Mortgage rates halt 6-week slide

Another interesting Inman article....

Mortgage rates halt 6-week slide

Demand for purchase loans highest in 6 months
By Inman News
Inman News®

Mortgage rates finally found a bottom this week, following six consecutive weeks of declines, but remained near record lows as worries about the European debt crisis continue to make bonds that fund most mortgages look like a safe bet to investors.
Rates on the 30-year fixed-rate mortgage (FRM) averaged 3.71 percent with an average 0.7 point for the week ending June 14, up from 3.67 percent last week but down from 4.5 percent a year ago, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. Last week's rate for 30-year loans was an all-time low in Freddie Mac records dating to 1971.
For 15-year fixed-rate loans, rates averaged 2.98 percent with an average 0.7 point, up from 2.94 percent last week but down from 3.67 percent a year ago. Last week's rate for 15-year loans was a low in records dating to 1991.
Rates on the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.8 percent with an average 0.6 point, down from 2.84 percent last week and 3.27 percent a year ago. Rates on five-year ARMs hit 2.78 percent during the week ending April 19, an all-time low in records dating to 2005.
For one-year Treasury-indexed ARMs, rates averaged 2.78 percent with an average 0.5 point, down from 2.79 percent last week and 2.97 percent a year ago. Rates on one-year ARMs hit an all-time low in records dating to 1984 of 2.72 percent during the week ending March 1.
A separate survey by the Mortgage Bankers Association showed demand for purchase loans for the week ending June 8 was up a seasonally adjusted 13 percent from the week before, and up 4 percent from a year ago.
Although requests to refinance accounted for eight out of 10 mortgage applications, demand for purchase loans was at the highest level in more than six months, the MBA said.
Mortgage rates are near historic lows in part because global investors see mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae as a safe haven from turmoil in financial markets.
Fears that heavily indebted countries like Portugal, Italy, Greece and Spain will default on those debts, disrupting eurozone trade and plunging the global economy into another recession, continue unabated this week.
Moody's Investor Service downgraded Spain's sovereign credit rating Wednesday, and Greek banks have seen a run on deposits as customers prepare for the possibility that parties opposed to austerity measures will prevail in elections scheduled for Sunday, Reuters reports.
The impact a eurozone meltdown would have on the U.S. economy is unclear. The 17-nation eurozone was America's largest trading partner in 2011, Yahoo Finance economics editor Daniel Gross notes. But Canada, Mexico and Latin America, Asia and Africa have become increasingly important trading partners in recent years.
Trade isn't the only issue at stake, Gross said, "There are several other channels of contagion."
Central banks around the globe are making plans to protect their currencies and economies from the impacts of an exodus of capital from eurozone countries, Reuters reports. Demand for U.S. dollars strengthens the currency's value, which can hurt exports by making U.S.-made goods more expensive to foreign buyers.

Overcome mortgage obstacles when relocating

Interesting relocation article from Inman News...

Overcome mortgage obstacles when relocating

REThink Real Estate
By Tara-Nicholle Nelson
Inman News®
Q: My husband and I are planning to relocate up north and change jobs and our environment. Should we get preapproved before changing places of employment, or would it be all right to take another job as long as it is the same type of work? What steps would you advise us to take?

Relocating can be a little tricky, from a mortgage perspective. It's always advisable to get preapproved for a mortgage before you make a major move like a job change, but lenders are pretty good about scrutinizing all the details these days.

If you get approved for a home loan while you live and work in one town, then try to use that loan to purchase a home more than 25 miles away from your job, chances are good that your lender will require some sort of note from your existing job documenting that they understand you are moving and will allow you to have some sort of long-distance working arrangement, or will want to see proof of a new job in your new town.

To your point, though, by "new" job, lenders are looking for you to have a job in the same field as you're currently working in. They don't want you experimenting with entirely new lines of work on their dime, in case things don't work out and you find yourself with the new mortgage but without any job at all.

Keeping those things in mind, I recommend you take the following course of action:

1. Find your local real estate and mortgage pros in your new home town. Get referrals from folks you know in your soon-to-be neck of the woods and ask questions of agents on the active Q-and-A pages of the big national real estate listing websites to develop a short list of agents to meet with.

