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  • What's Ahead For Mortgage Rates This Week - July 7, 2014

    Last week's economic news was mixed, but economic reports for Non-Farm Payrolls and the National Unemployment rate suggest a strengthening labor sector. Pending Home Sales surpassed expectations in May and conversely, construction spending was lower than expected. Here are the details. What's Ahead For Mortgage Rates This Week July 7 2014

    Pending Home Sales Reach Highest Level in Eight Months

    The National Association of REALTORS® reported that pending home sales in May rose by 6.10 percent over April's reading. May's reading was 5.20 percent lower than for May 2013. The index reading for May reached 103.9 as compared to April's index reading of 97.9. Results for all regions were positive for May:

    - Northeast: 8.80%

    - West 7.60%

    - Midwest 6.30%

    - South 4.40%

    An index reading of 100 for pending home sales is equal to average contract activity in 2001; pending home sales are a gauge of upcoming closings and mortgage activity.

    CoreLogic Home Price Index Reflects Slower Price Gains

    National home prices rose by 1.40 percent in May and 10 states posted new month-to-month highs, while year-over-year reading slipped from 10.00 percent in April to 8.80 percent in May. Home prices remain about 13.50 percent lower than their 2006 peak.

    The overall rate of construction spending slowed in May to an increase of 0.10 percent from April's reading of 0.80 percent and against expectations of 0.70 percent. Residential construction spending dropped by 1.50 percent in May.

    Freddie Mac's weekly survey of average mortgage rates brought good news as the rate for a 30-year fixed rate mortgage dropped by two basis points to 4.12 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.22 percent, as was the average rate for a 5/1 adjustable rate mortgage at 2.98 percent. Discount points were unchanged at 0.50 percent for a 30-year fixed rate mortgage and 15-year fixed rate mortgages. Discount rates rose from 0.30 to 0.40 percent for 5/1 adjustable rate mortgages.

    Jobs Up, Unemployment Rate Lower

    ADP payrolls, which measures private-sector job growth, reported 281,000 new jobs in June as compared to a reading of 179,000 new private-sector jobs in May. The Bureau of Labor Statistics' Non-Farm Payrolls report for June surpassed expectations of 215,000 jobs added with an increase of 288,000 jobs against May's reading of 224,000 jobs added.

    The national unemployment rate fell to 6.10 percent against predictions of 6.30 percent and May's reading of 6.30 percent. 

    No news was released on Friday, which was a national holiday.

    What's Ahead

    This week's scheduled economic is lean with no events set for Monday. Job Openings, the minutes from the most recent FOMC meeting, along with regularly scheduled weekly reports on mortgage rates and new jobless claims round out the week's economic news.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - June 30, 2014

    Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac's weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday. What's Ahead For Mortgage Rates This Week June 30 2014

    Existing Home Sales Stronger than Expected! 

    Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April's reading of 4.65 million existing homes sold; April's reading was later adjusted to 4.66 million. May's reading represented a monthly increase of 4.90 percent over April's reading and was the second consecutive monthly increase in previously owned home sales.

    The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.

    May's reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.

    Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders "need more clarity" as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.

    Case-Shiller, FHFA Report Slower Pace for Home Price Growth

    The S&P Case-Shiller Home Price Index and FHFA's House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.

    Analysts noted that home price growth is leveling out after last year's steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing markets. First-time buyers provide a foundation for home sales; if they cannot buy homes, then homeowners can't sell existing homes and buy new homes. A slower but consistent rate of home price growth allows homeowners to build home equity, but won't likely lead to housing "bubble."

    New Home Sales Blast Past Expectations, Mortgage Rates Fall

    The U.S. Department of Commerce reported that new home sales for May reached a six-year high with a reading of 504,000 new homes sold on an annual basis. April's reading exceeded expectations of 440,000 new homes sold as well as April's adjusted reading of 425,000 new homes sold. The month-to-month increase in new home sales from April to May was the largest monthly increase in home sales in 22 years.

    Although analysts caution that month-to-month seasonally-adjusted sales reports are volatile, this uptick in new home sales may help bolster builder confidence in housing markets. May prices for new homes also rose with the median home price at $282,000. This reading represents a year-over-year increase of 6.0 percent for new home prices.

    The Northeast led regional results for new home sales with its reading of 54.50 percent; The West reported an increase of 34.00 percent. New home prices in the Southeast rose at an annual rate of 14.20 percent, and the Midwest region reported a 1.40 percent increase in new home prices. While analysts characterized the Northeast region's May reading as exaggerated, overall results for new home prices indicate a comeback for new home prices.

    Freddie Mac put some icing on the good news cake with its weekly mortgage rates report. Average rates for a 30-year fixed rate mortgage dropped to 4.14 percent with discount points lowered to 0.50 percent. The average rate for a 15-year fixed rate mortgage fell by eight basis points to 3.22 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell by two basis points to 2.98 percent with discount points lower at 0.40 percent.

