The Business Roundtable’s recommendations are as follows:
· Keep mortgage interest rates at historically low levels (below 5 percent) for at least one year;
· Expand the current First-Time Homebuyer Tax Credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000 to a higher limit of either 10 percent or $15,000 for all homebuyers, remove the income restrictions and include all primary residence purchases for one full year;
· Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates;
· Make permanent the current temporary conforming loan limits; and
· Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
We believe targeted, demand-side solutions—such as the ones Business Roundtable is recommending—will provide a critical next step for a housing recovery that will help create jobs and boost the economy as a whole. To obtain a copy of the Business Roundtable press release and its Housing Working Group’s detailed recommendations, click here. To read an article that appeared in today’s online edition of The Wall Street Journal containing an interview about the Business Roundtable’s recommendations and why they are crucial to jumpstarting the housing market, click here.
Please understand that the legislative process is often a long and winding road that is hard to predict, but at some point in the future, we expect to call on you to make your voices heard in support of any new legislation in Congress that would advance these recommendations. We will communicate with you as these legislative opportunities occur—but for now, just know that we appreciate your support and are proud to be part of this initiative.
In other news this week, RealtyTrac released its foreclosure findings with positive news that foreclosure filings dipped 6% in May compared with April. But the news wasn’t all positive as the number is still 18% above this time last year. Essentially one in ever 398 homes received a foreclosure filing last month.
Here in Utah, the picture continues to be a bit more bleak. We are ranked No. 5 out of 50 states in foreclosure filings with 2,927 total filings or one in ever 316 households. Our numbers, however, are on the decline with a decline from April 2009 to May 2009 earning a 1.4% drop but from May 2008 to May 2009 earning a 115% increase. For a complete look at the USA Today story that ran on the figures, click here: http://www.usatoday.com/money/economy/housing/2009-06-10-may-home-foreclosures_N.htm#chart.
Now let’s take a look at this week in real estate:
- Davis County—The Bountiful office reports it must have been a full moon last week (full moon's make people a little goofy you know!) as both the Bountiful and North Davis offices had their share of transactional challenges. Funding problems, delayed underwriting, inspection problems, etc., seemed to be more prevalent than usual as Agents battled to hold transactions together. It seems that both buyers and sellers are a little more on edge and uncertain as transactions unfold. On the upside, we did see another decent sales week from both offices’ previous weeks’ sales had slowed significantly. I've had a few Agents comment that some of the buyers they are working with have been motivated by the recent uptick in rates, which seems to indicate that the attitude of "wait and see what happens" may be lessoning with consumers.
- Salt Lake County North—Our Salt Lake office reported that buyers had become accustomed to 4% interest rates and buyers were shocked to see the rates jump a full percent in one day. Many buyers returned to "fence sitting" hoping the rates will go back down. Once they realize they are not going down and that 5% is still a great rate, they will return to the market because consumer confidence is still strong. Many Buyers are taking advantage of both the $8K Federal First time Buyer tax credit and the Utah $6K Home Run grant but these grants are almost gone. There is lots of traffic at open houses and Internet leads which should convert to sales over the coming weeks! The Union Heights office reported the week was relatively stable form the previous week. We had several closings. The biggest factor is school is out which is driving new energy into the market.
- Salt Lake County South—Our Jordan Commons office reports working with mortgage brokers is becoming increasingly more difficult when adding the appraisal pool to the mix. Timeframes for appraisals are lengthening. Watch the dates! Working with Axiom gives buyers a better chance of closing on time. The issue I have been dealing with this past week has to do with lenders and appraisals. The particular lender that is being used is demanding that the loan be 100% approved before ordering the appraisal. The other requirement is that the buyer pay for the appraisal prior to the appraisal being ordered.
- Salt Lake County West—Our West Jordan office reports no real changes from last week.
- Tooele County—Our Tooele office reports listing inventory is identical to the last three weeks. Sales are up, but not robust and ratifies are consistent at about 16 per week. A lot of short sales are waiting third party blessing.
- Utah County—The market is definitely changed for the better. Agents that I have not seen with business for a long while are doing business. Experienced Agents are doing significantly more business.
- Weber County—The Ogden office reported new listings have decreased slightly. However, buyers are out and writing offers. Homes that are selling are ones that are accurately priced and competitive. Business was up this week slightly over the past weeks. Agents are reporting increased activity up to $342,000.
Commentary from Axiom Mortgage President Melissa Wright:
“Mortgage Rates have shot up over the past several weeks to levels not seen since last November. Homebuyers who have sat on the fence are now faced with rates up to a full point higher than they were just 3 weeks ago. Rates are still at historically low levels, but they can move upward very quickly. So why the sudden increase in rates after several months of extremely low and relatively stable rates? Simply put its supply and demand.
All the refinance activity that has occurred over the past several months is now hitting Wall Street as Mortgage Backed Securities (MBS). In addition, the U.S. Treasury has been auctioning off huge amounts of debt. The added supply, along with stronger than expected economic reports, mixed with inflation fears has forced Mortgage Rates up very quickly.
There is talk that the Fed may expand their MBS purchasing program when they meet later this month, but there is only so much the Fed can do when there is so much supply on the market. These elevated rates have slowed the flow of new refinance activity, which will eventually lead to less supply in the market and greater stability. Until then, volatile conditions will likely continue and rates could change very quickly. But remember: even with the recent uptick, we are still looking at incredibly low Mortgage Rates and it’s still a great time to buy.”
Visit our website to request your free weekly Market Watch Report at www.axiomfinancial.com.
I did want to let you all know that I will take a brief hiatus from Weekly Market Watch next week but will return the following week with another robust edition.
Until next week,
Make it a great one,
Dan Christensen
Coldwell Banker Residential Brokerage Utah
No comments:
Post a Comment