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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.

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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.

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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. 

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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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  • Protect Your Home When You're On Vacation With These Five Simple Tips

    When making plans for a fun-filled vacation, you shouldn't forget implementing certain home security measures to ward off thieves. Nobody wants to return home only to find that intruders had ransacked the residence from top to bottom.

    If you're going away on vacation, make sure you protect your home against break-and-enters with these five tips. Protect Your Home When You’re on Vacation with These Five Simple Tips

    Alarm Intruders With Audible Deterrence Measures

    Installing a professional home security alarm is one of the most cost-effective ways for people to protect their homes when they are away.

    Buying and setting up the right system will ensure that the proper authorities will be notified if thieves break in or attempt to force their way in.

    While determined crooks will be hard to discourage, most would-be intruders will look for easier targets if they inadvertently trigger a loud, piercing alarm that attracts too much attention from anyone who could call the police.

    Make Forced Entry Difficult With Solid Doors

    Some thieves will take a very direct approach to break-ins by simply trying to force their way through a locked door. If the exterior doors are hollow, thieves will have a pretty easy time getting through. This is why it is important to install solid doors rather than hollow ones; solid doors are much harder to break through.

    If you're concerned about intruders forcing their way through your hollow doors, your best recourse is to upgrade to solid doors. Upgrading will cost a pretty penny, but the added protection they will provide will be well worth the investment.

    While getting solid doors installed, you can go one step further by investing in good locks, deadbolts and reinforced strike plates.

    Do Not Advertise Your Departures

    A pile of newspapers at the front door or a mailbox full of mail and flyers will be proof positive to crooks that no one's home. Homeowners who are going to be away on vacation should ask neighbors or other people they trust to collect their mail while they are away.

    If having a neighbor collect your mail isn't an option, go to the post office and request that mail service to your home be suspended until you get back. It is also best to suspend newspaper deliveries for the vacation period as well.

    Neighborhood Watch To The Rescue

    One great home security solution that won't cost a penny is having neighbors who look out for you. Homeowners would do well to ask trusted neighbors to keep an eye on their property while they are away on vacation. Tell those trusted neighbors to be on the lookout for any suspicious activity and to call the authorities if necessary.

    Protect Sliding Doors With This Simple Trick

    Before heading off on vacation, you should safeguard the sliding glass doors in your home by putting something like a metal rod in the track. This way, thieves will not be able to force the door open.

    Vacations are a time to unwind and to have some fun. However, responsible homeowners will do what it takes to make their residence less attractive to would-be thieves while they are away.

    For more information on how to safeguard your home, or to get answers to your pressing real estate questions, contact your trusted real estate professional for prompt and practical advice.

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

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  • Maximize Your Backyard's Privacy With These Unique Ideas

    If you're a homeowner, your backyard is probably a space where you look forward to spending private, quality time watching your children play or entertaining dinner guests. Maximize Your Backyard’s Privacy with These Unique Ideas

    The privacy you and your family treasure could suddenly be put at risk if your neighbors finish renovations allowing them to see into your backyard, or if a tree that once hid your backyard from view needs to be removed. If you're looking to reclaim the privacy you've lost in your yard, here are some options you will want to consider.

    Your Property Line Is A Natural Barrier That You Can Use To Reclaim Your Family's Privacy

    The first option you might consider if you're looking to reclaim your yard's privacy is probably building a fence - but depending on your budget, your relationship with your neighbors, and the look you want in your yard, a fence might not be the best option.

    Consider planting a fast-growing hedge or other greenery along your property line instead. Italian cypress, for instance, will look great, grow very quickly, and will eventually give you all the privacy you need.

    Break Up Your Nosey Neighbors' Line Of Sight By Installing Raised Beds Or Berms

    If you already have a green thumb and love nothing more than working on your backyard garden, you can have your cake and eat it too by replanting your current backyard plants in raised beds or berms.

    Raised beds will add up to two or three feet of height to your plants without taking away the area or square footage in the rest of your backyard, making it an ideal option for homeowners will smaller backyard spaces. Installing raised beds or berms could also be a great solution for your garden if you have trouble planting due to the presence of clay or simply poor soil.