    Thursday's Weekly Jobless Claims Report reading fell by 2000 new claims to a seasonally adjusted reading of 312,000 new claims filed. Analysts had expected a reading of 310,000 new jobless claims. 214,000 per month have been added to the economy from January to May 2014.

    Positive economic developments were not lost on consumers. The Consumer Sentiment Index for June posted a reading of 82.5 against an expected reading of 81.9 and May's reading of 81.2.

    This Week's News

    Scheduled economic news includes Pending Home Sales, Construction Spending, the ADP Employment report, and the Non-farm Payrolls Report. The National Unemployment Rate report along with Freddie Mac's PMMS and Weekly Jobless Claims round out the week. No news is scheduled for Friday's Independence Day holiday.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Dos And Don'ts Of Buying Distressed Real Estate

    Distressed real estate is real estate in need of serious repairs. These properties are often called "handyman specials." If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don'ts of buying distressed real estate. How to Build the Ultimate Tree House for Your Children in Just Seven Steps

    DO Get A Home Inspection

    Distressed homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water damage in the attic, can be easily hidden. The only way to know for sure what you're buying is to have the property inspected by a professional home inspector.

    DO Pay Attention To The Home's Market Value

    You don't want to buy a home and spend your hard-earned money for repairs only to find out the home is worth less than you paid for it. Have your agent complete a comparative market analysis so you know what the home is worth.

    DO Have An Estimate For Repairs

    There's no point buying a distressed home if you can't afford the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

    DON'T Think About Potential Profit

    You've probably heard countless stories about people who bought distressed properties and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

    DON'T Buy A Home Just Because The Price Is Low

    When you buy distressed homes, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

    DON'T Buy If You Don't Have The Money

    No matter how good a deal you find on distressed homes, they aren't worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can't pay for the home.

    Looking for a great deal on distressed real estate? Contact your trusted real estate professional today.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - June 23, 2014

    Last week's scheduled economic news included the National Association of Home Builders/Wells Fargo Housing Market Index, Housing Starts and Building Permits. The Fed's Federal Open Market Committee (FOMC) issued its usual statement at the conclusion of its meeting, and Fed Chair Janet Yellen also gave a press conference. What’s Ahead For Mortgage Rates This Week June 23 2014

    Home Builder Confidence Improves, but Housing Starts Slow

    NAHB released its Housing Market Index report, which reached its highest reading in five months. The index moved up from 45 to 49; a reading of 50 indicates that more builders are confident about housing market conditions than those who are not. David Crowe, NAHB chief economist, said that builder confidence is in line with consumer confidence; he noted that consumers are waiting for a stronger economic recovery before buying homes and that builders didn't want to build more homes than markets would bear.

    According to the latest figures from the Department of Commerce, May housing starts fell to 1.00 million from April's reading of 1.07 million on a seasonally adjusted annual basis, and missed the consensus reading of 1.02 million. Building permits issued in May fell by 6.40 percent to 991,000 permits issued for single and multi-family construction. In recent months, permits for single family homes have fallen, while permits for multi-family units are increasing. This concerns economists as single-family homes generate sales of retail goods including furniture and home improvement supplies, while multi-family housing is often occupied by renters and yields fewer home related purchases.

    Warmer weather was expected to add to the pace of housing starts, but this did not occur during May.

    Fed Reduces Asset Purchases, Mortgage Rates 

    FOMC members reduced the Fed's monthly asset purchases by $10 billion, for a monthly volume of $35 billion in Treasury securities and MBS. The meeting minutes noted FOMC concerns that inflation has not yet reached the committee's benchmark of 2.00 percent inflation as a benchmark of economic recovery.

    The minutes reflected FOMC's position that it will maintain the target federal funds rate at between 0.00 and 0.25 percent for a considerable period after the asset purchases under the current quantitative easing program have ended. While analysts previously associated "considerable period" with a time frame of six months, Fed Chair Yellen stated during her press conference that there was no formula for determining the Fed's actions; she emphasized that the Fed and FOMC would monitor a wide range of economic indicators, economic reports and developments in support of any decisions to change current monetary policy.

    In response to a question about tight credit, Chair Yellen cited banks' reluctance to lend to all but those with "pristine" credit scores as a factor contributing to slower recovery in the housing sector.

    Mortgage Rates, Jobless Claims

    Freddie Mac reported lower mortgage rates on Thursday. The reading for a 30-year fixed rate mortgage was 4.17 percent, a decline of three basis points. Discount points were also lower at 0.50 percent. The average rate for a 15-year fixed rate mortgage was lower by one basis point at 3.30 percent; discount points were unchanged at 0.50 percent. The average rate for a 5/1 adjustable rate mortgage fell to 3.00 percent from last week's reading of 3.05 percent. Discount points were unchanged at 0.40 percent.

