From CNBC:
Housing Recovery Rides Mortgage Rate Roller Coaster
Mortgage rates are moving so fast and so dramatically that even reports from barely a week ago seem suddenly outdated.
The average rate on the 30-year fixed conforming loan moved to its highest level in two years last week, according to the Mortgage Bankers Association weekly survey. That had a direct effect on consumers shopping for mortgages. Applications to refinance fell 16 percent and applications to purchase a home dropped 3 percent week-to-week.
That comes one day after another report from Zillow, an online real estate company, showed mortgage rates moving off their highs, although not that far off.
“Last week mortgage rates retreated from a 23-month high as the Fed sought to reassure markets that the wind-down of the stimulus program would be gradual, and contingent upon strong improvement in economic fundamentals,” said Erin Lantz, director of Zillow Mortgage Marketplace.
“This coming week, market participants will be focused on Friday’s jobs report as an indicator of whether the economic recovery is strong enough to withstand an earlier-than-expected withdrawal of Fed stimulus.”
…
Mortgage rates are up about a full percentage point from where they were at the beginning of May. That translates into about a 15 percent jump in monthly payments for the average home buyer, or 15 percent less purchasing power, depending on how you look at it. That can certainly be make or break for some buyers, especially first-time home buyers who may have been stretching in the first place.
…
The very recent rate retreat gave back around 15 basis points, but buyers really can’t play these small moves, which are largely dependent on investors buying or selling Treasury bonds.“Although 10-year Treasury yields have come down slightly in recent days, we do not expect the bulk of the increase in mortgage rates to be reversed,” said Paul Diggle of Capital Economics. “We’ve penciled in mortgage rates of 4.5 percent at year end, rising to 5 percent next year and 5.5 percent in 2015.”
From Trulia:
Asking Home Prices Not Cooling Off – Yet
Prices Up 10.7% Y-o-Y and Rising in 99 of 100 Largest Metros
Despite rising mortgage rates – which make housing less affordable and should help slow down price gains eventually – prices show no sign of cooling off. In June, asking home prices rose 1.5% month-over-month, seasonally adjusted. Prices have risen between 1.2% and 1.5% per month for the past five months, and nationally, prices rose 10.7% year-over-year. Even excluding foreclosures, prices are up 11.4% year-over-year, which means the national price increases aren’t primarily driven by the shift away from foreclosure to non-distressed homes for sale. Prices won’t keep rising this fast: rising mortgage rates, more inventory, and declining investor demand should all tap the brakes on price gains – though just not yet.
…
“Last-to-the-Party” Housing Markets See Big Price Gains
Home prices have been climbing for more than a year in most of the country and for more than two years in San Jose, Phoenix, Denver, Miami, and other markets where job growth or bargain buying started boosting prices earlier. But in a few markets, particularly on the East Coast and in the Midwest, prices were falling until recently. In 17 of the 100 largest metros, prices bottomed in just the past six months. Even in these “last-to-the-party” markets, all except Philadelphia have seen prices rise enough that they’re higher than they were a year ago. Among these recently bottoming markets, prices are up more than 7% in Edison-New Brunswick, NJ, Chicago, Lake County-Kenosha County, IL-WI, and Baltimore.
…
Rents Pick Up Steam, Though Prices Still Rising Faster in Nearly All Large Markets
Rents are up 2.8% year-over-year nationally – the biggest year-over-year increase since January. Still, rents are rising faster than home prices in just three of the 25 largest rental markets: Houston, New York, and Philadelphia. Rents are rising most in Houston, Miami, and Tampa-St. Petersburg, but falling in the three big rental markets with home price gains of more than 30%: Sacramento, Oakland, and Las Vegas.
From the WSJ:
Surveys Highlight Changing Role for Investors in the Housing Market
Are real-estate investors starting to run out of gas? Single-family home investors, whose mostly cash purchases played a central role in healing the U.S. housing market, have started to slow down their buying, according to several surveys.
Investors accounted for 20.2% of home purchases in May—still high by historical standards, but down from a peak of 23.1% reached in February, according to the Campbell/Inside Mortgage Finance survey of real estate conditions. A separate survey conducted for MemphisInvest.com and Premier Property Management Group found that investors planned to slow their home purchases in the next year.
Several peripheral indicators as well as some individual market data suggest waning investor interest as well. In May there were fewer offers for distressed homes like foreclosures and short sales, which are favored by investors. Those properties stayed on the market for longer than in the month before and closed further below the asking price, according to the Campbell/Inside Mortgage Finance.
Reports from the National Association of Realtors and Trulia, a real estate listings site, both show a slight decline in foreign buyers — a big source of investors in U.S. single family homes and condominiums.
It’s still too early to say if investors are leaving the market, as several markets such as Las Vegas, Miami and Seattle still have greater share of absentee buyers—a proxy for investors—than they did a year ago.
And, of course, even if investors are slowing their purchases it doesn’t mean they are leaving the housing market. For starters, it’s not unusual for investor share to decline in the spring, when there are more owner-occupants looking for homes. Also, many investors bought into the single-family real estate for the purpose of renting them out—income that continues to flow long after they stop buying property.
Fewer investors wouldn’t necessarily mean the housing recovery is in jeopardy, either. While surveys show investors are slowing down owner-occupy purchases remain healthy. The number of offers for non-distressed single-family homes—which are favored by owner-occupiers—has increased over the past several months, according to Campbell/Inside Mortgage Finance. Non-distressed homes are selling faster and the sales-to list-ratio, a proxy for buyer competition, is rising.
[Channeling Scrapple]
If Bernak-notes are the smack, what is the methadone? Wall Street gets the cold sweats and shakes if Uncle Ben even mentions slowing down the gravy train.
http://www.thefiscaltimes.com/Columns/2013/07/02/Jon-Corzine-What-the-Hell-Happened.aspx#page1
a little note on Jon
The patient will be handed more and more her0in…until the inevitable overdose destroys Western civilization. There is no financial methad0ne, there is no rehab.
Good times.
QE 4eva, bitchez!
Smoke some of that at your barbecue full of dolt lard-asses today.
Whats the problem? House sales are off the chart. money is still cheap.,,,
We’re in recovery mode.
Bidding wars all around on properties. Property taxes, don’t matter,,,
Auto sales off the charts, records.
The American consumer feels good again.
Student Loans,, no problem
Credit Card debt under control
And Egypt has a new leader.
Money will remain cheap until such time as everyone figures out it isn’t money anymore.
Everything you need to know about economics is in Willy Wonka and the Chocolate Factory.
Happy Indy Pen Dance DAY!
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