Vast Majority of Americans Favor Home Ownership

Despite a historic real-estate market upheaval that sent foreclosure rates skyrocketing and home values plummeting, Americans still have a deep attachment to homeownership. Furthermore, they consider homeownership an integral part of an American Dream in which they still believe, according to poll results announced today by The Allstate Corporation (NYSE: ALL) and National Journal.

The eighth quarterly Allstate-National Journal Heartland Monitor Poll revealed that nearly nine out of 10 homeowners say they would buy their homes again. That percentage held true even among homeowners who said their home values had declined. Seven of 10 Americans say they would advise a friend or family member to find a home as a long-term asset. However, while homeownership is perceived as a good personal decision, there is much greater uncertainty about whether expanding homeownership should be a government priority.

Although only 35% of respondents expect their personal financial situations to improve over the next year, three-fourths of those surveyed said it is still possible for people like them to achieve the American Dream, which the poll defined as the ability to advance as far as their talents will take them and live better than their parents did. A total of 59% said they currently are living the American Dream. Respondents identified owning your own home as one of the most critical parts of the American Dream, second only to raising a family.

What Happened to Rates Last Week

Kentucky Mortgage - What Happened To Rates Last Week

Mortgage backed securities (MBS) gained +53 basis points from Monday’s open to Friday’s close which helped to move mortgage rates down slightly. Mortgage Backed Securities shrugged off numerous economic reports that showed growth in the U.S. (which normally hurts mortgage rates) as international investors poured money in our system due to the continued global concern over the events in Japan.

What to Watch Out For This Week

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:

Mortgage Back Securities are the only thing government and conventional mortgage rates are based upon. We are happy to monitor the live trading of these for you as it’s extremely difficult to keep track of the economy and other factors that impact Kentucky mortgage and housing markets.

Mike Dunn, Holleigh Sharp & Jeff Sharp

Employment Picture Brightens

Demand for housing is fueled by consumer confidence levels. And nothing impacts those levels more than how consumers feel about the job market. We had three major releases last week that gave us a better understanding of the employment picture.

First up were the Challenger Job Cuts report. This measures the number of layoffs announced by corporations. They reported that layoffs decreased by 34% in December. Next up was the ADP Private Payroll report. They measure non-farm and non-government hiring. This report showed a gain of 297,000 jobs in December which was one of the strongest increases on record. Lastly, the Labor Department reported that the national Unemployment Rate declined from 9.8% to 9.4% which is the lowest reading in 1 1/2 years.

While we certainly still have a lot of ground to make up in the job market, the above news is good for housing and certainly mirrors last month’s gains in both Existing Home Sales and Pending Home Sales.

What Happened to Rates Last Week

Kentucky Mortgage - What Happened To Rates Last Week

Mortgage backed securities (MBS) moved sideways last week but we certainly did see some big swings in mortgage rates during the middle of the week. The very strong ADP Private Payroll data pushed mortgage rates upward on Wednesday but rates moved backed down after Friday’s Unemployment report.

What to Watch Out For This Week

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:

Mortgage Back Securities are the only thing government and conventional mortgage rates are based upon. That is why we are happy to monitor the live trading of these for you as it’s extremely difficult to keep track of the economy and other factors that impact Kentucky mortgage and housing markets.

Mike Dunn, Holleigh Sharp & Jeff Sharp

Consumer Sentiment Continues to Rise

Consumer Sentiment plays a very large roll in housing.  Simply put, if consumers feel good about their prospects and the overall economy – they are more likely to purchase a Kentucky home.  So, it is great news that the Reuters/University of Michigan’s Consumer Sentiment Index rose for the third consecutive month.  It came in at a revised reading of 71.6 which far outpaced the market expectations of 69.5.

Also, the national economy grew at a much faster pace than originally thought. The U.S. Gross Domestic Product (GDP) for the third quarter was upwardly revised from 2.0% to 2.5%.  A half point in an economy our size is a very large move upward and marks the best reading in five quarters and the third straight quarterly improvement.  Both of these reports are a big positive for housing demand.

What Happened to Rates Last Week

Kentucky Mortgage - What Happened To Rates Last Week

Mortgage backed securities (MBS) lost -34 basis points last week causing 30 year fixed rates to increase from the previous week.  This marks the third straight week of increasing mortgage rates.  This further proves that you should not listen to news reports about mortgage rates.  The U.S. government cannot and does not control mortgage rates.  These are set by an open market place of willing sellers and purchasers of MBS.  And as our economy continues to rebound, we will continue to see a longer-term trend of higher mortgage rates when compared to our artificially low mortgage rates in October.

What to Watch Out For This Week

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:

We understand that is extremely difficult to keep track of the economy and other factors that impact Kentucky mortgage and housing markets. That’s why we gladly monitor the live trading of Mortgage Backed Securities for you. They are the only thing government and conventional mortgage rates are based upon.

Mike Dunn, Holleigh Sharp & Jeff Sharp