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Mortgage Rates Dropping After Release Of Fed Minutes

August 24, 2012 by Jeff Cost

Fed minutes August 2012 Eariler this week, the Federal Reserve released the minutes from its 2-day meeting which ended August 1, 2012. Since the release, mortgage rates have dropped.

The Fed Minutes are released on a schedule, three weeks after the FOMC adjourns from one of its 8 scheduled meetings of the year.

The Fed Minutes are meeting minutes; like you’d see after a corporation shareholder meeting, or after a condo board meeting. Specifically, the Fed Minutes details the conversations among Federal Reserve members which shape our nation’s economic policy.

The most recent Fed Minutes show a central bank closer to adding new market stimulus that previously believed.

At its last meeting, the Federal Reserve’s debate focused on the rate of economic growth and whether it was occurring too slowly to be long-lasting. The Fed appears to think so. Without a “substantial and sustainable strengthening” in the pace of economic expansion, it said, additional monetary stimulus would be “warranted fairly soon”.

Other notes from within the Fed Minutes included :

On employment : Unemployment rates will “decline only slowly”
On housing : The market appears “to have improved, somewhat”
On inflation : Retail energy costs are keeping consumer prices low

However, the Fed expressed an “unusually high level of uncertainty” about its assessments owing to the ongoing European sovereign debt problems. “Spillovers” remain possible and default threats continue to weigh on markets.

The Federal Reserve’s next scheduled meeting is September 12-13, 2012.

Since the minutes were released — and for the first time this month — mortgage rates in Kentucky made a big move lower. This is in contrast to the rest of August through which mortgage rates have climbed steadily.

According to Freddie Mac, on August 1, the average 30-year fixed rate mortgage rate was 3.49% nationwide. Today, the rate is 3.66%. Between now and the Fed’s next policy-making meeting September 13, though, mortgage rates are subject to change. If today’s mortgage rates fit your budget, consider locking in.

Existing Home Sales Rise To 4.47 Million

August 23, 2012 by Jeff Cost

Existing Home Sales Home resales climbed 2% last month as the housing market continues its measured, steady recovery.

According to the National Association of REALTORS®, Existing Home Sales rose to 4.47 million units in July on a seasonally-adjusted, annualized basis.

An “existing home” is a home that cannot be classified as new construction and, despite a reduction in the national homes inventory, the number of previously-occupied homes sold in July was higher by 10% as compared to one year ago.

The Existing Home Sales also reported the folliowing :

First-time buyers accounted for 34% of all purchasers, down from 34% in June
Real estate investors accounted for 16% of all purchasers, down from 19% in June
Cash buyers accounted for 27% of all purchasers, down from 29% in June

In addition, the real estate trafde group reports that distressed sales accounted for a smaller percentage of the overall home resale market in July. Just 24% of home resales were for homes in various forms of foreclosure or short sale.

This is down one percent from June, and five percent from July 2011.

It also marks the smallest percentage of homes sold in “distressed” status since the trade group began to track such data 4 years ago.

Lastly, nationwide, the supply of homes for sale dropped to 6.5 months. At the current pace of sales, therefore, the complete U.S. home resale inventory would be sold by the end of Q1 2013.

There are now 2.40 million homes for sale — a 24% reduction from July 2011.

For today’s Columbus home buyers, the July Existing Home Sales report reinforces the notion that housing is in recovery and what the nation’s home builders have been saying since late-2011 — the next six months for housing will likely be strong. Growth may not be linear, but it figures to be consistent.

With home inventory low and mortgage rates the same, the home resale market looks ripe for good deals.

States With The Highest And Lowest Closing Costs, 2012

August 22, 2012 by Jeff Cost

Closing costs by state, 2012

Mortgage rates have been on steady decline in Ohio since the start of 2012 as uncertainty for the future of the Eurozone and questions about the soundness of the U.S. economy have led investors into mortgage bonds in droves, lowering the 30-year fixed rate mortgage to its lowest point in history.

But it’s not just mortgage rates that are down. Closing costs are, too.

According to Bankrate.com’s annual Mortgage Closing Cost Survey, the average mortgage applicant paid seven percent fewer closing costs in 2012 as compared to 2011, on average. The year prior, costs had increased thirty-seven percent, on average.

A “closing cost” is any fee paid in conjunction with a mortgage settlement that would not be payable if the home was financed with cash. Closing costs for purposes of the Bankrate.com survey include such items as underwriting fees and appraisal costs. County transfer stamps, where required, however, were not included.

Like everything in real estate, closing costs vary by locale. There are some states in which closing costs tend to be high, and other states in which closing costs tend to be low.

The five states with the lowest closing costs for 2012, on average, are :

Missouri : $3,006
Kansas : $3,193
Colorado : $3,199
Iowa : $3,257
Arkansas : $3,325

By contrast, the two most expensive states in which to close a mortgage this year are New York ($5,435) and Texas ($4,619). All figures assume a $200,000 loan size with 20 percent equity and excellent credit.

The good news is that, as a home buyer or refinancing household, you’re often not required to pay the closing costs which are itemized by your bank. When asked, many lenders will offer a low-closing cost or zero-closing cost option.

With low- and zero-closing cost programs, qualifying mortgage rates are raised by a small amount, which increases your monthly mortgage payment. Up-front settlement costs, however, are reduced or eliminated.

Opting for a low- or zero-closing cost mortgage is a trade-off between upfront costs and ongoing costs. Talk to your loan officer about your options to see which path is best for you.

View average closing costs for all 50 states at Bankrate.com.

Mortgage Rates Dropping After Release Of Fed Minutes

Existing Home Sales Rise To 4.47 Million

States With The Highest And Lowest Closing Costs, 2012

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