The Mortgage Man

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Archive for housing market

Foreclosures Up….Again

Nationwide foreclosure statistics continue to rise.

According to RealtyTrac, the number of foreclosures nationwide are up 14% over last month and over 121% over the same period last year.  For the 2nd quarter of 2008 there were more than 740,000 foreclosures filed nationwide.  That equates to more than 8000 foreclosure filings per day.

While this is a frightening statistic, there is a light at the end of the tunnel.  As we continue to see the bulk of foreclosures move through the system, a bottom in the housing market is eminent.  Some estimates claim that we will see a bottom before the end of the year.  For some areas of the country, the bottom has already come and gone.

This long term outlook is good for just about everyone except potential buyers.  Those who wait for a bottom before buying may very well lose any gains through the monthly payment as mortgage rates have now risen to the highest level in almost a year.  Over the last 9 months, we have seen the best buying opportunities available in decades, and those opportunities are going to become more scarce as we get closer to a bottom.

For those sellers still experiencing pain with their home, check out PreForeclosureFSBO.com.  There you can find resources to help sell your home through a short sale and avoid foreclosure with the help of a nationwide database of investors, and help finding a local professional to get the job done.

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Mortgage Rates Going Up With Stocks

Yesterday’s stock recovery could prove troublesome for mortgage bonds.

Stock traders had reason to smile yesterday as the Dow Jones made a huge bounceback.  Most analysts believe that it is not a long term recovery, but rather a temporary testing of the floor.  That being said, what is good for stocks is bad for bonds, and the stock recovery had an equal and opposite effect on bonds.

This morning, mortgage bonds are down sharply as the Dow Jones continues its bullish run upwards.  Because of this, it is highly suggested that you lock any outstanding mortgage rates if you have an active loan in process.

Housing starts came in for June at over 100,000 more than expected.  This is not necessarily a long term recovery, but more likely associated with recent building code changes in New York City that created a recent building boom for multifamily dwellings.

The real news is that after tremendous pressure in the financial sector on the stock market, JP Morgan Chase (the nations 3rd largest bank) reported their earnings higher than expected, even after a more than $1 billion write down for bad debt.  This is significant when most headlines are focused on the downfall of IndyMac rather than any underlying good news for the market.

Thursday June 26, 2008

Mortgage Bonds have likely hit the ceiling today.

The FED came out with the results of their meeting yesterday, and as expected they did not move rates from their existing level of 2%.  This comes on the heels of 7 straight rate reductions in as many meetings.  There is increasing opinion that the next meeting will likely bring a rate hike with it to help strengthen the dollar and thwart off the rise in oil prices.

Mortgage bonds are trading slightly higher today, but they are up against a top side resistance level.  With the state of the stock market, and an upward correction looming, it is unlikely that mortgage bonds will break through that level of resistance.  In addition, since we already know that typically what is good for stocks is bad for bonds, if there is a rally in stocks in the coming days, you can place your bets on the fact that bonds will go through a sell off.  This means that mortgage rates will rise and it would be a good idea to lock in soon (or at least be prepared to lock in) to protect yourself from upward movement.

Existing Home Sales for May cam in at 4.9 million, in line with estimates.  This is a good sign for real estate because it shows some stability even though the market in general is slower than in recent past.  It is also an affirmation that regardless of the doom and gloom you may hear in the media, people are still buying houses.

Here in Pensacola Florida, even though we are statistically the poorest county in the state, we had the highest increase in average sales for the first quarter of 2008 out of 19 metropolitan areas surveyed.  We are also holding steady at 350 to 400 sales per month.  Not where we would like it to be, but not too shabby either.