Rain Ruins Weekend plus Urgent News for Buyers

They say rain is good in dry Southern California. My Saturday was rained-out. I had planned for an open house in Stevenson Ranch area of Santa Clarita for a fellow Realtor, but with the rain, everyone stayed home.

Buyers: economic signs may signal interest rates rise in the near-term. Lock in your best rate now and start shopping for your new home.

The Fed meets this week. CNN states, "there is a growing sense that the Fed may keep rates at 5.25 percent for the foreseeable future." As I stated in a prior post, most people think mortgage rates as being closely linked to the Fed's decisions, they're more closely linked to the bond market.

Last week, stronger than expected economic reports hit the wires, indicating a resilient economy: the inflation measuring Consumer and Producer Price Indexes (CPI and PPI) both were hotter than expected, showing some lingering inflation in the economy; Housing Starts and Building Permits were both reported as better than anticipated; Initial Jobless Claims were lower than expected, indicating a strong labor market; the Philadelphia Fed Manufacturing Index was higher than estimated; and to top off the week, the Consumer Sentiment Index came in very strong - a three year high!

We would therefore expect bond prices and home loan rates to rise. With all this strong economic news, it's surprising that Bond prices and home loan rates just stood there. Despite some midweek bouncing around on the news, Bonds and home loan rates ended up the week only slightly worse than where they started.

It's time for buyers to get off the fence and lock in loans - and shop for their new home!

Economics of Mortgage Rates

This week, I received a bit of news from the economic front, but before I get to it, some background. Looking over the past year, you might have heard "The Fed" keeping interest rates stable and raising them on at least one occasion. These rates that the Fed determines don't directly affect the mortgage rates. They affect credit card and savings interest rates, which affect how people buy, save, and spend money. Mortgage rates are more closely tied to treasury bonds' interest rates.

Bond prices have been disappointing over the past week, and the effect is that home loan rates have increased - about .125% higher across the board.

As a REALTOR(R), I focus on providing the utmost service to my buyers to find the right home with the least amount of their effort and to my sellers to sell their home at the best price and at the shortest time possible. I rely on my support circle of lenders to provide the day-to-day analysis of mortgage rates and assist my buyers with the best mortgage programs available.

You can check out http://www.bankrate.com to find the latest mortgage rates nationwide. Of course there are tools available not only there but on my website, http://www.changhomes.net.

Calls are picking up in Santa Clarita

I'm noticing and hearing from other real estate agents that buyer interest in the Santa Clarita Valley is definitely picking up. We are getting many more phone calls from motivated buyers, although we aren't offiically in a "buyer's market." A buyer's market is defined as having a 180-day (6 months) housing inventory, yet the average time on the market in the triangular valley has decreased from about 100 days to about 90.

If you are interested in selling your home, please call me at 661/312-1232. I pledge to all my sellers unsurpassed service and dedicated marketing plans.


In Other News:
Home Sales to Rise Gradually into 2008
A steady improvement in existing-home sales will support price appreciation moving forward, says National Association of Realtors Chief Economist David Lereah.

Buying, Managing Small Properties Can Pay Off
Even in today's uncertain climate, a hands-on real estate investor can make money with smaller properties.

Empty Houses Lead to Lower Prices
Owners of unrented, unsold homes must pay for insurance, lawn service, taxes and the mortgage. Those costs convince them to lower the price.

30-Year Mortgage Rates Climb to 6.21%
This week's increase in 30-year mortgage rates marked their highest point since November. Interest rates on 15-year fixed loans and ARMs also moved higher.

Mortgage Applications Climb Sharply
Requests for purchase loans were up 16.2 percent and refinancing applications rose 17.3 percent, according to Mortgage Bankers Association data.

New Year, new blog

Happy New Year! Just a short introductory note, with the new year and all. Being full-time in real estate is challenging and exciting. One objective I have for the year is to use technology effectively to expand my business: keep in touch with past clients and prospective buyers and sellers.

I have a new website, http://www.changhomes.net/, which will be the main portal for all your real estate needs. I mainly expect the blog to summarize in quick bullets my observations from the real estate front and real estate news from my many sources on a weekly basis.

Join me in my observations, and I look forward to your comments!

Headlines for this first post:

Mortgage Rates Climb for Third Straight Week
Interest rates for 30-year mortgages increased slightly to 6.18 percent, but still fall well-below this year's high of 6.8 percent set in July.

Consumer Confidence Soars in December
The Conference Board reports that consumers' confidence in the economy rose to an eight-month high, which could signal an end to the housing downturn.

A Recession in 2007 Is No Sure Thing
Economists and other financial professionals have differing views on how the housing slump will affect the economy in the coming year.

Housing Market Trapped by Buyer Negativity
Real estate professionals say sellers are clinging to too-high prices and buyers are equally adamant about getting a bargain.