Improvements in Housing Data

CoreLogic reported that the number of American homes that are “underwater” fell last quarter. A home is considered “underwater” when the owner owes more on their mortgage(s) than the home’s present value. The data fell from 24% in the first quarter to 23% in the second quarter. While this is not a huge decrease – given the high unemployment levels, any improvement is welcomed. How does our state stack up? Check out the chart below to see:

Improvements in Housing Data

What Happened to Rates Last Week

What Happened to Rates Last Week

Mortgage backed securities (MBS) gained +22 basis points last week causing 30 year fixed rates to decrease. MBS reached a new all-time best pricing level on Thursday. After we reached those great levels, we pulled back -53 basis points by Friday. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were primarily the result of continued concerns about a very fragile economy and the perception of an increased probability of a “double-dip” recession. Our huge pull back on Friday (which caused mortgage rates to increase) was due to the release of the revised 2nd QTR GDP numbers. It was revised from 2.4% growth down to only 1.6% growth but the markets expected an even bigger downward correction. Since the data was better than market expectations, MBS sold off causing us to lose the lowest rates we have ever seen.

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:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the Kentucky mortgage and housing markets. Just leave it to us, we monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

Mike Dunn, Holleigh Sharp & Jeff Sharp

Pending Home Sales Rise 21.1%:
Pending sales of previously owned homes from March of 2009 to March of 2010 rose 21.1%, showing continued strength in the housing market.

Market Statistics

The National Association of Realtors said its Pending Home Sales Index, which is based upon contracts signed in March, increased 5.3% on a monthly basis – building on the prior month’s revised rise of 8.3%.

It is clear that we have seen a steady increase in housing demand with Kentucky houses‘ Pending Sales Up 34%.  Now is the time to start to seriously consider buying now before prices start to accelerate.

Payrolls Increase Again:
The Labor Department reported that Non-Farm Payrolls increased by 290,000.  This is the second consecutive week where our economy has added jobs.  Plus, they revised March’s numbers from 162,000 all the way up to 230,000.

Hiring for the census accounted for 66,000 of the new jobs.  If you subtract the jobs added by the federal government, we can see that the private sector accounted for 224,000 new jobs.  This shows that our economy is adding jobs.  This is the largest increase since March of 2006.  This is very important because housing is not about location, location, location.  It is about jobs, jobs, and jobs!

What Happened to Rates Last Week:

What Happened to Rates Last Week

Mortgage backed securities (MBS) gained +81 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans to their best levels since March.  MBS pricing increased (which causes mortgage rates to go down) due primarily to Greece.  Yes, Greece.  With concern about their looming default on their sovereign debt and the subsequent “domino affect” all across Europe, money flew into U.S. treasuries and MBS.  This artificial (and temporary) demand helped to push mortgage rates down.

What To Watch Out For

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:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to us, we monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

Mike Dunn, Holleigh Sharp & Jeff Sharp

Kentucky Derby 2010

The first Saturday in May is considered a national holiday to most Kentuckians! It is when the Kentucky Derby is run every year.  It started with “two minutes” and became two weeks of celebration! In fact, now it is called the “Kentucky Derby Festival” !

The Festival is one of the premier events of its kind in the world.  It brings fun, excitement, international recognition and a spirit that is unmatched anywhere.  The Festival blasted off this past Saturday, April 17th with “Thunder Over Louisville”. “Thunder “ (as it is called for short) is one of the nation’s largest annual fireworks shows which follows a day of watching a spectacular air show! 

This year is the 136th Kentucky Derby. The Kentucky Derby is the finale of the two week celebration and is held at famous Churchill Downs in Louisville, Kentucky. Also known as, “Run for the Roses”, the winning horse is draped in a garland of 554 red roses that are sewn into a green satin backing with the seal of the Commonwealth on one end and the twin spires of Churchill Downs and the number of the running at the other end. Each garland is also adorned with a ‘Crown” of roses, green fern and ribbon. The “Crown”, a single rose pointing upward in the center of the garland, symbolizes the struggle and heart necessary to reach the winners’ circle.