    New jobless claims were higher than expected at 312,000; analysts had predicted a reading of 310,000 against the prior week's reading of 318,000 new jobless claims.

    No economic reports were released Friday.

    What's Ahead

    This week's economic calendar includes several housing-related reports. Existing home sales, the Case-Shiller Housing Market Index and New Home Sales will be released along with multiple consumer-related reports and weekly updates for mortgage rates and new jobless claims.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Discover Why Your Home Isn't Selling This Summer

    Just when you think you've done everything you need to do to get your home ready for the market, months pass and your home doesn't sell. Consider a few factors that can effect your goal of selling your home. Discover Why Your Home Isn't Selling This Summer

    Priced Too High-If your home has an excessive asking price, it will be harder to sell. With so many homes available today, a big price tag may turn buyers off.

    And, your competition down the street may have the same home but a better price.

    The Market - No longer can you simply put a home on the market and watch the offers roll in. Nowadays, you have to be diligent and knowledgeable in your approach.

    Research the market value of homes in your neighborhood and know what kind of competition you're up against. And, understand today's buyers and what they need in order to make a good offer on a home.

    Unfavorable Location - No matter how gorgeous a home is a bad location can hurt sales. Although you can't change the location, you can be creative in figuring out ways to appeal to buyers. Offer incentives to attract buyers or lower your asking price.

    The Appearance - Does your home need some work? If so, you want to attack those issues first before putting your home on the market.

    Things like dirty carpets and broken appliances can turn buyers off. Try staging your home. This will help to ensure your home dazzles potential buyers.

    You Didn't Consult A Professional - Trying to sell a home yourself can be an extremely daunting task. That's why you need a real estate professional who knows the ins and outs of the industry and can market your home in the right way.

    The good thing is that you can make changes that will improve the situation. Go over all the points listed and address any problems. Once that's done, you'll have a better chance of watching your home sell.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Three Easy Ways to Make Your Home More Inviting

    Many home owners putting up their home for sale on the market don't have a lot of available cash to spruce it up. While staging houses is a definite plus, it can cost a fair amount of money, as do many of the other suggested "to-dos." Here are a few inexpensive and easy ways to make your home look more inviting to buyers. Three Easy Ways to Make Your Home More Inviting

    Put Up Your Personal Stuff

    Not every buyer looking at a home for sale appreciates the fact that someone still lives there. Putting away the your personal things can help the buyers' see themselves in the home.

    You will want to put your pet's things (toys, litter box, bowls) away and out of sight. The same goes for your medications, toothbrushes and toilet accessories.

    Clean up your kids' rooms and put away any toys around the house. Minimize or put away knick-knacks and personal pictures. Remember that you want the buyer to imagine themselves in the home.

    Create More Space

    Small, closed-in spaces are major turnoffs for buyers. Create the illusion of more space by putting up out-of-season clothes or clothes you don't wear very often to make your closets look bigger. A good way to make your bedrooms look bigger is by taking one piece of furniture out of each bedroom.

    Packing up the small appliances in your kitchen is a great way to make your countertops seem larger. You can also take out all but four chairs in your dining room, as well as extra table leaves to give that illusion of space.

    Touch On The Trends

    Chances are that some of the buyers are paying attention to celebrity trends. Feng shui is a big one, and you can do your part with just a few touches like adding a fresh bowl of fruit to the kitchen. Put a comfortable couch or chair on the east side of your living room or den. Place a green welcome mat on your porch to symbolize opportunity. Go through your house and get rid of reds.

    Whether you see or feel a difference doesn't matter. Keep in mind that you're trying to appeal to potential buyers of your home, not make the home more livable for you. If it helps, pretend that you're the buyer, seeing the house for the first time.

    If you're trying to get your home ready to sell, I can help. Get in touch with me for more information.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • DIY Or Hire It Done, Renovating Real Estate Investment Properties

    Sometimes, when buying - or even thinking about buying real estate for investment purposes, you're faced with the need to fix up the property. DIY Or Hire It Done Renovating Real Estate Investment Properties

    The question then arises: Should I fix it up myself or hire it done? Unfortunately, no one can give you the right answer. However, there are a few questions that you can ask yourself to help decide the issue:

    Do I Have The Time?

    Time is an issue that many people forget about, but it should be one of the deciding factors. Some renovations, such as handles, hinges or kitchen hardware can take very little time to do. Others, like retiling a bathroom, can take hours, or even days to accomplish. 

    If you don't have the time to do these things personally, you've already answered the question.

    Do I Have The Money?

