In August of 2009, there was 1256 NOD’s with 439 Foreclosures

In August of 2008, there was 1200 NOD’s with 853 Foreclosures

In August of 2007, there was  597 NOD’s with 186 Foreclosures

We could look at these numbers and think one of two things is happening.  One school of thought would be that the lack of foreclosures vs. the notice of defaults could mean that there simply are more short sales waiting to close.  Another prospective would be that the foreclosure numbers are low since the NOD numbers where low in months past. 

You see it takes about 4 months from when the NOD is filed until the property is lost back to the bank, becomes a foreclosure and ultimately a REO for sale by the banks.  The reason why the nod’s and foreclosure numbers where low in previous months was do to the moratoriums put on by the federal government and the state of California.  Now that theses moratoriums have been lifted more NOD’s have been filed.

Will this lead to more foreclosure property on the market?  We will just have to wait and see.

Sales of newly constructed U.S. single family homes rose for the fourth straight month in July and set their fastest pace since September 2008.  The Commerce Department said sales rose a staggering 9.6%.  That was the biggest monthly percentage gain since February 2005.  Additionally, inventories of unsold homes fell to their lowest level in 16 years.

This report came on the heels of last week’s existing home sales that jumped 7.2 percent.  There is no question that the housing market is making a comeback. The only question is:  Do you want to throw in your hat and purchase now while prices are still attractive, or later after they have already gone up?

What happened to rates last week:

We had a fairly stable week for mortgage backed securities as we closed +3 basis points better than at the beginning of the week.  We have been trading in a fairly narrow range.  This week’s economic news could finally break us out of our current trading channel.  I will be watching this for you.

What to watch for this week

The following are the major economic reports that will hit the market this week.  They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.

I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy.  I monitor the trading of Mortgage Backed Securities; the only thing conventional mortgage rates are based upon. So I know if there is going to be a trend reversal in mortgage rates.
Call on me anytime for an industry update.

Respectfully,

Dave Campagna

Plaza Loans

(408) 754-3846

dave@plazaloans.com

www.facebook.com/davecampagna

As I have reported over the last several weeks, the housing market has officially bottomed and has started its rebound.  With shrinking inventories and mild thirty year fixed rates there is only one more ingredient that is needed for housing to really move.  That last ingredient is employment. 

We had three employment reports that all showed some strength that surprised economists.  We stared the week off with the ADP report that showed job losses in the private sector fell from -463K to -371K.  We then had the Initial Jobless Claims come in at 38,000 less than previous week.  Our week was rounded out by Friday’s Unemployment Rate.  The report showed a rate of 9.4% which is well below the consensus estimates of 9.6%. It showed non-farm payroll declines of -247K vs. last period’s decline of -467K.

The employment sector is starting to go through what the housing industry did 3 months ago, it is still shrinking but it is building up strength and declining at slower rates.  As employment strengthens, demand for housing will naturally increase even further.

Many news outlets and economists are finally calling it an official housing bottom.  This is the result of the progress in the housing market over the past three months.  We added to that pool of positive housing news last week. 

The Case-Shiller Home Price Index showed that home prices were either flat or increased in 16 out of the 20 major markets that they monitor.  In a separate report, New Home Sales were up 11% which was the largest gain in over eight years.  While higher priced homes will continue to struggle for some time, mid to lower priced homes are really heating up.

What happened to rates last week?

We had a huge gain in mortgage backed securities last week which helped to push mortgage rates to their lowest levels in months.  The weak Initial Claims and GDP data along with a very successful 7 year Treasury auction combined to temporarily lower rates. We need to take advantage of these great rates before this rate rollercoaster changes again.

What to watch out for this week:

The following are the major economic reports that will hit the market this week.  They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises.

I monitor the trading of Mortgage Backed Securities; the only thing conventional mortgage rates are based upon. So I know if there is going to be a trend reversal in mortgage rates.

Contact me anytime for an industry update.

Dave Campagna
408-754-3846
dave@plazaloans.com

The National Association of Realtors reported that sales of previously owned homes increased at a faster-than-expected annual pace.  Existing home sales increased at a 3.6% rate and had its third straight monthly gain.