    Lumber Isn't Your Only Fencing Option

    Though fencing seems like an obvious and possibly boring option to liven up your backyard and improve the aesthetic of your space at the same time, there are ways you can get creative with fencing that you might not have considered. Putting in latticework can alleviate the claustrophobic feeling that might come with enclosing your space fully with a solid fence, giving you some visibility through the lattice.

    You can spice up the look of your enclosure by weaving plants through your lattice, or if you have the patience, get some ivy growing through your enclosure.

    Maximizing the privacy of your outdoor space is easy if you're creative and you enjoy working outdoors. If you love nothing more than pruning and shearing, then try to reclaim your space through planting rather than installing a fence or another permanent structure that you can't change and therefore might regret later.

    If you're worried about how your backyard transformation could affect the value of your home, or if you're looking for more privacy options, contact a real estate professional that you trust for the backyard design help you need.

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

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  • What's Ahead For Mortgage Rates This Week - May 5, 2014

    Last week's economic news included several reports related to housing and mortgages. The NAR started the week on a positive note with its Pending Home Sales Index released Monday. Pending home sales in March were higher with an unexpected increase of 3.40 percent over February for an index reading of 97.40. What’s Ahead For Mortgage Rates This Week – May 5, 2014

    This is encouraging news for home sales that were severely affected by a hard winter in many areas, and suggests that as warmer weather approaches, home sales will pick up. Analysts do not expect the rapid rate of price appreciation seen in 2013. The Fed's tapering of its "quantitative easing" program has caused mortgage rates to rise, and last year's rapid run-up of home prices has made affordability an issue in many areas.

    The S&P Case-Shiller Home Price Index for February performed slightly better than expected with a seasonally-adjusted month-to-month reading of 0.80 percent. The expected reading was 0.70 percent.

    The year-over-year reading fell short of January's reading of 13.20 percent and the expected reading of 13.00 percent at 12.90 percent. Analysts noted the continuing trend of slowing momentum in home price growth, but seem confident that home prices will continue to increase over the spring months.

    Fed Continues Tapering Of QE, Mortgage Rates Mixed

    Wednesday brought the FOMC's customary statement after its two-day meeting concluded. There were no surprises as the statement verified another monthly tapering of $10 billion from the Fed's quantitative easing (QE) program of asset purchases.

    The tapering was evenly divided with $5 billion less in MBS purchased and $5 billion less in treasury securities purchased. The ongoing tapering was seen as contributing to rising mortgage rates, but the Fed asserted that its asset purchases remain sufficient to dampen rapid increases in long-term interest rates, which include mortgage rates.

    The Fed repeated its usual reminder that its decisions are not on a pre-set course and that the committee members would closely monitor economic and financial developments as guidance for future decisions.

    Freddie Mac reported mixed results for mortgage rates on Thursday. Average rates rose by four basis points to 4.29 percent for a 30-year fixed rate mortgage with discount points of 0.70 percent.

    The average rate for a 15-year fixed rate mortgage dropped by one basis point to 3.38 percent; discount points steady at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by two basis points to 3.05 percent; discount points dropped from 0.50 to 0.40 percent.

    Weekly jobless claims made an unexpected jump to 344,000 as compared to the prior week's revised figure of 329,000 jobless claims and an expected reading of 320,000 new jobless claims.

    Analysts note that week-to-week figures continued to show volatility, but said that on balance, the rolling average for jobless claims appeared consistent with moderate growth in labor markets.

    This Week

    This week's scheduled economic news shows no events related to housing and mortgages. Highlights include Fed Chair Janet Yellen's appearance before the Joint Economic Committee in Washington, D.C. and the usual releases of mortgage rates and new jobless claims on Thursday. 

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  • FOMC Noted Retail Sales In March Reached Highest Level Since September Of 2012

    The FOMC of the Federal Reserve released its customary statement after its meeting concluded April 30. FOMC Noted Retail Sales In March Reached Highest Level Since September Of 2012

    FOMC members said that the economy is improving after a winter lull caused by poor weather. The national unemployment rate remains high, although some improvement in labor markets was reported. Fiscal policy is restraining economic growth, although FOMC said that the restraint is diminishing.

    FOMC Monitors Inflation, Further Reduces Asset Purchases

    The FOMC statement reflected members' concerns about the inflation rate remaining below its goal of two percent, and said that this could eventually impact economic recovery. The Fed expects inflation to approach its goal within the "medium term."

