The end of summer is coming, unfortunately, the leaves will be turning and high school football games will be being played. Believe it or not, change is coming. As far as we are all are concerned, we are all used to change, especially in our industry. If fact with all of the changes that have happened in the real estate and finance arenas, we should be experts! In fact we should almost be chameleon-like!
|
|
|
Great financing options are still out there; however, it is more important that ever, to structure your customer's deals correctly from the beginning to make sure that they get through the ever tightening underwriting process. We are still having good success in succeeding in this area, because we have always done it that way!!! Is anyone sick of deals falling through because some finance person failed! Take control of your customer's finance!
The temperatures are hot and so are the real estate prices! We are buzzing with activity, but have patience; the lenders are all slow to the draw.
Market Comment
Mortgage bond prices rose slightly applying downward pressure on mortgage interest rates. Trading remained extremely volatile. Energy prices remained the focus. Inflation fears were fanned once again as oil prices hit record highs. Bonds found some support when the Dow Jones index continued to struggle. A relatively benign employment report did very little to move the financial markets.
For the week, interest rates on government and conventional loans fell by about 1/8th of a discount point.
The trade data Friday will be the most important event this week. The weekly jobless report will garner more attention this week than usual with the lack of other substantial data releases. Oil and stocks will also likely continue to factor into mortgage bond movements.
Credit Demand
Inflation is typically the most important focus for the mortgage interest rate market. Unfortunately, mortgage interest rates continue to be pushed around by the fear of inflation. Most of the recent increases in interest rates have come following stronger than expected data despite uncertainly regarding the strength of the economy.
The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them. Regardless of inflation levels, though, rising economic activity can increase the demand for investors' funds, and thereby lead to higher interest rates. Investors pulling money out of stocks and into bonds have recently helped mortgage rates.
The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction higher along with consumer spending and with that, consumer debt. The inverse is also true.
Analysts will monitor this week's consumer credit levels for any indications that consumers may be tapped out.
There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially the effects of rising energy prices. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility. Now is a great time to take advantage of rates at the still historically favorable levels.
I just met a couple who wanted to build a house in Prescott Wisconsin. She wanted it now and he wanted to build it himself. So I suggested a happy medium of providing a shell that included the electrical , plumbing, drywall and windows. They thought that was a great idea.
Just shows that we need to get creative in this market.
by Mary Jo Manzanares on November 4th, 2007
The house is a Victorian mansion that was once owned by Sarah Winchester, of the Winchester Rifle fortune. After being told by a fortune teller that she would live as long as she continued to build onto her home - she did just that! Continued to build. And build. And build. For 38 years!
|
"INFLATION IS AS VIOLENT AS A MUGGER, AS FRIGHTENING AS AN ARMED ROBBER, AND AS DEADLY AS A HIT MAN." ~ Ronald Reagan. And although you might not describe the effects of inflation in such strong terms yourself...rest assured that the effects of inflation have crept into your home, your gas tank and your wallet. And inflation is also the nemesis of Bonds and therefore home loan rates, because just like inflation erodes the value of the dollars you spend, inflation erodes the value of the fixed return a Bond provides. And last week, Bond pricing worsened on news of inflation, causing home loan rates to move higher by about .25% across the board and reaching the highest levels seen in weeks. The week was shortened by the Memorial Day holiday, but right out of the gates, inflation concerns abounded. The Consumer Confidence Report indicated that consumer inflation expectations are at an all-time high...meaning that consumers are seeing inflation as a real threat to their own financial situation. Rising energy costs and worldwide inflation fears continued to pummel Bonds lower - in fact, so low that they moved below a tough technical floor of support at the 200-Day Moving Average. This is important because Bonds have made a decisive cross over the 200-day Moving Average on only three separate occasions within the past three years. This means that barring a timely reversal, we are likely seeing a shift in the market towards higher home loan rates. Friday brought a little good news on inflation, as the Core Personal Consumption Expenditure (PCE) Index showed that inflation does remain within the Fed's comfort zone. While Bonds and home loan rates improved somewhat on the news, the trend for the week was definitely worse overall, as the big picture on inflation cost Bonds and home loan rates some hard earned ground. Nobody said we were in for a smooth ride.
