Mortgage rates pop on existing home sales

October 26th, 2010

Good news for housing markets past leads to some not so good news for housing market present. Backed by strong housing data investors have put a spike in the rate market early in the week. Using prequalification calculators is wise preparation for purchasing a new home, but the results are only as relevant as the information you put in, including interest rates, which have been fluctuating based on economic data.

Existing home sales up in September

The National Association of Realtors announced that sales of existing homes in September increased 10 percent to an annual rate of 4.53 million homes. It is the second month in a row that existing home sales have increased, as August sales were 7.3 percent higher than July.

Following sharp drop-offs in sales following the expiration of home buyer tax credits, back-to-back increases in home sales might appear to be a positive sign for the nation’s housing markets.

Foreclosure scandal could sap upward trend

However, those September sales occurred before the current foreclosure saga that has come to light in recent weeks. Lenders have been accused of using sloppy and possibly illegal processes in foreclosing on homes in many states. The revelation that began with a home in Maine and then swept across the country that foreclosure documents were signed without knowledge of their contents, were missing information or in some cases were just plain missing altogether, has put doubts back into the market.

Lawsuits from former homeowners who were foreclosed upon, slowdowns in foreclosures by lenders and reluctance from buyers to purchase foreclosures all could dampen further sales. The lawsuits are already beginning in some states. Lenders have slowed down foreclosures to review the processes. And evidently buyers are withdrawing from the market.

In a survey taken by the National Association of Realtors this month 23 percent of those surveyed said they have a client who is no longer interested in purchasing a foreclosed property due to the controversy. The reluctant buyers do not want to become tangled in a lawsuit between a former owner who was foreclosed upon and the lender who is selling the property.

Does this affect your purchasing a new home? When using mortgage calculators for your new home loan are you considering avoiding purchasing a foreclosure?

Mortgage rates pop up

With the positive economic data on home sales, investors this week have been selling mortgage-backed securities. With sellers more prevalent than buyers, prices have dropped causing interest rates to spike up early in the week. Coming off the lowest rates on record for Freddie Mac two weeks ago and the second lowest rates on record last week, investors appear not to be ready for another record setting week.

If you are using a refinance calculator to determine your monthly mortgage savings, or prequalification calculators to calculate your purchasing power for a new home loan, you might consider padding your interest rate a little to account for a volatile rate market.

Posted By :
Dennis C. Smith is co-owner and broker of record for Stratis Financial in southern California. He has over twenty years' experience in the mortgage industry.

Prequalification calculator tips and tricks

March 02nd, 2011

Are you paid weekly or every other week? Is semi-monthly the same as bi-weekly? One of the most important duties performed by a...  Read More

Home price and sales data show weaker housing markets

February 28th, 2011

If you've been thinking 2011 is the year for you to purchase a new home you may be weighing whether to purchase before rates climb...  Read More

Trust yourself, trust your home

February 22nd, 2011

Every newspaper has a section where, if you are in it, you will not be able to read your name and the story. It is the obituary section. Reading...  Read More

Mortgage rates remain above 5 percent as consumer prices rise

February 18th, 2011

There is a relationship between prices you pay in the store and the rate on your new home loan or refinance mortgage. This week two key indexes on prices were...  Read More

0 Responses to "Mortgage rates pop on existing home sales"

No Comments

Leave a Comment