Ask these agents to refer you to local mortgage professionals. Although most lenders are national, local mortgage brokers and bankers know what local financing challenges may exist; they know local appraisers; and they also know about opportunities like city and state down payment assistance programs.

Contact them, make appointments, then take a day trip to your intended hometown and meet with these folks face to face to find a great personality fit. When you feel like you've created a good connection with one real estate pro in particular, you might even ask him to give you a tour of a number of homes that are currently on the market, so you can get a real-time reality check on what price range of homes you'll be aiming for.

2. Explain every part of your financial and job situation to both of your pros. Well before you quit your job, perhaps even while you're meeting with these agents and mortgage pros, explain your financial, job and timing situation to them. Don't miss out on the expert knowledge these professionals have, as well as their up-to-date experience of what lenders will want and will require from you. Talk with them about what specific paperwork you'll need to produce in order to document that your next job is in the same line of work as this one. And keep all of these things in mind as you execute your relocation, your home purchase and your job hunt.

3. Work with your chosen real estate and mortgage pro to put an intentionally sequenced action plan in place. With so many moving parts in the air, don't be surprised if some advise you to get a job, move and then rent a place on a month-to-month lease while you house hunt. Others may tell you to try to time it all perfectly, house and job hunting at the same time.

Personally, I'm inclined to eliminate any intense time pressures from the house-hunt experience whenever possible to minimize panic-based (i.e., bad) decision-making, so I would encourage you not to create a situation in which you have to close a home purchase by a certain date in order to have a place to live when you start your new job or have similar pressures in that vein.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

National Association of Realtors "2011 Profile of Home Buyers and Sellers"

Some interesting stats...

89% of Buyers and Sellers used a REALTOR in 2011, a 20% increase compared to a decade ago. Only 7% of Buyers went straight to a Builder, and only 4% went directly through the owner. 37% of Buyers in 2011 were first-time Buyers. Of these first-time Buyers, 77% were renting and 19% were living with family or friends. Their top reason for purchasing was their desire to own a home (60%). Of homes sold in 2011, 84% were re-sale and 16% were new construction. 77% of the homes sold were single-family detached homes. Nationally, the median price of all homes purchased was $190,000. As far as the first step in the home-buying process, 35% of Buyers started their search on-line, while 21% started by contacting a REALTOR. For general information during the home-buying process, 88% of Buyers used the internet at some point, and 87% relied on their REALTOR during the transaction. In regards to the usefulness of information sources, 83% of Buyers reported their REALTOR was helpful, while 81% reported the internet was useful. In 2011, 40% of Buyers found the home they eventually purchased on-line, whereas 35% found their home through a REALTOR. 51% of Buyers said that finding the right property was the greatest challenge in the home-buying process; coming in second was paperwork at 22%. In regards to marketing methods, 85% of Buyers reported photos as being a "very useful" feature on the internet, whereas only 58% reported virtual tours as "very useful". The top websites used by Buyers during home search: 1) 56% - MLS websites (eg. www.ColoProperty.com); 2) 46% - Agent individual website; 3) 45% - www.Realtor.com; 4) 40% - Real estate Company websites; 5) 38% - Other real estate websites (Google, Yahoo, etc.) Special thanks to Venna Hillman for sharing NAR's 2011 Buyer and Seller Profile. If you'd like a copy, please contact Charity or Lindsay.

Mortgage rates still looking for bottom

Mortgage Rates Remind me of the Johnny Cash Song..."Down, Down, Down...."

Mortgage rates still looking for bottom

Investors like safety of bonds as eurozone crisis builds
By Inman News
Inman News®

Mortgage rates sank to new lows this week as investors contemplated the prospect of bank runs in Europe and disappointing U.S. job growth.

Rates on 30-year fixed-rate mortgages averaged 3.75 percent with an average 0.8 point for the week ending May 31, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. That's down from 3.78 percent last week and 4.55 percent a year ago, and a new record low in Freddie Mac records dating to 1971.

For 15-year fixed-rate mortgages, rates averaged 2.97 percent with an average 0.7 point, down from 3.04 percent last week and 3.74 percent a year ago. Rates on 15-year loans have never been lower in records dating to 1991.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.84 percent with an average 0.6 point, up from 2.83 percent last week but down from 3.41 percent a year ago. Rates on five-year ARMs hit an all-time low in records dating to 2005 of 2.78 percent during the week ending April 19.

