PMZBuzz

Mortgage markets rallied Tuesday while Fed Chairman Ben Bernanke gave his semi-annual testimony to Congress.  By the time the day was over, some conforming mortgage rates were down by as much as 0.250 percent.  One of the leading causes for the market rally was Chairman Bernanke revealing an “exit strategy” from its massive market stimulus. 

Until Tuesday, the Fed hadn’t gone into much depth about means and methods by which it would unwind its interventions.  In addition to penning a widely-read Op-Ed piece in the Wall Street Journal Tuesday, Bernanke testified to Congress that the Federal Reserve has a viable “exit strategy”.  Wall Street was pleased to hear it. 

The specter of long-term inflation has spooked the mortgage markets off-and-on since the start of the year.  It’s one of the reasons why mortgage rates have been so jumpy, and why they crossed 6 percent last month.  Inflation is terrible for mortgage markets.  So, with the fear of inflation subsiding — at least temporarily — mortgage rates sunk Tuesday.  With any bit of luck, momentum will carry rates lower today and through the rest of the week.  But, don’t get greedy.  Mortgage markets are notoriously fickle and one “bad” statement from the Fed Chairman could cause rates to rise right back up.  Bernanke’s complete Tuesday testimony can read online at the Federal Reserve website.

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

Housing Starts soared in June, thumping analyst expectations for the second straight month.  A “housing start” is a new home on which construction has started.  Last month’s jump in single-family starts is the largest one-month jump since 2004.  To Wall Street, June’s figures are the latest signal that the country’s housing markets may be on the mend.

For home sellers, however, the news may not be so rosy.  With more homes expected to come on the market, price competition among sellers could intensify and — all things equal — that would push sales prices lower.  So far in 2009, that hasn’t happened.   As home supply has grown, it’s been met by off-setting buyer demand.  Spurred by low mortgage rates and an $8,000 first-time homebuyer tax credit, Americans appear to find today’s home buying conditions somewhat ideal. 

As a result, purchase activity has been strong and first-time home buyers now account for close to 30 percent of existing home sales.  Rising Housing Starts can be a double-edged sword.  It shows strength that builders are more optimistic about the economy, but too much optimism can lead to a glut of unsold homes and that could reverse the recovery’s momentum.

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

The government’s First-Time Home Buyer Tax Credit expires December 1, 2009.  If you expect to use the program in conjunction with a home purchase, therefore, you may want to consider yourself officially “on the clock”.  Assuming a 60-day window between contract and closing, there are now 77 days left to find a home and go under contract for it.

The First-Time Home Buyer Tax Credit refunds up to $8,000 at Tax Time for qualified home buyers.  A few of the program’s qualification criteria include:

• Home buyer must not have owned a primary residence in the past 36 months
• The home may not be purchased from a family member
• The household adjusted gross income must be below $95,000 for single tax filers and $170,000 for joint tax filers

The tax credit itself is limited to $8,000 or 10% of the purchase price, whichever is less.  Remember, though: The refund is a true tax credit — not a deduction.  This means that a taxpayer owing $8,000 to the IRS and claiming the $8,000 First-Time Home Buyer Tax Credit would owe the IRS nothing on April 15, 2010.  The complete list of qualifying criteria is posted on the IRS website….

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

For the fourth consecutive month, the country’s foreclosure activity was dominated by a small number of states.  As reported by RealtyTrac.com, more than 50 percent of the country’s foreclosure-related actions in June concentrated in just 3 states:

1. California
2. Florida
3. Nevada

The states rounding out the Top 10 include Arizona, Georgia, Michigan, Texas, Ohio, Illinois and Colorado.  Meanwhile, June’s reported foreclosure figures are consistent with the data from earlier this year, suggesting that the foreclosure remedy plans put forth by the government and by lenders can barely keep pace with the national default rate.

Foreclosure-related actions nationwide are up 5 percent from May.  The silver lining in data this negative is that foreclosures are creating tremendous buying opportunities for the right buyers….

To read the rest of this mortgage industry blog, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

If you’ve been driving lately, you’ve noticed that the cost of a fill-up has gone down.   According to GasBuddy.com, retail gas now costs $2.52 per gallon, on average nationwide.  Since peaking in mid-June, gas prices are down 6 percent.  For the economy, this is an important story. 

Because Americans are spending less at the gas pump, they’re left with additional dollars to spend in other ways including for everyday items like food and shelter, plus for luxury items, too.  Consumer spending accounts for a huge part of the U.S. economy and falling gas prices give economists one more reason to believe a full economic recovery may be close.   With Back to School season around the corner and the holidays looming, a mini Wealth Effect could propel the economy forward and out of recession.  Falling gas prices can be good for mortgage rates, too….

To read the rest of this mortgage industry blog, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com