    Obviously, money is as important a factor as time. Often, if you don't have the time, you do have the money to hire someone. However, if you have neither the money nor the time, you may need to reassess whether you can really afford the real estate you're thinking of buying. 

    You may want to continue looking to find something that needs fewer repairs or that you can get at a lower price.

    Do I Have The Know-How?

    Granted, there is a lot of do-it-yourself information out on the Internet. However, if you don't have the necessary knowledge to understand what they're saying, you'll either have to research more, or hire someone. 

    Being knowledgeable on what you're doing may not be so important when, say, you're painting the living room, but it's incredibly important if you need to rewire a room or want to knock down a wall.

    The main key when deciding on what property to buy, what renovations need to be made and whether to do it yourself is simple: Be realistic. Be honest with yourself.

    Can you really do this? Can you really afford it? Remember, if the answer is "no," it could just mean "not right now."

    Don't be afraid to wait until you have everything in place before picking your investment properties. If you're careful with your time and money management, you may find yourself able to buy that dream real estate investment property.

    Call your trusted real estate professional today and let them help you find the perfect real estate investment property.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Thinking About Buying An Investment Property? 6 Tips To Ensure You Don't Get Fleeced

    Purchasing an investment property is one of the most important decisions that you'll ever be a part of. As such, it's a necessity to make your decisions with only the most careful of consideration.Thinking About Buying an Investment Property? 6 Tips to Ensure You Don't Get Fleeced

    Here are six tips that you need to heed in order to ensure that you don't get fleeced.

    Find The Right Property At The Right Price

    Yes, this is a whole lot easier said than done. However, it's not impossible. All it takes is some patience and research.

    You have to determine what everything in your area is selling for in order to be able to spot a bargain! Further, you need to know that various property classes will outperform each other. For example, land and home units will appreciate differently.

    Figure Out The Cash Flow

    It's always a good idea that you know how to maintain your mortgage repayment obligations over the long term. It's recommended that you analyze the cost of servicing any loan only on an after-tax basis. By taking this approach, you have the power to calculate and put the cost into actual terms that make sense for you.

    Look For A Good Property Manager

    Finding a good property manager who is a professional in his or her field is vital. Your property manager's job will be to make certain that everything is in order between you and any of your tenants. A good property manager can extract the best possible value for you from your property and help to keep your tenants in line as well.

    Choose The Appropriate Type Of Mortgage

    There are many options available for financing the investment property that you choose, so it's best to get sound advice. Options such as a variable rate loan and a fixed rate loan are both popular choices, but your specific circumstances will dictate what's most suitable for you. Consider that variable rates often end up being cheaper over time, yet fixed rates at the right time are ideal.

    Take Equity From Another Property

    Leverage the equity from your residence or another investment property. Doing this is actually an ideal way to purchase your investment property. Equity can be calculated by way of calculating any difference between what you owe on your mortgage and the overall value of your property.

    Comprehend Both The Market And Dynamics When Buying

    It's best to analyze what other properties are available in the area when you're looking at an investment property. It's very advisable to actually talk to both local people and real estate agents in the neighborhood. They can give you hints on small, yet vital, things like which side of a street is considered more desirable.

    These are the six tips to help make sure that you don't ever get fleeced when buying an investment property. They can make the difference between purchasing a great property that has a high return on investment and purchasing a lemon.

    Call your trusted Real Estate professional today for more information.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - June 9, 2014

    Last week's economic news was mixed. Construction spending grew, but fell below the expected level. CoreLogic reported that April home prices continued to rise, but did so at their slowest growth rate in more than a year. Employment reports for private sector and government jobs indicated fewer jobs, but the national unemployment rate was steady. Here are the details: What’s Ahead For Mortgage Rates This Week – June 9, 2014

    Construction Spending, Home Price Growth Slows

    Construction spending reported by the Department of Commerce reached $953.5 billion annually, and increased by 0.20 percent month-to-month against expectations of an 0.80 percent increase and the March reading of 0.60 percent growth.

    According to CoreLogic, the rate of home price growth slowed to 10.50 percent year-over-year in April as compared to the 11.10 year-over-year rate of increase in April 2013. Home prices increased by 2.10 percent over March; these gains in home prices were the slowest posted in more than a year, but there was good news.

    No states posted a drop in home prices, and eight states posted new record highs for home prices.

    CoreLogic said that although a short supply of available homes has driven home prices up, price gains lost momentum due to affordability; CoreLogic expects home prices to increase at a slower pace and projects that home price growth will reach a pace of 6.30 percent by April 2015.