For one-year Treasury-indexed ARM loans, rates averaged 2.75 percent with an average 0.4 point, unchanged from last week but down from 3.13 percent a year ago. Rates on one-year ARMs hit an all-time low in records dating to 1984 of 2.72 percent during the week ending March 1.  Mortgage-backed securities guaranteed by the government fund most U.S. home loans, and investors see them as a safe haven in times of uncertainty. Increased demand for mortgage-backed securities and similar investments, like Treasurys, pushes long-term interest rates down.

"Market concerns over tensions in the eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week," Freddie Mac Chief Economist Frank Nothaft said in a statement.

The European debt crisis has raised the cost of government borrowing for countries including Portugal, Ireland, Italy, Greece and Spain. Financial aid for those countries has been tied to austerity measures that voters may ultimately reject.  Although Irish voters look ready to approve a referendum that would allow the country to continue receiving aid from the European Union, the outcome of Greece's June 17 general election "is too close to call," Reuters reports.  Spanish banks lost $82 billion in deposits before Spain's fourth-largest lender was nationalized in May as account holders moved money abroad, Reuters said.  European Central Bank President Mario Draghi today called for a joint guarantee for bank deposits across the eurozone to fight bank runs, and the European Commission's Olli Rehn said a "genuine stability culture" and a "much upgraded common capacity" -- more rescue funds -- was needed to "contain common contagion," Reuters reported.
It remains to be seen whether Germany will continue to oppose such measures at a two-day summit meeting set to begin June 28.

In the U.S., unemployment claims rose last week for the seventh time in eight weeks, to a seasonally adjusted 383,000, Reuters reported. Payroll processor ADP said private companies added 133,000 jobs in May, better than the 113,000 seen in April but below economists' expectations.
Taken together, those events suggested "the U.S. labor market recovery was stalling after a strong performance early in the year," Reuters said.

The National Association of REALTORS® reported this week that an index measuring pending home sales fell 5.5 percent from March to April, breaking a three-month string of month-over-month gains. But pending sales were still up 14.4 percent from the same time a year ago, and NAR Chief Economist Lawrence Yun said home sales "are on track to see the best performance since 2007."
The Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending May 25 showed demand for purchase loans was down a seasonally adjusted 0.6 percent from the week before, and 3.9 percent from a year ago.

Saudi Prince Sells Aspen House for $49M

Just a small cabin in the woods....

By Aspen Daily News

ASPEN, Colo. (AP) — A Saudi prince and former ambassador to the United States has sold his luxury Aspen ranch for $49 million.

The Aspen Daily News reports Prince Bandar bin Sultan of Saudi Arabia sold the Hala Ranch on Thursday to Starwood Mountain Ranch LLC. He bought the land in 1989 and built the main residence in 1991.

The prince, who was ambassador to the United States from 1983 to 2005, listed his 95-acre ranch and the 56,000-square-foot home in 2006 for $135 million, but he pulled it off the market 16 months later.  He later sold two of his other Starwood homes for a combined $49 million in 2007.  Starwood is a gated residential neighborhood on the slopes of Red Mountain.

4 considerations when making offer on 'overpriced' listing

Interesting Inman News Article...

