Could we see another record low for mortgage rates this week?  Some technical factors at work last week certainly point to a reasonable likelihood.  Of course, more economic news highlighting slowing growth with probably be enough to push rates just a little further downward.

Like Your Home?  Your Neighbors Like Theirs Too!

In a survey from the US Census Bureau and HUD, about 70 percent of US homeowners are satisfied with their homes, with 28 percent being extremely happy with their homes.  84 percent of home owners in newly constructed houses like their homes, with 45 percent giving them a 10 on a scale of 1 to 10.  We also appear to like where we live.  Over 68 percent of homeowners gave their neighborhoods high ratings with 25 percent giving theirs a “best” rating!

This week has a number of important economic reports, including Industrial Production.  With so much of the recovery riding on the strength of manufacturing, a drop in Production would almost certainly drive mortgage rates even lower.  Even if economic news turns a bit more positive next week, mortgage rates will likely stay low as there is so much growing pessimism about the economy.

Will the Mortgage Industry Go Paperless?

According to a survey by the National Mortgage News, about half of mortgage industry professionals believe that the mortgage industry will go paperless in the next three to four years.  Only 28 percent of respondents to a similar survey in 2008 believed that the industry would eliminate paper.  Today, most mortgage professionals report an increase in electronic disclosures.  Do you think the industry would benefit by going paperless?  Give me a ring and let’s chat.

This week contains a few very significant pieces of economic data for markets to digest.  The week starts with the release of the ISM Manufacturing Index. While the index is expected to remain above 50, which indicates that manufacturing is expanding, the index continues to fall. Some fear that it will drop below 50 in the coming months.  The week will end with July’s employment data, which is expected to highlight that the labor market is not recovering.  With the economy struggling and inflation remaining tomorrow’s problem, we could see rates at record lows for some time to come.

Want a Little Cut Every Time a House is Sold?

Last week housing advocates launched a campaign to move the Federal government to ban home resale fees.  These fees require that a third party is paid every time a home is sold.  Then the rights to collect these fees are sold on Wall Street.  The practice is already banned in 17 states, and is backed by a broad coalition including the National Association of REALTORS® and the Center for Responsible Lending.  Learn more at www.stophomeresalefees.org.

With the summer doldrums in full swing, economic data may not brighten market moods much this week.  However, with economic data continuing to show sluggish growth, mortgage rates are very likely to remain low.  The Fed’s Beige Book is due to be released, and if most regions of the country appear to be shifting into neutral, rates could fall just a bit.  However, Friday brings the 1st release of the 2nd quarter GDP.  A better-than-expected reading could brighten moods and push rates upward.

Freddie and Fannie Future – Is There One?

 Last week, a major financial reform package was signed into law.  One of the major elements missing from this package, according to many, was housing finance.  According to Treasury Secretary, Tim Geithner, housing finance is now the new top legislative priority for the President.  When asked, Geithner replied, “we’re not going to preserve Fannie and Freddie in anything like the current form.”  What will the future look like?  Different is the only certainty now.

This week, we’ll get a bit more insight into the state of the economy with the release of Retail Sales data and Industrial Production numbers.  So far, the recovery has been lead by manufacturing, with hopes that consumers would eventually begin to spend again.  With expectations of another drop in Retail Sales, an unexpected increase would be a surprise, but mortgage rates might be pushed upward.  Rates would go even higher if Industrial Production numbers also showed some signs of growth.  Of course, more poor economic news could push rates to even lower levels next week.

$41 Billion in Residential Property Purchased

Foreign buyers continue to pour money in the US real estate market, with over $41 billion in residential purchases in 12 months ending March 2010.  Adding in recent immigrants and temporary visa holders drives that number up to over $65 billion.  Combined, Canadians and Mexicans purchased over 30% of homes.  Some economists see the continued interest in US homes as very positive, as foreign buyers are helping soak up the excess inventory in the US.

This holiday-shortened week has very minimal economic data for markets to digest.  With last week’s disappointing news, rates are likely to stay low, and could stay low for some time.

Ten Most Recession-Proof Cities

In a report released by the Brookings Institute’s Metropolitan Policy Program, 21 major US cities were identified as having a robust economy and stable labor and housing markets.  These cities had smaller housing bubbles and did not have strong ties to the auto industry.  Topping the list is Albany, NY, followed by Augusta, GA, Austin, TX, Baton Rouge, LA, Buffalo, NY, Columbia, SC, Dallas, TX, Des Moines, IA, El Paso, TX, and Honolulu, HI.

This is a very busy week of economic reports and data.  With a manufacturing-led economic recovery underway, the ISM Manufacturing Index will be very influential this week.  If it only drops slightly, as expected, mortgage rates should hold fairly steady.  However, a drop in the ISM could push rates further downward.  We end the week with the Employment Report.  If the unemployment rate does climb, along with a net loss of jobs, we’ll see rates trending downward as the week ends.

Luxury Home Market Beginning to Recovery

In a sign that another part of the housing market is showing signs of recovery, Walt Disney Corp. announced plans to develop and sell luxury homes near Orlando’s Walt Disney World.  The 450 homes will range in price from $1.5 million to $8 million.  The proposed 950-acre development will also include a 445-room Four Season Hotel, a golf course, and even a nature preserve.  The first homes are expected to be completed in 2011.

This week will likely be more of the same with the Federal Reserve again holding its rate policy unchanged.  Undoubtedly, the Fed will also mention that the Euro-zone debt crisis is having limited impact here in the States, and that it remains vigilant in its aim of protecting the weak, yet growing economic recovery.  While the weak recovery is frustrating for many, it is allowing the Fed to maintain low interest rates, which hopefully will continue to help the housing market recover.

Homebuyer Tax Credit Deadline Extended

 For some homebuyers, closing by the June 30th tax-credit deadline was unlikely.  Last week, the Senate voted to extend the deadline by 3 months.  According to estimates, there may be as many as 180,000 sales that will fail to close by the June 30th deadline.  The extension is part of a larger tax bill that still is pending in both houses of Congress.  If you are struggling to get a loan closed, please give me a call.  I may be able to provide some timely alternative financing.

This week has a number of major economic reports due, including both the Producer and Consumer Price Indices, along with Industrial Production data.  With limited inflation concerns, an unexpected downturn in Industrial Production could help push mortgage rates down even further.  

Mortgage Fraud Still Abounds!

Despite the focus on mortgage fraud since the housing market crash, mortgage fraud continues to be an issue around the country.  According the Financial Times, the FBI is planning on arresting hundreds of people starting this week in its latest crackdown.  If you or anyone you know is considering buying or refinancing a house, and would like to work with an honest mortgage professional, please give me a call.  I take pride in being a truly ethical advisor for you.

With limited concerns about inflationary pressures, combined with fears of a “double-dip” recession floating around, we could see mortgage rates remaining low again this week.  While Retail Sales data may influence rates, Fed Chair Ben Bernanke has three scheduled appearances.  The way he spins the debt crisis in Europe, and its relationship to the US economy, could be the biggest influence in the market.  An important meeting of the European Central Bank could also push rates around.

The US Housing Bubble – Not So Bad?

For the millions of Americans affected, the burst of the real estate bubble was certainly miserable.  However, our problems may be dwarfed by the problems in China.  In 2007, the average sales price of a US home was $316,800, which was 5.4 times the median US household income of $58,480.  In 2009, a typical apartment in Beijing cost $278,160, which was 111 times the city’s median household income of $2,514. Housing prices in China are still climbing.