Market Report

Market information:

Generally quiet start early this morning but no improvement in the MBS or treasury markets even with US stock indexes aiming at a lower opening at 9:30. At 9:00 the 10 yr -2/32 2.41%, 30 yr MBS prices -5 bps from yesterday’s closes. At 9:30 the DJIA opened -15, NASDAQ -7, S&P -3; 10 yr unchanged at 2.41% while 30 yr MBS prices -6 bps in price.

 

Mortgage applications increased 1.4% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 15, 2014. The Refinance Index increased 3% from the previous week.  The seasonally adjusted Purchase Index decreased 0.4% from one week earlier.  The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 11 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 55% of total applications from 54% the previous week.  The adjustable-rate mortgage (ARM) share of activity increased to 7.8% of total applications. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.29% from 4.35%, with points increasing to 0.26 from  0.22 (including the origination fee) for 80% loans.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.18% from 4.24%, with points increasing to 0.23 from 0.19 (including the origination fee) for 80% loans.  The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.99% from 4.04%, while points remained unchanged at 0.03 (including the origination fee) for 80% loans.  The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.44% from 3.48%, while points remained unchanged at 0.30 (including the origination fee) for 80% loans.  The average contract interest rate for 5/1 ARMs decreased to 3.10% from 3.24%, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80% loans. 

 

Yesterday and Monday we got better housing data with the NAHB index gaining 2 points and July housing starts and permits twice as strong as forecasts. Starts up 15.7%, permits +8.1%. The better data set off a run of experts declaring the housing market getting back on track with the outlook much better. The MBA data this morning didn’t co-operate with those more positive reports on purchase apps, down 0.4%. The re-finance sector was widely declared as dead by a few housing experts, saying all re-finances have now been achieved; this morning MBA data showed re-finances increased 3.0% from the previous week.

 

This afternoon (2:00 pm) the minutes of the 7/30 FOMC meeting will be released. Always something to chew on with more specifics than we get when the meeting concludes with the policy statement. Likely the minutes will get a little ink, but with Yellen speaking Friday at Jackson Hole, the minutes are somewhat dated given the title of her speech is “The Labor Market”, following her remarks Mario Draghi will also speak on the EU economy.

 

Not likely MBS prices will improve today with treasuries still unwinding huge long positions. No geo-political reasons for short term traders to buy now, the issues are still out there but this week there has been no fearful news from Ukraine, and Putin is scheduled to meet next week with Ukraine leaders and EU countries. Some relaxation occurring now in Ukraine, Israel and Iraq; nothing really has changed, just not worsening. The fear factor into treasuries has ebbed this week. The economy is back in the headlights. As we noted last Friday, the bond market had become overbought basis the near term; since then prices have slipped and interest rates have Increased a little; the 10 yield up 7 bps from Friday’s close while MBS prices -36 bps since Friday’s close. Trading volume though is the lowest we have seen this year in both stocks and bonds ahead of Jackson Hole on Friday. The wider outlook is still bullish, a close over 2.48% will change the pattern and turn the 10 bearish from a technical perspective.

3 ways real estate agents can instantly increase their income

It’s that time of year again.

Every year it’s the same thing. The end of the year approaches, and brokers ask their agents to start thinking about next year, and they begin to encourage their agents to develop a business plan for next year. Were you happy with your work this year? Were you pleased with your closings? What will you do differently next year? These are the types of questions that you hear at the office meetings.

 

If you’ve been in real estate for any length of time, the preparation of the business plan and the encouragement to set goals is part of a cycle and the same questions arise about this time every year. The best agent I know believes that the only way to see loads of closings in January is to put loads of deals in your pipeline in September, October, and early November.
He believes that this will pump you up and get you motivated because you begin the year strong. Makes sense, right? If you start winding down around Thanksgiving, you may not have another closing until February. And, if you consider real estate your full time gig, it may be hard to make ends meet without those regular closings.

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3 Ways to Instantly Increase Your Income

If you are a residential specialist in your local area and you are looking to boost your income and your closings in 2014, there are many things that you could do to revise or adapt your current business model. Here are some things that you may want to add to your real estate bag of tricks:

1. Short Sales. If you are one of those people that hates the paperwork and the general dysfunction associated with working on a short sale, you may want to think again. According to RealtyTrac data, there are still 19 million borrowers that are underwater on their mortgages (25.3% of all homeowners with mortgages) that may need your help today. Consider marketing for short sale listings and co-listing with a short sale specialist.


2. Property Management. In the past six years, millions of homeowners have become renters. Consider the steady income associated with property management as a great way to pay the bills in good and bad economic times.


3. New Neighborhoods and Farm Areas. What’s the average sales price for your closings? Are there local neighborhoods that have a higher median sales price? Market in new areas where the median sales price is higher and you can increase (possibly making more money, while closing fewer transactions).

Of course, when considering ways to change your business plan, you have to give to get. If you expect to increase your income and your market share in 2014, you may need to spend time and money in order to get in front of the clients that you want. Don’t just sit around the office and wait for the phone to ring. With landlines becoming increasingly obsolete, there’s no excuse for sitting around anymore.

Credit to AG Beat

Homeowners benefit from tax credit for green remodeling projects

While uncertainty regarding the fiscal cliff may have had consumers concerned about the overall economy and how taxes would be affected, those who have purchased homes for sale in Los Angeles County and made eco friendly renovations could benefit from a tax credit that has been extended.

The American Taxpayer Relief Act pushed the $500 tax credit through the new year, so projects done in 2012 and in 2013 are eligible. The tax break itself , the non-business energy property tax credit, gives homeowners $500 off their taxes for making approved energy-efficient improvements. Some renovations include the installation of a new front door or other Energy Star labeled appliances and products.
Breaking down the credit, 10 percent of the cost of building materials, not including labor for insulation, windows and doors, greener roods, heat pumps, furnaces and corn-fueled stoves. In addition to savings when filing taxes, homeowners can expect to see reduced utility bills with these changes.

California home prices surge in April

Owners of Los Angeles real estate might have gained some equity in April, as home prices across California surged.

The median price for a home sold in the Golden State surpassed $400,000 for the first time in five years, rising from $378,960 to $402,760, according to the California Association of Realtors.
"The upsurge in the median price continues to be driven by an increase in sales in the upper- price range, where low inventory is less of an issue," said CAR vice president and chief economist Leslie Appleton-Young.

Prices have been on the rise in recent months, as buyer demand has far outpaced supply in the housing market. Part of the reason demand has been so high is the fact that mortgage rates have been near all-time lows.

However, mortgage rates jumped for the second consecutive week in mid-May, which could help ease demand a bit, but they are still well below averages seen a year ago at this time.
Fifteen-year fixed-rate mortgages rose to 2.69 percent in the week ending May 16, while 30-year loans hit 3.51 percent, according to Freddie Mac.

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