    Mortgage Rates Mixed

    Freddie Mac reported that mortgage rates for fixed rate mortgages rose while the average rate for a 5/1 adjustable rate mortgage fell. The average rate for a 30-year fixed rate mortgage increased by two basis points to 4.14 percent; discount points fell to an average of 0.50 percent. The average rate for a 15-year fixed rate mortgage also increased by two basis points to 3.23 percent; discount points were unchanged at 0.50 percent. Rates for a 5/1 adjustable rate mortgage averaged 2.93 percent, a drop of three basis points. Average discount points rose from 0.30 to 0.40 percent.

    Jobs, Unemployment Data Suggest Economic Strength

    Labor markets impact consumer decisions to buy homes; several labor-related reports released last week indicated that the economy continued to gain strength as more jobs were added and fewer workers filed jobless claims.

    ADP reported that 179,000 private-sector jobs were added in May as compared to 215,000 jobs added in April. The Bureau of Labor Statistics released its Non-farm Payrolls report for May; 217,000 jobs were added as compared to projections of 210,000 jobs added and 288,000 jobs added in April.

    New weekly jobless claims were reported at 312,000 as compared to expectations of 311,000 new jobless claims and the previous week's 304,000 new claims. The four-week rolling average of weekly jobless claims fell by 2250 new claims to 310,250; this was the lowest reading since June 2007, and was 10 percent lower than the reading for the same week in April 2013 and was 17 percent lower than for the same week in 2012.

    Another sign of economic growth was reported last week. Continuing jobless claims dropped to a seasonally-adjusted annual rate of 2.60 million for the week ended May 24; this was the lowest reading reported since October 2007.

    The national unemployment rate for May matched April's reading of 6.30 percent, and was lower than projections of 6.40 percent for May. The Federal Open Market Committee of the Federal Reserve (FOMC) has repeatedly cited an unemployment rate of 6.50 percent as a benchmark indication of economic recovery; it appears likely that the Fed may continue its tapering of asset purchases as it winds down its quantitative easing program.

    What's Ahead

    This week's scheduled economic news includes Retail Sales, Retail Sales without vehicle sales, and the Producer Price Index. Freddie Mac mortgage rates and Weekly Jobless Claims will be released Thursday, and the University of Michigan will release its Consumer Sentiment Index on Friday.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - June 2, 2014

    Last week's economic news was fairly quiet due to the Memorial Day holiday on Monday and no scheduled news released on Wednesday. What’s Ahead For Mortgage Rates This Week – June 1, 2014

    Home Prices Post Modest Gains, But Growth Rate of Home Prices Slows

    Tuesday's release of the S&P Case-Shiller Home Price Index for March showed that home prices are edging up, but at a slower pace than last year. Home prices increased by 12.40 percent year-over-year as compared to February's reading of 12.90 percent year-over-year.

    Analysts expected prices to fall as construction picks up and more homes are listed for sale. Lower demand due to strict mortgage lending standards and high home prices continued to keep many moderate-income and first-time home buyers on the sidelines.

    FHFA Reports Home Prices Increased By Over 6 Percent

    FHFA, the agency that oversees Fannie Mae and Freddie Mac also released its home price index for properties connected with Fannie Mae or Freddie Mac owned or guaranteed loans. As of March, FHFA reported that home prices increased by 6.50 percent year-over-year as compared to February's year-over-year reading of 6.90 percent.

    Consumer confidence rose by 1.30 percent for May with a reading of 83.0, which matched expectations.

    Last Thursday's news included the weekly Jobless Claims report, which showed 22,000 fewer jobless claims than expected with a reading of 300,000 new jobless claims reported. Thursday's reading was also lower than the prior reporting period's reading of 327,000 new jobless claims filed.

    The four-week rolling average of jobless claims also showed improvement with 11,250 fewer claims filed and an average reading of 311,500 new weekly jobless claims filed. This was the lowest number of jobless claims filed since August 2007. Analysts look to the four-week rolling average as more accurate than the weekly readings, which can be volatile.

    U.S. jobs have increased by 200,000 jobs per month over the last three months reported.

    Pending Home Sales Up for Second Consecutive Month

    Pending home sales in April rose by 0.40 percent from the March reading of 97.4 to 97.8. The April reading was the highest for pending home sales since November. Pending home sales provide an estimate of future home sales.

    Lower mortgage rates likely supported expanded home sales. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage was 4.12 percent, a drop of two basis points from last week. The rate for a 15-year fixed rate mortgage fell by four basis points to 3.21 percent.

    The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.96 percent. Discount points were unchanged at 0.60 for a 30-year fixed rate mortgage and 0.50 percent for a 15 year mortgage. Discount points dropped from 0.40 to 0.30 percent for a 5/1 adjustable rate mortgage.

    What's Ahead

    In addition to construction spending for April, this week's economic news includes several reports that can provide insight about employment and consumer spending.