This is the first time since early 2004 that we have had three straight months of increasing sales and points to the housing market continuing to heat up.  They also reported that inventories of existing homes were down 0.7%.  With inventories declining and home sales increasing, now is the time to jump into the market before these artificially low home prices are history.

What happened to rates last week:

We had a slight gain in mortgage backed securities last week which helped to keep mortgage rates low.  But we did have another roller coaster week for rates.  30 year fixed mortgage rates dropped dramatically from Monday to Wednesday. This was mostly in reaction to comments made by Ben Bernanke that were somewhat anti-inflationary. But by the time consumers could react, we gave up all of those gains by Friday. This reversal was due to Thursday’s positive Initial Jobless Claims and Existing Homes Sales reports.

I know people are busy and it is virtually impossible for you to keep track of what is going on in the economy.  I monitor the trading of Mortgage Backed Securities; the only thing conventional mortgage rates are based upon. So I know if there is going to be a trend reversal in mortgage rates.

Call on me anytime for an industry update.
Respectfully,

Dave Campagna
408-754-3846
dave@plazaloans.com

The MBS market reacted positively to the released statement. At 9:45 EST, MBS prices were down -22BPS from yesterday’s close.  After the statement was released, MBS prices moved to +12BPS from yesterday’s close.  That is a +34BPS swing.  This gain is due mainly to the comments that appear to state that we will have a very low risk of inflation in the near term.  This is great for Interest rates because as MBS rise interest rates go lower.

Below is the complete text of his statement.  The following key points have helped MBS prices and are of interest to the mortgage industry:

-      Consumer price inflation remained subdued in the first six months of 2009

-      Decline in housing activity appears to have moderated (aka a “bottom”)

-      Output will increase slightly in over the remainder of 2009.  The recovery is expected to be gradual in 2010 with some acceleration in activity in 2011.

-      Inflation to remain at low levels through 2010

-      Later this week the Federal Reserve will issue a “proposal” (so not a ruling a this point) that will include new mortgage disclosures and new rules governing the compensation of mortgage originators.

What happened to rates last week:


Mortgage backed securities lost -121 basis points last week, which is a significant erosion and gave us some higher rates by the end of the week.  The positive economic and housing news last week put pressure on mortgage rates.  It is a natural function for mortgage rates to rise when an economy emerges from a recession.  While we are not sure when we will emerge from this recession (some economists believe we already have), it is certain that we will see some economic growth in the short term.  As this happens, it will put pressure on mortgage rates.  Do not wait to put in an offer on your home!  Take advantage of these great rates and low housing prices now!

Call on me anytime for an industry update.

Dave Campagna
(408) 754-3846
dave@plazaloans.com
www.facebook.com/dave.campagna
www.plazaloans.com/dave

More than interest rates, employment is the number one factor that affects housing demand. And with initial claims starting to wane, it is yet another positive sign for housing. Remember, the $8,000 tax credit for first time homebuyers (someone that has not owned a home in the past three years) will expire in November so you need to take full advantage of today’s temporary low home prices.

What happened to rates last week:
Mortgage backed securities gained +59 basis points last week which gave us some fantastic rates. On Wednesday we saw our best 30 year fixed rates since 05/26/2009. But we gave up a big portion of our gains on Thursday with the release of the Initial Jobless Claims Data. This data was very positive for the economy and for housing but put the squeeze on mortgage rates. Mortgage rates typically rise as the economy starts to recover. I will be keeping an eye on this for you.

I know you are busy and it is virtually impossible for you to keep track of what is going on in the economy. I monitor the trading of Mortgage Backed Securities; the only thing conventional mortgage rates are based upon. So I know if there is going to be a trend reversal in mortgage rates.

Also, the National Association of Realtors reported that for the fourth consecutive month, that pending home sales improved. And Freddie Mac reported that the average 30 year fixed interest rate fell last week from the previous week.

While real estate prices and trends are all local, it is clear that on a national basis we have leveled off. We need to get you into a home now before home prices start to move upward and while the $8,000 tax credit is still available.