    The Fed will reduce its monthly asset purchases of mortgage-backed securities and Treasury securities to a total of $45 billion in May. FOMC members said that the Fed's level of asset purchases is sufficient to maintain downward pressure on long term interest rates and to support mortgage markets.

    The Fed expects to continue reducing its asset purchases as long as improvements in the labor market and general economic conditions occur. As of March, the national unemployment rate was 6.70 percent; the Fed previously established a goal of 6.50 percent unemployment as an indicator of economic recovery.

    The statement included its usual comment that asset purchases are not on a pre-set course and that FOMC members monitor economic reports and other financial data on an ongoing basis as part of the FOMC's decision making process.

    Fed Funds Target Rate Unchanged

    FOMC members agreed to maintain the Fed's current "highly accommodative" monetary policy and left the target Federal Funds rate at between 0.00 and 0.25 percent. The committee expects this policy to continue long after the asset purchase program concludes.

    FOMC members will continue to monitor economic and financial developments along with inflation to determine the course of the target federal funds rate.

    The FOMC noted that retail sales in March reached their highest level since September of 2012; this was viewed as a sign of a stronger overall economy.

    This FOMC statement mentioned inflation as a basis for reviewing monetary policy more than in recent statements, and clearly established maximum employment and the committee's target two percent inflation rate as benchmarks for decisions related to future policy decisions.

    April's unemployment rate is set for release on May 2.

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  • 4 Places Real Estate Agents Say, "Don't Go Cheap!"

    As most real estate agents will tell you, remodeling, decorating or repairing your home can go a long way towards getting it sold. For that matter, it can add value to your property in case you want to sell later - that is, if you don't choose the wrong places to buy cheap: 4 Places Real Estate Agents Say
    • Windows - Never buy a window based on which one is cheapest. You want windows that look good, and, as most real estate agents will recommend, you want energy-efficient windows. During 2009 and 2010, you may be eligible for a Federal Tax Credit for Energy Efficiency of up to $1500 when you purchase Energy Star windows.
    • Paint - Paint is one of the biggest places people skimp when it comes to cost, and a big no-no. Cheap paint may take several coats to look right; those several coats can end up leaving blotches and runs.  In addition, cheap paint has a tendency to peel or wash off under light cleaning.  If you're going to add painting to your remodeling or repair work, quality is always better.
    • Doors - Whether it's for a shower or a screened-in porch, the door you choose can make all the difference. A rickety shower door falling off the railing is a big "don't buy" sign. While you don't want to blow your whole budget, the doors throughout your house should be of quality material. Likewise, a solid front door adds to the curb appeal and security of your home. Some exterior doors also qualify for the Federal Tax Credit for Energy Efficiency. Find out if your exterior door qualifies for an Energy Star Rebate or Tax Credit.
    • Flooring - Unless it's expensive carpet on sale, cheap flooring never looks like anything but cheap flooring. Low cost carpet and wood flooring seldom has high durability and is likely to wear out before you're ready to replace it again. Take the time to find quality flooring at a price you can afford - don't go cheap!

    Many real estate agents will push quality, but the biggest point they'll push these days is - go green! It may not be the cheapest option, but the benefits in efficiency and property value more than make up for the cost.

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

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  • What's Ahead For Mortgage Rates This Week - April 28, 2014

    Last week's economic news supported recent reports that home sales were fewer and home prices increased, but did so at a slower pace. What's Ahead For Mortgage Rates This Week - April 28, 2014

    The NAR reported a slower pace of existing home sales, and FHFA reported a slower year-over-year rate of growth for home prices on properties financed by Fannie Mae and Freddie Mac.

    The U.S. Commerce Department reported that new home sales fell to their lowest level since July 2013. Mortgage rates rose for fixed rate mortgages, but were unchanged for 5/1 adjustable rate mortgages. Here are the details:

    Existing Home Sales Slow, Moderate Growth In Home Prices

    March sales of existing homes dipped by 0.20 percent according to the NAR. 4.59 million previously owned homes were sold on a seasonally adjusted annual basis against projections of 4.55 million sales and February's reading of 4.60 million pre-owned homes sold.

