Normally, a loss of jobs would foretell economic weakness and would be a good thing for mortgage rate shoppers. Today, though, traders had been expecting a larger loss of 70,000 jobs.
In other words, today's jobs report looks surprisingly strong.
The stock market is now rallying on optimism that "the worst is over" for the U.S. economy and evidence supporting the Federal Reserve's remarks that its rate cuts were starting to take hold.
The stock market's gains are the bond market's losses.
Mortgage rates are up today because the cash that is fueling the stock market is coming from the sale of all types of bonds -- including mortgage bonds.
This is unwelcome news for people doing mortgage comparisons today, or buying a home this weekend.
In general, interest rates on adjustable-rate mortgages are increasing more than on fixed-rate mortgages.
(Image courtesy: Wall Street Journal Online)
John Topa, First Sunrise Mortgage, Northeast PA Mortgage Advisor. www.FirstSunriseMortgage.com
RealtyTrac released Q1 2008 foreclosure statistics and the data follows an interesting statistical phenomenon most commonly known as the "80/20 Rule".
The 80/20 Rule states that 80 percent of the effects come from 20 percent of the causes.
In this case, 80 percent of bank repossessions in the first three months of 2008 came from 20 percent of the states in the union.
Accounting for 156,463 repossessed homes nationwide:
Overall, 0.55 percent of homes were repossessed by banks in the first quarter.
John Topa, First Sunrise Mortgage, Northeast PA Mortgage Advisor. www.FirstSunriseMortgage.com
From the Baltimore Sun (and others):
New-home sales lowest since 1991
8.5% March decline exceeds forecasts; prices also tumble
As always, there's more to the story than the headline.
The Census Bureau reported a 8.5 percent decline in New Home Sales last month, but in the "fine print" of the report, the Census Bureau cites a margin of error of 16.1 percent.
By including a margin of error, the Census Bureau is acknowledging that the "headline number" is not precise and that the actual change in New Home Sales data lies somewhere between the values -24.6% and +7.6%.
Notice that the range of possible reading includes positive numbers.
This means that New Home Sales could have just as easily shown growth in March -- if only the Census Bureau had interviewed a different set of home builders.
The Census Bureau acknowledges this possibility, adding that it "does not have sufficient statistical evidence to conclude that the actual change is different from zero." The data, therefore, is worthless.
The housing market may be strong or the housing market may be weak. Most likely, it is both of these things. It all depends on your street in your neighborhood because all of real estate is local.
Either way, look deeper than the headlines. They're a good source of information, but the real analysis requires a deeper look.
Source
New Residential Sales In March 2008
Census.gov
April 24, 2008
http://www.census.gov/const/newressales.pdf
John Topa, First Sunrise Mortgage, Northeast PA Mortgage Advisor. www.FirstSunriseMortgage.com
Payments begin in about two weeks and range from $600 for individuals to $1,200 for couples, plus an additional $300 per child.
Not everyone is eligible for a full rebate, however.
For single filers earning more than $75,000 and joint filers earning more than $150,000, the tax rebate is reduced by $50 for each $1,000 of income beyond the limits.
An individual with no children, therefore, will not receive a tax rebate if income exceeds $87,000 annually. The IRS provides a tax rebate calculator that can help make sense of the math.
For tax filers using direct deposit, the rebates will be paid based on the last two digits of the social security number:
For tax filers using paper checks instead of direct deposit, payouts begin a little bit later on May 16 and extend through mid-July. The IRS makes the exact dates known on its Web site.
For late income tax filers, the IRS send rebate checks about two weeks after the returns are processed, but not before the regularly scheduled date.
John Topa, First Sunrise Mortgage, Northeast PA Mortgage Advisor. www.FirstSunriseMortgage.com
"Co-signing" a home loan is when a third-party -- usually a parent or relative -- promises to make repayments to the bank in the event that the borrower falls behind on his obligations.
Money experts usually advise against co-signing notes because of the long-term financial risks, but people still do it for a number of reasons including "wanting to help".
If you're thinking about co-signing a home loan for a friend or loved one, it's important to consider the implications of sharing credit with another person.
The four questions below may help you with your decision:
Not only can a co-signed home loan create serious financial burdens, but it's a long-term commitment, too.
Once the note is co-signed, the only way to separate the signers is terminate the note entirely. The two ways to accomplish that are to remortgage the home out of the co-signer's name, or to sell the home and retire the debt.
Co-signing on a mortgage is not "bad" but bad things can happen should the primary signer face personal and/or financial difficulties. Before agreeing to share credit, consider the implications should something go wrong.
John Topa, First Sunrise Mortgage, Northeast PA Mortgage Advisor. www.FirstSunriseMortgage.com
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John Topa, Your Connection to Affordable FHA Mortgages. Serving PA since 1997. Contact me today to see how your clients can benefit from honest, informed mortgage advice. 570-344-6091.
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