Walden Mortgage Group's Weekly Newsletter

06/23/10 by Walden Mortgage Group

Sellers Stand Firm On Listing Prices

A new study by Trulia.com showed that sellers lowered their asking price at least once on 22 percent of homes listed for sale as of June 1st.  This means that 88% of sellers did not lower their asking price from listing to sale.

The 22% is a decrease from this time last year where the number was 23.6%.  More expensive homes ($2 million and up) saw the largest price reductions.  Real estate is very localized:  A year ago Las Vegas saw price decreases on 30% of all listings.  But this time around, they only dropped prices on 10% of homes listed for sale.  But in Kansas City, prices were dropped on 31% of homes listed compared to 20% a year earlier.

Obviously, low 30 year fixed mortgage rates and the now expired tax credit has helped.  But the improvement in the ratio of original asking price vs. sold price is more likely the result of properly listing the home at the correct and current market price.

Consumer Prices Remain Tame

The Consumer Price Index declined -0.20% last month according to the U.S. Department of Labor.  This is very important to housing because consumers will hold off on major purchases if they feel that the cost of every day items is increasing.  So, this report is a positive for housing.

The Producer Price Index also shrank.  It decreased -.30%, which means that costs are not increasing for manufacturers and it probably will lead to continued lower prices for consumers. 

What Happened to Rates Last Week

What Happened To Rates Last Week

Mortgage backed securities (MBS) gained +47 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans.  We saw our best rates on Friday as the MBS market moved upward on the very weak Philly Fed Manufacturing data.

What to Watch Out For This Week

Date ET Release For
22-Jun 10:00 Existing Home Sales May
22-Jun 10:00 FHFA Housing Price Index Apr
23-Jun 10:00 New Home Sales May
23-Jun 10:30 Crude Inventories 19-Jun
23-Jun 14:15 FOMC Rate Decision 23-Jun
24-Jun 8:30 Durable Orders May
24-Jun 8:30 Durable Orders ex Transportation May
24-Jun 8:30 Initial Claims 19-Jun
24-Jun 8:30 Continuing Claims 19-Jun
25-Jun 8:30 GDP - Third Estimate Q1
25-Jun 8:30 GDP Deflator Q1
25-Jun 9:55 U Michigan Sentiment - Final J Jun

The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  We will be watching these reports closely for you and let you know if there are any big surprises

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, we monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

Mike Dunn, Holleigh Sharp & Jeff Sharp
Walden Mortgage Group
Office: (859) 514-4444