    Rising home prices contributed to the slowdown in sales, which started last summer. Rapidly rising home prices due to short supplies of available homes and high demand for homes caused some buyers to leave the market. The national average price for existing homes was $198,500 in March, which represented a year-over-year increase of 7.90 percent.

    The Federal Housing Finance Agency, which governs Fannie Mae and Freddie Mac, reported that home prices for homes financed with Fannie Mae and Freddie Mac owned mortgages rose by approximately 7.0 percent year-over-year as of February.

    Severe winter weather was cited as a possible factor in slowing home sales, but as the peak home buying season gets underway, analysts forecast that some sales lost may be recovered in warmer weather.

     Mortgage Rates Rise, New Home Sales At Lowest Level In 21 Months

    Freddie Mac reported that average mortgage rates for fixed rate mortgages rose. The rate for a 30-year fixed rate mortgage rose by six basis points to 4.33 percent; the rate for a 15-year fixed rate mortgage also rose by six basis points to 3.39 percent.

    The average rate for a 5/1 adjustable rate mortgage was unchanged at 3.03 percent. Discount points were also unchanged at 0.60,.60 and 0.50 percent respectively.

    Sales of new single-family homes slumped to their lowest level in since July 2012 according to the U.S. Department of Commerce. The median price of a new single family home rose to $290,000, which represented a 12.60 percent increase year-over-year.

    Analysts noted that month-to-month home sales numbers are not as reliable as sales trends measured over months, but 384,000 March sales of new homes fell markedly short of expectations of 450,000 new home sales and February's upwardly revised reading of 440,000 new homes sold.

    Unemployment Ups And Downs Contribute To Buyer Uncertainty

    New jobless claims rose to 329,000 against expectations of 315,000 new jobless claims and the prior week's reading of 305,000 new jobless claims. The Labor Department said that seasonal adjustments were incomplete due to the Easter holiday, which occurs on different dates.

    As labor and other sectors of the economy endure ups and downs during the economic recovery, it is reasonable to expect some home buyers to put off buying homes.

    This Week 

    This week's scheduled economic news includes Pending Home Sales, Case-Shiller's Housing Market Index, the FOMC meeting and statement and Construction Spending. The Bureau of Labor Statistics will release April's Non-Farm Payrolls Report and National Unemployment Report on Friday.

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

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  • What's Ahead For Mortgage Rates This Week - April 21, 2014

    Last week's economic news supported the general outlook for moderate economic growth. Housing related news included the National Association of Home Builders / Wells Fargo Housing Market Index for April and Housing Starts for March. What's Ahead For Mortgage Rates This Week - April 21, 2014

    NAHB: Builder Confidence Holds Steady Amid Concerns

    The NAHB/Wells Fargo HMI for April ticked upward by one point to a reading of 47 against the March revised reading of 46. Home builders surveyed expressed concerns about high home prices, a lack of available lots for development and a labor shortage. Some desirable markets have been held back due to low inventories of available and/or affordable homes.

    Builders surveyed for the HMI were asked to rate three components used in compiling the monthly index; these include current market conditions, market conditions expected over the next six months, and buyer foot traffic in newly built homes. April's readings were 51, 57 and 32 respectively.

    Readings for current market conditions and buyer foot traffic were unchanged from March, but builder confidence for market conditions in the next six months rose by four points.

    Any reading above 50 indicates that more builders are confident about market conditions for newly-built single-family homes than not. 

    Housing Starts Pick Up After Winter Storms, But Fall Short Of Expectations

    March Housing Starts rose by 2.80 percent at a seasonally adjusted annual rate of 946,000 starts as compared to expectations of 990,000 and February's reading of 920,000 housing starts, which was revised from 907,000 starts.

    The March reading represented a 5.90 percent decrease from March 2013, and is consistent with concerns expressed by home builders surveyed for the NAHB HMI for April.

    Building permits issued for March were also lower by 2.40 percent at a rate of 990,000 permits issued. This slippage was largely due to the falling rate of building permits issued for apartment construction.

    Higher home prices and mortgage rates along with inconsistent (but improving) labor markets were cited as reasons for builder pessimism, but analysts said that projects delayed by severe weather are expected to pick up in the coming months.