    News events include Motor Vehicle Sales for May, The Fed's Beige Book report, and Thursday's usual release of Freddie Mac's average mortgage rates and weekly Jobless Claims. Non-farm Payrolls and the national unemployment rate for May are also scheduled for release

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • FOMC Minutes: Committee Discusses "Normalizing" Policy

    April's meeting of the Fed's Federal Open Market Committee was held along with the Board of Governors of the Federal Reserve System. FOMC Minutes: Committee Discusses “Normalizing” Policy

    Meeting minutes released Wednesday indicated the committee's interest in "normalizing" its monetary policy. This included the FOMC's ongoing commitment to tapering its asset purchases under its quantitative easing program.

    The committee agreed to taper the Fed's monthly asset purchases by $10 billion to $45 billion per month. Committee members discussed raising the target federal funds rate, which now stands at 0.00 to 0.25 percent, but the minutes clearly stated that this topic was undertaken as part of "prudent planning, and did not indicate that normalization would necessarily begin sometime soon."

    The FOMC minutes reflected the committee's concern with achieving a balance between normalizing the Fed's monetary policy and keeping short-term interest rates under control.

    Meeting attendees considered methods for managing interest rates and considered potential impact of each method discussed on overall financial stability.

    Importance Of Early Communication

    Meeting participants discussed the importance of early communication of pending changes to the Fed's monetary policy, and agreed that advising the public "well before the first steps in normalizing policy become appropriate."

    Early communication to the public of planned changes was viewed as a means of providing clarity and credibility to FOMC policy decisions and help FOMC achieve its statutory goals of maximum employment, stable pricing and moderate long term interest rates.

    Potential Impact Of Achieving Normalcy

    FOMC members discussed the possible impact of tools considered for use in normalizing the economy on the following:

    • Fed control over short-term interest rates
    • The Fed's balance sheet and Treasury remittances
    • Functionality of Federal Funds Market
    • Financial stability in normal times and times of stress

    The minutes noted that the Fed has never used any of the methods discussed while the Fed held a large balance sheet, and recommended that flexibility in using tools for achieving normal fiscal policy.

    No decision was made about normalizing current monetary policy; FOMC and Fed Board members agreed that further study and analysis were needed before any decisions would be made.

    Fed: Mortgage And Refinance Applications "Tepid"

    The FOMC minutes characterized the level of mortgage and refinance applications through March as tepid, due to increasing mortgage rates and home prices.

    While a survey of senior loan officers revealed that mortgage credit had been loosened for applicants with prime credit, mortgage credit remained tight for those with less than excellent credit.

    The unemployment rate held steady at 6.70 percent and remained above the FOMC's benchmark of 6.50 percent. There was some good news as the workforce expanded and the ranks of the long-term unemployed decreased.

    Stable employment is important to potential home buyers; if unemployment levels continue to fall, numbers of home buyers are likely to increase.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - May 27, 2014

    Federal Reserve Speeches Suggest Concerns Over Monetary Policy Dependence, Low Inflation What’s Ahead For Mortgage Rates This Week – May 19, 2014

    Here are highlights of comments made by each of the Fed presidents' speeches. Richard Fisher, president of the Dallas Fed, and John Williams, President of the San Francisco Fed, spoke at a conference held at the Bush Institute.

    Mr. Fisher said that 98 percent of jobs lost during the recession had been recovered, and that other jobs had been added. He also cited "bad fiscal policies," and said he is worried about dependence on the Fed's monetary policy when "Congress and the Executive Branch have put on the brakes."

    John Williams, president of the San Francisco Fed, said that he was concerned about slowing momentum in housing markets, although he noted that housing had driven economic recovery in the aftermath of the recession.

    The inflation rate has remained well below the Federal Reserve's target rate of 2.00 percent, and Mr. Williams said that the Fed is paying close attention to this. His remarks were supported in Wednesday's release of the FOMC minutes of its April meeting.

    Charles Plosser, the Philadelphia Fed's president, took an optimistic tone at a speech given before the Women in Housing Foundation on Tuesday. He said that the national unemployment rate could fall below 6.00 percent by the end of 2014 and that he expects the housing market to bounce back as well.

    This makes sense, as strong labor markets are known to influence consumer decisions to buy a home.

    New York Fed President William Dudley spoke before the New York Association for Business Economics, and said that there would be "a considerable period of time" between when the current asset purchase program ends and the first Fed rate hike would occur.

    He also indicated that he expected longer-term interest rates (which include mortgage rates) to be "well below" a historical average of 4.25 percent.

    Minneapolis Fed President Narayana Kocherlakota said that the Fed should consider targeting price levels rather than the current policy of targeting the inflation rate. He said that this was not likely to occur any time soon, but noted that current Fed policy is "undershooting" the central bank's goals for unemployment and inflation.

    Fed Chair Janet Yellen cited her predecessor, Ben Bernanke as a positive example when she spoke at New York University's commencement. She noted that he took "courageous actions unprecedented in ambition and scope" and that his "grit willingness to take a stand" had directed his decisions during the recession.

