Michael DiVita publishes a weekly mortgage report which is updated every Tuesday. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Michael says:

As this year begins, we anticipate a steady, albeit modest, economic recovery including the housing market.

The government is supporting historically low interest making this a “once in a lifetime” opportunity for credit worthy buyers to purchase a home. We think prices have leveled, but even a 5-10% drop would be more than compensated by interest saved compared to average rates of the past 50 years. Call Michael DiVita any time to discuss the specifics of financing or refinancing your home, no obligation, of course.

Call Michael for loan preapproval and a free credit report. That puts you in a buyer’s position if you find a home of interest in the CA real estate market. Ask about 3.5% down FHA and no down VA loans.

Michael G. DiVita
CA Department of Real Estate 01372066
NMLS ID # 241655

Michael DiVita publishes a weekly mortgage report which is updated every Tuesday. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Michael says:

Congress raised FHA loan limits to $729,750, leaving Fannie and Freddie untouched at lower caps. This impacts pricier markets such as California. With down payments as low as 3.5%, the Federal Housing Administration is poised to become a premier lender at least until the end of 2013 when the legislation expires.
This week’s economic news also includes lower unemployment apps and larger than anticipated Black Friday retail sales. It seems the much feared double dip recession is not imminent. And there may never be a better time to buy a home. California real estate discounted 30+% plus historically low interest equal exponential savings over a 15 or 30 year fixed mortgage.

Call Michael for loan preapproval and a free credit report. That puts you in a buyer’s position if you find a home of interest in the CA real estate market. Ask about 3.5% down FHA and no down VA loans.

Michael G. DiVita
CA Department of Real Estate 01372066
NMLS ID # 241655

Michael DiVita publishes a weekly mortgage report which is updated every Tuesday. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Michael says:

This Week; interest rates are opening weaker on Monday with stocks rallying on better than expected Holiday shopping on Black Friday and the rest of the weekend. We continue to believe that US interest rates are about at their lows when the 10 yr moves below 2.00% as it did last week. Europe continues to play a role in the global bond markets however unless there is an actual default in Greece or Italy markets appear to have discounted the problems in the region; until more negative news unfolds the bond market will be focused more on domestic issues.

This week has a number of key data points beside the daily report on retail sales this holiday season. Monday we get new home sales for Oct (expected generally unchanged). Tuesday Nov consumer confidence. Wednesday ADP report on non-farm private jobs, Nov Chicago purchasing mgrs index, Sept pending home sales, and the Fed’s Beige Book. Thursday weekly claims, the ISM manufacturing index for Nov. Friday the Nov employment report (non-farm jobs +118K, non farm private jobs +133K and the unemployment rate at 9.0% unch frm Oct).

As long as there is nothing consequential from Europe this week will be about equity markets and that sector will focus closely on any report on retail sales. Prior to this weekend analysts were generally expecting weaker sales this year than last year. Based on the momentary optimism the current view is that sales may exceed last year’s sales pace. The bellwether 10 yr note will be testing its key moving averages through the week with MBSs moving with it as is the norm.

Call Michael for loan preapproval and a free credit report. That puts you in a buyer’s position if you find a home of interest in the CA real estate market. Ask about 3.5% down FHA and no down VA loans.

Michael G. DiVita
CA Department of Real Estate 01372066
NMLS ID # 241655

Michael DiVita publishes a weekly mortgage report which is updated every Tuesday. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Michael says:

Credit worthy borrowers will pay 3.75% for a 30 year fixed rate mortgage. Compare that to a student loan on average 4.5%; a car loan, 5.3%; and a credit card loan at 13.7% fixed. If you are considering the purchase of a home, the juxtaposition of reduced prices and record low interest create opportunity to make that happen now.

Call Michael for loan preapproval and a free credit report. That puts you in a buyer’s position if you find a home of interest in the CA real estate market. Ask about 3.5% down FHA and no down VA loans.

Michael G. DiVita
CA Department of Real Estate 01372066
NMLS ID # 241655

Michael DiVita publishes a weekly mortgage report which is updated every Tuesday. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Michael says:

WHAT A DIFFERENCE A POINT MAKES

Interest rates are down to 3.75%.  Just five years ago, you would have been lucky to get a 30 year fixed rate mortgage at 5.75%.  Here’s the math.  Each ½ point is 11%, so 2 points equals 44%.  That’s 44% of your total loan or $176,000 savings on a $400,000 loan, for example.  Couple this with the 30+% reduction in San Francisco real estate prices and you have an excellent home buying opportunity.