There are several ways to attend the Kentucky Derby! If you are fortunate enough, you can mix with many of the rich and famous, including a stream of celebrities on “ Millionaire’s Row”.  Or……..there is always the infamous “Infield” where you are likely to see anything BUT  a horse race! 

The Kentucky Derby is noted for it’s legendary drink, the  “Mint Julep”.  The Mint Julep is a tradition as old as the Kentucky Derby itself. Rarely seen the rest of the year, even inside local Louisville houses, this potent concoction is the national drink for a few hours every first weekend in May.

But the Derby is not all about horse racing and drinking Mint Juleps…… there is of course, the Derby Hat!  Men and women alike are donned in a variety of hat styles for the Derby.  You will see some of the most beautiful and expensive hats in the world that day!  You will also see some of the “tackiest” hats in the world that day!

As Kentuckians, we wait for it all year and it promises to be one of the greatest celebrations in horse racing.  If you can’t be here, be sure to celebrate wherever you are!

National Open House Weekend this Saturday and Sunday!

National Open House Weekend is this Saturday and Sunday, April 10th and 11th.  Kentucky Association of Realtors has teamed up with associations across the country for one weekend of Nationwide Open Houses.  The purpose is to encourage those who are thinking of buying a home to take advantage of unique home market factors and the federal home buyer tax credit that expires on April 30th.  That is the deadline to write a contract in order to be eligible for the tax credit.

Milestone Realty Consultants is participating in this first event of its kind in a BIG way.  Our agents will be showcasing lots of Kentucky houses in eight or more counties across the state. Many Lexington homes will be open both Saturday and Sunday. Twelve Louisville houses will be participating in the weekend event.

KAR is providing free balloons to the local associations for the agents to tie to their open house signs as well as flyers and advertising.  The National Association of Realtors is providing national media coverage to look for the “blue” balloons! 

The weather here in Kentucky is supposed to be beautiful this weekend, so have fun and enjoy this national event!

Springtime in Lexington

Well Spring is trying to get here…we have had a taste of warmer weather with a mix of some cooler weather  and promises by the weather persons of  some even  nicer weather to come so perhaps even though March came in like a lion  it truly will go out like a lamb.  March Madness is in full bloom with everyone hoping that the UK Cat’s will do well.  It has been a while since I have seen this much excitement  surrounding the NCAA and I myself welcome it’s return.  I think it is a part of the rites of Spring here in KY and has been missing in the recent past several years.

One other rite of spring that I have noticed returning is the real estate market.  It seems to recently have become quite active  as buyers and sellers both try to take advantage of the spring market which is being aided by the Federal and State Tax Credits that are available.  We have gone past the deadline for those who wish to use them and do a “build to suit from scratch” as builders need time to build and complete the Lexington homes, but there are what are called “spec homes” or “field models” that some builders such as Ball Homes have in inventory in various stages. Depending on what stage of construction  it is, and if one does not delay, you could still get a new home completed before that June 30^th deadline to close  as long as they are go to  contract before the April 30^th deadline.  Bottom line if one is interested in a brand new home it is still possible but their options are becoming more limited as the April 30^th deadline approaches. 

Keep in mind that this April 30^th contract deadline also is in effect for the re-sale market of existing or completed homes as well and after the April 30^th date that one can no longer take advantage of the Tax Credits  unless they are extended and it does not sound like that will happen.  Bottom line… If one is thinking of making a move there is nothing like now.  

 Hmmm… you say not quite ready or not thinking of moving? Well, one can still have an opportunity to take advantage of springtime in Ky  as it truly is a magnificent time of the year here with new sprouts and  emerging  growth appearing and wildflower and other  blossoms being found abundantly all about  in all their glory and the spring racing at Keeneland is not too far off either which is another rite of springtime here so get out and take advantage of what you can and just enjoy the Spring for what it is.  Ending with the hope that the economy will continue to become active and blossom as well