    Mortgage Rates Down, Existing Home Sales Up

    Freddie Mac reported that average mortgage rates dropped last week. The average rate for a 30-year fixed rate mortgage fell to 4.14 percent, a drop of six basis points. The rate for a 15-year fixed rate mortgage fell by four basis points to 3.25 percent.

    The average rate for a 5/1 adjustable rate mortgage dropped by five basis points to 2.96 percent. Discounts were unchanged at 0.60 percent for 30-year mortgages and 0.40 for 5/1 adjustable rate mortgages, but dropped to 0.50 percent for 15-year mortgages.

    Sales of existing homes rose to their highest level in four months according to the NAR. Month-to-month sales of previously-owned homes rose by 1.63 percent in April to a seasonally adjusted annual rate of 4.65 million sales as compared to March's reading of 4.59 million sales. This was the first rise in sales of existing homes in 2014, and nearly met expectations of 4.66 million sales.

    This Week

    After the Memorial Day holiday, this week's economic news includes the Case-Shiller Home Price Index, FHFA's house price index and consumer confidence index.

    Pending home sales, jobless claims and Freddie Mac's mortgage rates report along with the University of Michigan consumer sentiment index round out the week's scheduled events.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - May 19, 2014

    Last week's economic news was relatively flat, but highlights include the NAHB Housing Market Index for May, which posted its lowest reading since May 2013. Although analysts expected a May reading of 48, the May 2014 index reading was 45 as compared to April's reading of 46. What's Ahead For Mortgage Rates This Week - May 19, 2014

    The NAHB reported that rising home prices and unpredictable job markets were factors in builders' loss of confidence. Although the economy is growing stronger, many would-be homebuyers remain skeptical of economic conditions and remain on the sidelines.

    NAHB: Stronger Builder Confidence Expected in Coming Months

    Builder confidence in market conditions for single family homes within the next six months were higher at 57, a one-point improvement over April's reading. Builder confidence in buyer foot traffic increased by two points to 33; this was likely a result of warmer weather. David Crowe, chief economist of the NAHB, said that builder confidence is expected to improve as consumers grow more secure about their employment.

    Economy: Retail Sales Slow

    Retail sales for April posted a gain of 0.10 percent over the March reading of an upwardly revised 1.50 percent and expectations of 0.40 percent for April. The Commerce Department reported that without the automotive sector, April's retail sales were unchanged. The difference between March and April retail sales readings was attributed to a burst of spending after severe winter weather and the Easter holiday.

    Mortgage Rates, Jobless Claims Lower

    Freddie Mac reported lower average mortgage rates across the board, with the average rate for a 30-year fixed rate mortgage one basis point lower at 4.20 percent. The average rate for a 15-year mortgage was three basis points lower at 3.29 percent. Discount points for 30 and 15-year mortgages were unchanged at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage fell by four basis points to 3.01 percent. Discount points dropped from 0.50 percent to 0.40 percent. 

    New Jobless claims fell from the prior week's reading of 321,000 to 297,000. Analysts had expected jobless claims to be unchanged from the prior week's reading.

    Manufacturing Sector Shows Strength

    The Empire State Index, which measures manufacturing growth in New York rose to 19.0 in May against an expected reading of 5.0 and April's reading of 1.3. The Philly Fed Index, another indicator of manufacturing, surpassed its expected reading of 14.3 and came in at 15.4, but May's reading was lower than April's 16.6.

    This Week

    This week's scheduled economic news includes the release of the minutes of the last FOMC meeting, New Jobless Claims, Freddie Mac's report on mortgage rates, Existing Home Sales, New Home Sales and Leading Indicators. 

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • Stop The Rot: The Easy Guide To Preventing Dry Rot In Your Home

    Did you know that dry rot is ironically created from having too much moisture come in contact with wood? Stop the Rot: The Easy Guide to Preventing Dry Rot in Your Home

    The fact is many homeowners are unaware that dry rot is even setting in, so the first step toward prevention is being able to diagnose possible areas of exposure before dry rot becomes a major renovation expense.

    Remember that dry rot to your foundation can be an extremely costly repair and will definitely figure prominently into the total value of your property when a house inspection is completed prior to a sale.

    As well, fungus and mold spores can affect the air quality of your home, which is a health problem for not only you and your family but also for prospective buyers.

    Identifying Leaks To Your Water Membrane

    In a very simple sense, discovering moisture or a leak on a wall or ceiling is an early sign that damage is occurring. Always inspect ceilings for particular evidence, especially around skylights and exhaust piping, as well as heating or cooling ducts. If damage was done to your roofing membrane during an installation or renovation, water can seep through.