SFResidence offers you free and unlimited access to the MLS, foreclosures and short sales.  Input desired location, price, number of bedrooms and baths and our software will email daily a list of available properties with your parameters only. 

Call Janis or Thea if you find a home in the San Francisco real estate market you would like to view.  They will gladly provide comps and expertly negotiate offers.  These ladies will escort you through escrow if you decide to purchase.

Call Michael for loan preapproval.  That is an important first step.  Ask for the latest financial data including info re. 3.5% down FHA and no down VA loans. No cost or obligation, of course.

As always we wish you prosperous San Francisco real estate hunting.

Michael G. DiVita
CA Department of Real Estate 01372066
NMLS ID # 241655

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr.Weeks says about last week’s activity:

Trick or treat? Last week, there was big news out of Europe, as an agreement was reached to help keep Greece from going into default. But will this deal mean a frightful time is ahead for Bonds and home loan rates? Read on for more details.

On Thursday, the world was cheering on the news that a deal in Europe was reached, with private banks and other holders of Greek debt accepting a 50% haircut on their principal investment. Once the write down takes place, Banks who are holding Greek debt will have to recapitalize themselves by year-end, and government support will be available to fill voids that private money won’t fill. In addition, the Economic Financial Stability Facility (EFSF) rescue fund, which currently has $443 Billion in holdings, will be expanded and leveraged to $1 Trillion Euros or $1.4 Trillion US Dollars.

So the agreement is together…but like any effective plan, it now has to be put into action. And as this rolls out, the financial markets will be watching every step. When the sentiment is positive, like it was the day the plan was announced, Stock markets could benefit as investors would seek to take advantage of gains.

In fact, the Stock markets are set to have their biggest monthly gains on record as October comes to an end. The closely watched S&P 500 Index is up 13.5% for the largest increase since October of 1974, while the Dow Jones advance of 12% is the biggest gain since January of 1987. Optimism surrounding the European crisis, positive economic data and better than expected earnings reports have fueled the rally.

So what does all of this mean for Bonds and home loan rates? The deal that was reached in Europe is historic, and good news for the world’s economies overall. However, the plan has yet to be put into action-and then it has to work. And if there are hiccups or issues along the way, Bonds and home loan rates could benefit with some renewed safe haven trading. We saw a little of that late last week, when Friday’s less than stellar Italian Bond auction reminded the world that the European debt crisis is not yet entirely resolved.

The most important thing to keep in mind is that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Major economic data is set to impact trading behavior this week…with manufacturing and employment leading the way:

•Manufacturing headlines will be in the spotlight this week with the Chicago PMI on Monday, followed by the ISM Index on Tuesday. Worker Productivity is also set for release on Thursday.
•The ADP Employment Report will be the first of two key releases to gauge the labor markets. Watch for ADP to be released on Wednesday.
•As usual, Weekly Jobless Claims will be delivered on Thursday. Last week’s report showed that people filing for first-time benefits still remain above the 400,000 level.
•Friday’s Jobs Report data will garner the most attention as the Labor Department reveals how many new jobs were created in October. Last month’s gain of 103,000 new workers was positive.
In addition to the reports above, the Fed Meeting begins on Tuesday and ends Wednesday with the Fed’s monetary policy statement. The housing markets will be scrutinizing that statement for any rhetoric that involves possible new purchases of Mortgage Backed Securities to keep home loan rates near record lows. Recently, several Fed members have stated that the Fed needs to support the housing markets and not to see elevated borrowing costs.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Read the entire article and see the graphs here.

- Foster Weeks

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr.Weeks says about last week’s activity:

When the Fed talks, people listen. And last week, the Fed made headlines when Fed Governor Daniel Tarullo called for the Fed to engage in another round of Mortgage Bond purchases…or in other words, another round of Quantitative Easing (QE3). Read on to find out what this could mean for the housing market and home loan rates.

In order to really have an impact on housing, the Fed would have to announce something significant to get people to buy a home. Why? Because even now, with rates at historically low levels and incredible affordability levels, the sales pace in housing is tepid, due to structural problems in the labor market, which the Fed can’t fix.

In fact, there is a lot to consider before the Fed starts expanding their balance sheet, and the biggest concern is rising inflation. Contrary to what the Fed has said about it moderating, year-over-year inflation is on the rise. The headline Producer Price Index (PPI) rose by a whopping 0.8% in the month of September, elevating year-over-year wholesale prices by a hot 6.9%. Meanwhile, the Consumer Price Index (CPI) for September rose by 0.3%, and while this was inline with estimates it pushed the year-over-year number to 3.9%. This is significant because the year-over-year figure was just 1.6% in January.

