable” but, recently, homebuilder confidence has picked up. Between September 2011 and March 2012, confidence doubled.
April’s reading remains that second-highest since 2007.
So what does “builder confidence” mean? The formula is a little bit tricky.
The Housing Market Index is actually a composite figure. It’s the combined result of three separate surveys sent to homebuilders monthly. The surveys ask about current single-family sales volume; projected single-family sales volume over the next 6 months; and current home buyer “foot traffic”.
The NAHB compiles the results into the Housing Market Index.
In April, builder responses worsened on all 3 questions:
- Current Single-Family Sales: 26 (-3 from March 2012)
- Projected Single-Family Sales: 32 (-3 from March 2012)
- Buyer Foot Traffic: 18 (-4 from March 2012)
At first glance, the data reveals a weakening market for newly-built homes and this may be true; we won’t know for another few months whether April’s confidence setback is an historical blip or the start of a trend. The change in builder psyche, though, is a change that today’s new Lake Geneva real estate home buyers can exploit.
Two months ago, builders expected 2012 to be a banner year for home sales. Today, they’re not so sure.
Buyers of new construction, therefore, may find it easier to negotiate with builders for price reductions, “free upgrades”, and/or other concessions. Plus, with Lake Geneva mortgage rates still resting near historical lows, financing a newly-built home is cheaper than at any time in recorded history.
The Spring Buying Season is underway. For buyers of new construction, there are deals to be found.
Lake Geneva mortgage markets improved last week as a global flight-to-quality continued. With Spain facing questions on its sovereign debt, investors continued to pare exposure to risky assets, sparking demand for the relative safety of U.S. government-backed mortgage-backed bonds.
As a result, conforming and FHA mortgage rates slipped for the third straight week last week.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage available to borrowers in Wisconsin is down to 3.88% nationwide with an accompanying 0.7 discount points plus “typical” closing costs.
Last week’s reported 3.88 percent rate for the 30-year fixed rate mortgage is within one-tenth of one percent of the lowest, average mortgage rates in Freddie Mac survey history. However, the last time conforming rates were reported in this range, the accompanying, required discount points were higher than last week’s 0.7.
Meanwhile, at 3.11% nationwide with 0.7 discount points plus closing costs, the 15-year fixed rate mortgage rate is equally low. It, too, set a record last week.
It’s a good time to be looking for a mortgage in Lake Geneva, Wisconsin. Rates and fees are great.
Last week, markets moved on momentum. This week, they’ll move on data. The economic calendar is busy.
- Monday: Retail Sales; Housing Market Index
- Tuesday: Housing Starts
- Thursday: Weekly Jobless Claims; Leading Indicators; Existing Home Sales
In addition, two Federal Reserve members offer prepared remarks Monday. They will be the last public Fed comments before next week’s 2-day FOMC meeting.
Lake Geneva mortgage rates remain low. Consider calling or emailing your loan officer to learn more about your current financing options.
After a brief surge north of 4 percent last month, Lake Geneva mortgage rates have settled down, near their lowest levels of all-time.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.
0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.
Lake Geneva mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.
This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.
The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Lake Geneva home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.
Of course, like all things in real estate, though, mortgage rates are local. Rates offered by banks varied by region.
Freddie Mac’s survey of 125 banks showed the following regional breakdown:
- Northeast Region: 3.88% with 0.8 discount points
- West Region: 3.85% with 0.8 discount points
- Southeast Region: 3.91% with 0.8 discount points
- North Central Region: 3.89% with 0.6 discount points
- Southwest Region: 3.90% with 0.8 discount points
The best mortgage “deals” are currently available to North Central Region residents. The most expensive loans are for those in the Southeast.
Relative to history, though, all mortgage rates look inexpensive. Conforming 30-year fixed rate mortgage rates have never been as low as they are today. It’s a bonus for home buyers because cheap mortgage rate yield cheap mortgage payments. Home affordability for Lake Geneva real estate shoppers remains near all-time highs.
If you’re unsure of whether now is a good time to buy or refinance, the answer is yes. Talk to your loan officer to review your mortgage options.
The typical U.S. taxpayer will receive roughly $3,000 in federal income tax refunds this year — an average of $250 per month. So, what would you do with an extra $250 monthly? This segment from NBC’s The Today Show offers some advice.
Whether you’ve already filed your annual taxes for 2011, filed an extension, or will squeak by on the deadline, you could probably be doing more with your taxes. The above video shares some tips. It’s four minutes of solid insight on tax refunds, tax withholdings, and reducing your household’s overall “bad debt”. There’s something for everyone.
Among the points covered in the tax refund piece:
- Consider changing your personal payroll exemptions so your 2012 refund is $0
- Remember that refunds are not “free money” — it’s your money. Spend wisely.
- Use your tax refund to fund retirement accounts
Advice is also shared about how to use your tax refund to fund a reserve account, or emergency fund. As a Lake Geneva real estate homeowner or home buyer, applying tax refunds to a savings accounts in this manner can go a long way. When you’re a homeowner, maintenance costs can be sudden and unexpected. A furnace can explode, for example; or, a roof could spring a leak. Having money set aside for crisis is essential.
Having a savings account will also improve your household’s long-term financial stability.
As a reminder, in most years, federal income tax is due April 15. However, with Tax Day falling on a Sunday and with the federal government closed for a holiday the following Monday, U.S. taxpayers in Wisconsin and nationwide get a reprieve until Tuesday, April 17, 2012.