    Do an inspection of your basement in order to determine if any discoloring is happening to walls or wood. If you can smell mold or mildew, you may have a problem. However, this doesn't mean that you're already suffering from dry rot, just that the area is a hazard and should be sealed properly. Deal with the cause of the leak before you proceed to the repair stage.

    Replacing The Affected Areas

    If you have discovered wood that is either in the process of rotting, or has succumb to some water damage, the best thing to do is simply replace it. Once you've sealed the leak that initially caused the damage, discuss with your contractor the scope of the replacement job.

    When installing new wood, it's best to make sure that it's treated with a Borate wood preservative to prolong its life and resilience to fungal infection. In some cases, you may not need to replace wood at all. You may be able to get away with only cleaning and then treating the area with Boric Acid, a fungicide that will slow down the spread of existing fungus and kill future growth.

    Choosing The Right Fungicide And Preservative

    This step will depend on the unique needs of your home's situation. Generally, you have the option to choose between a dry powder and a glycol-based liquid concentrate. While the powder may appear less expensive, it may not do as thorough a job of absorbing deeply into the wood fibers.

    Depending on the depth of fungal intrusion, you may need to use the more powerful liquid substance. Both are easy to apply, so you should be able to tackle this task yourself.

    Maintaining the quality of your home is essential for keeping up its value when it comes time to sell. Call your trusted real estate professional today for more advice on preserving the value of your investment and identifying areas of risk and exposure to dry rot.

    Remember that it's far easier to deal with problems now before they develop into major expenses down the road.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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  • What's Ahead For Mortgage Rates This Week - May 12, 2014

    Results from a Federal Reserve survey of senior bank loan officers indicated that lenders have held the line on prime lending standards and have raised standards for sub-prime and non-traditional home loans. What's Ahead For Mortgage Rates This Week - May 12, 2014

    Survey respondents represented 74 U.S. banks and 23 foreign banks. Survey respondents also said that demand for mortgage loans was lower; this could be an unintentional result of tight credit standards for mortgage loans.

    Analysts said that tight credit requirements and less demand for home loans could mean more trouble for the housing industry.

    Home Prices Rise In March, But At Slower Rate

    The annual rate of increase for national home prices was 11.10 percent as compared to February's 11.80 percent year-over-year rate of increase.

    February's reading was the fastest pace of home price growth in eight years, but March's slower level of home price appreciation was the lowest month-to-month reading in three years. Fewer affordable homes were cited as a reason for slower growth in housing markets.

    CoreLogic reported that home prices rose by 1.40 percent in March, and that Arkansas was the only state that posted a drop in home prices. Several states, including North Dakota and Texas, achieved new peaks in home prices due to strong job growth.

    The slow-down in home price growth isn't necessarily all bad news; analysts said that home prices could not continue to climb when household incomes aren't keeping up.

    Many first-time buyers have been sidelined with a combination of slow job growth, higher home prices and tight mortgage credit. CoreLogic reported that these factors contributed to their forecast for home prices to grow by about 6.70 percent in 2015.

    Mortgage Rates Fall, Fed Chair Speaks

    Freddie Mac reported lower average mortgage rates on Thursday. The rate for a 30-year fixed rate mortgage was 4.21 percent as compared to last week's reading of 4.29 percent. Discount points dropped from 0.70 to 0.50 percent. The average rate for a 15-year mortgage was 3.32 percent and six basis points lower than the prior rate of 3.38 percent.

    Discount points were unchanged at 0.60 percent. The rate for a 5/1 adjustable rate mortgage was unchanged at 3.05 percent, but discount points dropped from 0.50 to 0.40 percent.

    Janet Yellin, chair of the Federal Reserve, spoke before the Senate Budget Committee on Thursday and said that the Fed can shrink its current balance sheet of $4.3 trillion by not reinvesting proceeds from its portfolio of maturing bonds.

    This is directly connected to the Fed's tapering of its quantitative easing (QE) program, which is currently at a level of $45 billion per month in mortgage backed securities (MBS) and treasury securities.

    Some analysts believe that members of the Fed's FOMC meeting discussed the end of QE in their last meeting, but this cannot be verified until the minutes of the meeting are released May 21.

    The end of QE could cause higher mortgage rates as the program's purpose is to hold down long-term interest rates.

    Weekly Jobless claims fell to a new low of 319,000 against predictions for 325,000 new jobless claims and 345,000 new claims for the prior week. Seasonal anomalies caused by the Easter holiday and spring break schedules were cited as causes for ups and downs in new jobless claims in recent weeks.

    What's Next

    This week's scheduled economic news includes several consumer-related reports including Retail sales, Consumer Price Index, core CPI, Homebuilder's Index, and Housing Starts.

    BOB ELLIOT - REALTOR® CRS, GRI, e-PRO, CDPE

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