Remember, inflation is the arch enemy of Bonds and home loan rates. The concept is very simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.

And let’s not forget the ongoing drama out of Europe. French and German leaders will hold two summits in the span of four days to come up with a resolution to the European debt crisis. Whichever way this news goes could have a real effect on the markets, including Bonds and home loan rates.
With all the news to come this week, it’s still important to remember that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Look for some key reports on the housing market, which come after last week’s better-than-expected Housing Starts and the softer numbers from Existing Home Sales.

•New Home Sales are set to be delivered on Wednesday. That number has been hovering near record lows, so the markets will be anxious to see if there’s any indication of an improvement. Also this week, Pending Home Sales will be released Thursday. •Also on Thursday, Initial Jobless Claims will be released as usual. Plus, the first reading on Gross Domestic Product (GDP) for the 3rd quarter will be released. Overall, the estimates don’t appear as if the economy is hitting on all cylinders yet.•The markets will see how the American people are holding up in this economy with Consumer Confidence and Consumer Sentiment on Tuesday and Friday, respectively. •Ending the week, Friday’s Core Personal Consumption Expenditure (PCE), the Fed’s favored inflation measure, is sure to garner some attention.
In addition to those reports, keep an eye on the news. One story that could gain some attention is news that the Federal Housing Finance Agency (FHFA) and the Obama administration will submit proposals to Congress to help the housing market for those homeowners who are underwater.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Read the entire article and see the graphs here.

- Foster Weeks

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr.Weeks says about last week’s activity:

“It’s a small world after all.” And that proved especially true last week, as our markets were impacted by news at home and news from overseas. Here are the highlights.

First, there was some good news on the economic front in the U.S. as Retail Sales for September rose by 1.1%, above the 0.6% expected and the highest increase in seven months. Remember good economic news typically benefits Stocks at the expense of Bonds (including Mortgage Bonds, to which home loan rates are tied), as investors move their money from the safety of Bonds into Stocks to try and take advantage of gains.

And good news here wasn’t the only thing that pressured Bonds and home loan rates last week. The European Central Bank (ECB) said they will announce a plan by early November for addressing the Greek debt crisis and make recapitalizing their banks a priority. As part of this plan, the International Monetary Fund is going to dedicate more resources to help the European debt crisis. A lot of money is needed to make investors feel confident that the debt crisis will be contained, so investors saw this as positive news.

So what does this mean for Bonds and home loan rates? Should the overall present optimistic tone continue, Bonds and home loan rates could face additional pressure. However, if there is pessimistic or uncertain news, investors may return to the safe haven of Bonds, meaning home loan rates could benefit. We did see a little of this trend last week when there was word that China’s exports came in lower than expectations, which brought concern that global growth could continue to slow.

Either way, the volatility is sure to continue so the most important thing to remember is that now is still a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Manufacturing, inflation, and housing reports dominate the news this week:

•The manufacturing sector accounts for one-quarter of the economy, so it’s especially important during the current economic situation. This week, the New York State Empire Manufacturing Index as well as Industrial Production and Capacity Utilization will be released on Monday. Later in the week, the Philadelphia Fed Index will be reported on Thursday.•Inflation news from the Producer Price Index (PPI) and the Consumer Price Index (CPI) will be delivered on Tuesday and Wednesday respectively. The last report on consumer inflation was a bit hotter than expected, so Bond market players will be closely watching those reports. •Housing Starts will be reported on Wednesday and on Thursday Existing Home Sales will be delivered. •The weekly Initial Jobless Claims report will be released on Thursday. As of last week’s report, they continue to remain above the 400,000 level.
Plus, earnings season is in full swing this week. Some big names reporting earnings are Citigroup, Bank of America, Coca-Cola, Apple, and AT&T. If the reports come in better than expected, it could push investing dollars over to the Equity markets.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Read the entire article and see the graphs here.

- Foster Weeks

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr.Weeks says about last week’s activity:

People say that “life is full of surprises.” And indeed, last week’s Jobs Report contained several surprises. Read on to find out if they were good or bad…and what they meant for home loan rates.

Overall, the Jobs Report wasn’t great, but it did surprise by being better than anticipated. One thing that wasn’t a surprise was the unemployment rate which held steady at 9.1%. But the headline number came in at 103,000 jobs created, which was better than expectations of 60,000 and even higher than some of the more frothy expectations. In addition, 137,000 jobs were created in the private sector, which offset more government job losses and which was a lot better than the 83,000 private job gains expected.