    Mortgage Rates Fall, Discount Points Hold Steady

    Last week's average mortgage rates fell across the board according to Freddie Mac's weekly Primary Mortgage Market Survey. The rate for a 30-year fixed rate mortgage fell by seven basis points to 4.27 percent. 15-year mortgages had an average rate of 3.33 percent as compared to the prior week's reading of 3.38 percent. 5/1 adjustable rate mortgages had an average rate of 3.03 percent, down from 3.09 percent the previous week. Discount points were unchanged at 0.70, 0.60 and 0.50 percent respectively.

    Fed Chair Upbeat In New York Speech

    Federal Reserve Chair Janet Yellen struck a positive note in a speech given before the Economic Club of New York last Wednesday. She indicated that the Fed and many economists expect a return to full employment and stable prices by the end of 2016. Analysts characterized Yellen's speech as upbeat on economic recovery and inflation, while "dovish" on monetary policy.

    Ms. Yellen reiterated the Fed's intention to monitor current and developing economic situations before making changes to its current monetary policy. She acknowledged that "twists and turns" in the economy could occur, and that Fed policy would shift as needed to address changes.

    The Fed also released its Beige Book Report last Wednesday. This report indicated that the economy is recovering in most areas of the U.S.

    This Week

    This week's scheduled economic news includes Leading Economic Indicators, Existing Home Sales for March, FHFA House Price Report for February and New Home Sales for March. The University of Michigan Consumer Sentiment report for April rounds out this week's news. 

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

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  • What's Ahead For Mortgage Rates This Week - April 14, 2014

    While little housing-related news was released, last week's economic news showed signs of a brighter economic picture. What's Ahead For Mortgage Rates This Week 4-14-14

    Labor statistics were stronger, with job openings up and new jobless claims filed lower than expected.

    Mortgage rates fell, and the University of Michigan's Consumer Sentiment Index was higher than expected.

    More Jobs Available, Fewer New Jobless Claims

    The Bureau of Labor Statistics (BLS) reported that February job openings rose to 4.20 million, which exceeded January's reading of 3.9 million jobs. New jobless claims were lower than expected with 300,000 new jobless claims filed against expectations of 316,000 new jobless claims and the prior week's reading of 332,000 new jobless claims filed.

    The Federal Open Market Committee (FOMC) of the Federal Reserve released minutes of its meeting held March 18 and 19. The minutes noted that payroll jobs expanded, but the unemployment rate remained elevated, and inflation was below the committee's goal of 2.00 percent. Indicators of longer-run inflation expectations were seen as stable.

    Severe winter weather was viewed as a cause for slowing economic activity. FOMC noted that it would be difficult to determine the effects of winter weather on the economy as opposed to slower economic growth caused by unemployment or other negative factors.

    Housing Starts and Building Permits were lower, but FOMC noted the impact of winter weather on these reports. FOMC asserted its intention to continue reducing its monthly asset purchases by $10 billion per month as economic conditions permit.

    The FOMC emphasized its commitment to continuous review of financial and economic news as it makes month-to-month decisions concerning asset purchases.

    Mortgage Rates Fall, Consumer Sentiment Rises

    Freddie Mac reported lower average mortgage rates last week. The rate for a 30-year fixed rate mortgage fell from 4.41 to 4.34 percent. The rate for a 15-year fixed rate mortgage dropped from 3.47 to 3.38 percent, and the rate for a 5/1 adjustable rate mortgage fell by three basis points from 3.12 percent to 3.09 percent.

    Discount points were unchanged at 0.70, 0.60 and 0.50 percent respectively. Lower mortgage rates may encourage more buyers into the market as the spring and summer buying season gets under way.

    The University of Michigan's Consumer Sentiment Index for April rose to 82.60 percent against the March reading of 80.00 percent and the projected reading of 80.80 percent. If expectations prove correct, this week's economic reports are expected to bring more good news.

    What's Coming Up This Week

    This week's scheduled economic news includes Retail Sales for March, which are expected to show a gain, the Consumer Price Index which is expected to hold steady, and the Home Builder Index, which is expected to rise.

    Projections for Housing Starts are also higher. Fed Chair Janet Yellen is set to give a speech in New York on Wednesday, and the Fed Beige Book report will also be released. This week's economic reports will wrap up Friday with Leading Economic Indicators.

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

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