|
|
Market Comment For the week, interest rates on government and conventional loans rose by about 1/4 of a discount point. The preliminary GDP data will be the most important event this week. Consumer confidence and the inflation data also have the potential to cause mortgage interest rate volatility. The bond market is closed Monday in honor of the Memorial Holiday. Expect market volatility when trading resumes Tuesday. LOOKING AHEAD Market conditions that often lead to mortgage interest rate volatility are thin trading and shortened trading weeks. If very few market participants are buying and selling bonds, the potential for short-term volatility is escalated. A large buyer or seller can execute trading orders that, without additional traders to buffer out the extreme buying or selling, can lead to swift market movements. In addition, shortened trading weeks have the potential to compress a week's worth of trading into fewer days. Bond traders often take defensive positions ahead of weekends and holidays to guard against unforeseen events that could possibly jeopardize their investments. This positioning can be beneficial or detrimental to mortgage interest rates. If investors sell stocks and buy mortgage-backed securities, mortgage interest rates will improve. However, if investors sell mortgage-backed securities and hold cash positions, mortgage interest rates will rise. Holidays can often result in volatility as trading resumes following the extended close. This week could result in market swings that are favorable or negative in nature. Considering the heightened possibility for mortgage interest rate volatility, a cautious approach to interest rate exposure is prudent. How's that for playing both sides of the fence!! Mortgage rates are still historically low and I don't like to talk interest rate risk when rates are historically low! Individual situation and choice will be the predominant factors in locking in rates this week. Have a good week and I hope you long Memorial Weekend was a good one!! |
We at Midwest Home Center will do as little or as much of the project that you need. From you participating in the project to Midwest Home Center doing it all and handing you the keys. CONTACT US!!!
During the last 35 years, Wisconsin Homes has maintained a tradition of striving to build the best homes on the market. That tradition coupled with the experience we've learned along the way has resulted in Wisconsin Homes becoming one of the largest and most trusted modular home manufacturers in the Midwest.
Wisconsin Homes is a privately owned company and its founders traditions of quality are taken seriously. Every year we focus on imrovements which protect the flexibility and quality strengths that separate us in the marketplace. As a privately owned company we work extremely hard to maintain the highest level of trust possible with our home owners. We believe building mutually beneficial relationships has been and will continue to be our most valuable assets. 
Whether you're in the market for a ranch, multi-section ranch, cottage, loft, cape cod, two-story home, townhome, commercial building, split level, split entry, duplex or an apartment building; Midwest Home Center is your answer. Aside from the 100's of standard floor plans available, a flexible factory environment allows for considerable customization of your home.
Contact us at http://www.midwesthomecenter.com/
Wisconsin Homes is a privately owned company and its founders traditions of quality are taken seriously. Every year we focus on improvements which protect the flexibility and quality strengths that separate us in the marketplace. As a privately owned company we work extremely hard to maintain the highest level of trust possible with our home owners. We believe building mutually beneficial relationships has been and will continue to be our most valuable assets.
Whether you're in the market for a ranch, multi-section ranch, cottage, loft, cape cod, two-story home, townhome, commercial building, split level, split entry, duplex or an apartment building; Midwest Home Center is your answer. Aside from the 100's of standard floor plans available, a flexible factory environment allows for considerable customization of your home.
Contact us at http://www.midwesthomecenter.com/
Mike Jones in Tucson From a lender's point of view, the modular home is no different than a site built home. They're a great way to go! I used to be a builder in a previous life, and have built 35 million dollars worth of residential properties
Roger & Carol Hillman, Siren, WI We love our home and love the great service that we got from Midwest Home Center. They helped us with everything and answered all our questions. We really appreciate them.
Michael Albers, St. Paul, Minnesota At Midwest Home Center your homes are gorgeous.
Larry Hant, Hudson, Wisconsin The loft by Midwest Home Center is very impressive. Alot more room than I expected.
Craig and Beverly, Richfield, Minnesota We are very happy with Midwest Home Center and would recommend them to anyone.
Paul and Diane, Chaska, Minnesota Midwest Home Center set up all the financing for us at a great rate and the lowest cost we could find.
Broc and Tanya, Black River Falls, WI I just wanted to say that we have the Lakewood 2055. We had it set in March and we moved in April 11th and we love it. People cannot believe how little we paid for it. We will always recommend Wisconsin Homes because you are awesome.
Deb and Bruce, Winneconne, WI
Just thought you and those who took part in building our dream would enjoy a little note of thanks. Our Springdale was set May 13 and we moved in July 4th.
Contact us at http://www.midwesthomecenter.com/
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