Another surprise in the report was the significant upward revisions, which added 99,000 jobs to what was previously reported in prior months, and this added to the positive tone of the report. These upward revisions really change a very pessimistic jobs picture to something a bit more optimistic. For instance, last month the Jobs Report showed zero job creations and now that figure has been revised to show 57,000 jobs created. Once again, these aren’t great numbers—but they are better than bad, and they tell us that the economy is not in a recession…at least for now.

So, what did all of this mean for home loan rates? It’s important to remember that when our economy is struggling, our Bond Market usually benefits as investors seek a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes sense…in times of economic struggle, good home loan rates can help kick start our economy in other areas.

Yet, when good or better than expected economic news hits the wires, like it did with Friday’s Jobs Report, investors often move their money out of Bonds and into Stocks in an attempt to take advantage of these gains. And that’s a big reason why we saw Bonds and home loan rates worsen late last week.

The most important thing to remember is that now is still a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

There aren’t a lot of economic reports in this holiday-shortened week, with the Bond Market closed Monday for Columbus Day (Stocks are open for a regular session). Be sure to look for:

• On Tuesday, the Meeting Minutes from the September Federal Open Market Committee (FOMC) meeting will be released and it could garner some attention. •The usual weekly Initial Jobless Claims report will be released on Thursday. Last week’s initial jobless claims crept back up to just above 400,000 so it will be important to see which way this week’s numbers move.
• Investors will also be focusing in on the Retail Sales report for September, which is due out on Friday. Last Thursday it was reported that September sales for retailers, which is a separate report, were solid—showing a 5.1% year-over-year gain from the 23 largest retailers due to back-to-school sales. •Also on Friday is the Consumer Sentiment Index, so we’ll get an idea about how consumers are feeling about the economy.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Read the entire article and see the graphs here.

- Foster Weeks

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr.Weeks says about last week’s activity:

“Both optimists and pessimist contribute to our society. The optimist invents the airplane, and the pessimist—the parachute.” G.B. Stern. And last week, we saw sentiment on the economy go from pessimistic, to optimistic, and back to pessimistic—all within a week! Here are the highlights of what happened.

On the optimistic side, several economic reports were better than expected. For example, New Home Sales for August were up 6.1% from a year earlier and the Case-Shiller Home Price Index rose in July from June in the 10 and 20 city survey, and was the fourth monthly gain in a row.

What’s more, there was some positive news from overseas. European leaders are designing a Special Purpose Vehicle (SPV) that would issue Bonds and purchase European debt to try to contain the malaise in that region. Plus, Germany voted in support for the expansion of the European Financial Stability Facility (EFSF), which will be used to help Euro member countries access capital. This is optimistic news, as it shows Germany is doing whatever it can to help debt laden countries avoid default and potentially threaten the Euro union.

While this mix of news was great for our economy and the global economy, the result was a “risk on trade” where investors fled the safe haven trade of Bonds and moved into Stocks to try and take advantage of gains. And since home loan rates are tied to Mortgage Bonds, when Bonds worsen home loan rates worsen as well. That’s what we saw happen in the early and middle part of last week.

But some pessimism crept back into the markets late last week as China’s Manufacturing PMI contracted for a third consecutive month. There is growing fear that a slowdown in China could affect the already fragile global economy. This is a developing story and one I will be watching closely because if China’s economy does meaningfully slow, it will likely take Stocks down another level and help Bonds and home loan rates. Also creating some pessimism late in the week: Personal Income was lower than expected, and seeing earnings contract is not a good sign for the economy.

The bottom line is that now is a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Can the U.S. job market get back on its feet? We’ll find out this week, along with more manufacturing news:

• On Monday, the ISM Index will be delivered, and it’s probably the most closely watched manufacturing report out there.
• Jump ahead to Wednesday to see the first labor market reading of the week with the release of the ADP Employment Report.
• Weekly Jobless Claims will be released as usual on Thursday. Last week’s drop below 400,000 was welcomed by investors, but the Labor Department said the numbers were somewhat impacted by seasonal adjustment factors.
• Last but not least is Friday’s Jobs Report, which includes Hourly Earnings, Average Workweek, Unemployment Rate and the closely watched Non-farm Payrolls Report. In August, there were zero jobs created, which was a major blow to the psyche of the investment world. So the markets will be watching this report closely.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Read the entire article and see the graphs here.

- Foster Weeks