4 considerations when making offer on 'overpriced' listing

By Tara-Nicholle Nelson
Inman News

Q: I am currently in the market for a new home. I have found a property that I really like; however, it is priced $200,000 over the tax assessment. It is in the country, so there really aren't any comps that I can find near the property. The only thing I can really find is that the house near it sold for close to its assessed price last year.
Why would an agent even list a house with a price above the assessed value? In general, would a lender even finance the property for that much over the assessment? --Lesa
A: It can be very difficult to get a handle on the actual market value of any home on today's market. Many buyers and sellers are finding it difficult to come up with comparables that support their agreed-upon price, even in cases where there are multiple offers. Add to that the complication of a rural property that you called out -- very few comparable homes, much less sales, even exist nearby -- and you can have a real dilemma on your hands when it's time to figure out what such a property is worth and/or how much to offer for it.
Here are a few need-to-knows that should inform your thought process around this home:
1. The assessment is largely irrelevant. As a global rule of thumb, the real estate market moves faster -- much faster -- than the tax assessor. As well, there are lots of reasons assessed values can be wildly off of from a home's fair market value. First among them is that homeowners have a deep, vested interest in depressing their home's tax assessment: it's the basis for their property taxes.
So, tax-savvy homeowners jump through all sorts of loops, legitimate and less so, in an effort to get or keep their assessments (and property taxes) low, from failing to report improvements to the property, to submitting aggressive appeals of their assessments using not-so-comparable sales data. And no, an assessment lower than the true fair market value doesn't necessarily help you if you do buy the property; in many states, tax assessors revise the assessed value to the purchase price when you buy it.
I'm not saying the low assessed value is wrong or off, or that the sellers aren't overpriced or delusional; I'm just saying that the assessed value is not dispositive of what the property's true fair market value is. In many cases, it might actually be completely irrelevant.
2. Maybe the list price is fair -- or fairer than you think. What's more, the definition of a home's fair market value on any given Sunday is what a qualified buyer would be willing to pay for the property on that day. And, as you already understand, the best way to gauge that is by what similar, nearby homes have sold for as recently as possible. This is where the fact that the home is rural and that very little comparable sales data exists becomes a problem.
This will likely also become a problem for any buyer that attempts to purchase the property with a mortgage; the lender will require an appraiser to provide comparables and/or some other strong argument that supports the purchase price.
As many agents will tell you, in lots of areas, the market has heated up somewhat this year and this spring. If the property is desirable to buyers now, it's possible that the home is actually worth that much more than the nearby home sold for last year. It's also possible that the sellers believe that their property is larger, more beautiful, more upgraded, or otherwise $200,000 different or better than the other property.
Ultimately, only you can decide whether you agree; it might be a good idea to look through any pictures or old listing materials your agent can find about the other home, so you can do your own compare and contrast.
3. Maybe they're overpriced. The fact that it's priced $200,000 higher than the assessed value leads me to believe that we're probably talking about a relatively expensive property, even if it were priced properly. At higher price ranges, it's more common than elsewhere to see sellers price higher than they believe the place is worth, assuming they'll need room to negotiate downward to meet a buyer's demands. And virtually everywhere, at every price range, buyers know that there are simply some sellers that are bizarrely fantasy-based in their pricing.
I wouldn't assume that the agent had much to do with it; remember that agents are, by and large, vocally bearish on their sellers' overoptimistic expectations about pricing. If the place truly is overpriced, chances are good that the listing agent has decided to list it at the price and allow the market (i.e., few or no showings, no or only lowball offers) to "educate" the seller that the price needs to be lowered.
4. The list price should inform, but not govern, your offer price. This is real estate, remember, so nearly everything is negotiable -- and especially price. The list price and any information about the seller's motivation level or priorities that the listing agent will give your agent should definitely factor into your decision-making about how much to offer, if you decide to make an offer. But so should your own good judgment, common sense, personal financial resources and analysis of the relevant local market data, which your agent should happily help you undertake.
Do what you can to make the best offer that takes into account all of these factors; don't feel forced to overpay for a property because the seller is unrealistic.
If you can wait for a while, you might see the price come down on its own, but before you choose that strategy, be sure that you're comfortable with the reality that some other buyer might make a move. It never hurts to have your agent contact the listing agent and suss out the seller's willingness to negotiate, or to simply let them know that you'd like to be notified of a price reduction or if they receive any other offers.

Saudi prince sells Aspen ranch for $49M

By Aspen Daily News

ASPEN, Colo. (AP) — A Saudi prince and former ambassador to the United States has sold his luxury Aspen ranch for $49 million.

The Aspen Daily News (http://bit.ly/L8tNPT ) reports Prince Bandar bin Sultan of Saudi Arabia sold the Hala Ranch on Thursday to Starwood Mountain Ranch LLC. He bought the land in 1989 and built the main residence in 1991.

The prince, who was ambassador to the United States from 1983 to 2005, listed his 95-acre ranch and the 56,000-square-foot home in 2006 for $135 million, but he pulled it off the market 16 months later.

He later sold two of his other Starwood homes for a combined $49 million in 2007.

Starwood is a gated residential neighborhood on the slopes of Red Mountain.