Speculation. That's a scary word. I've been doing a lot of reading today on why rates have gone up the last few days.
Now remember, I usually believe that rates go up and down. You'll rarely see in a day to day chart that rates just go up and up and up, conversely you won't see them go down, down, down. News will be anticipated causing rates to do one thing, reality will set it and then rates will do the opposite and land a little bit more in the direction they're supposed to go into.
Since it doesn't really matter what I think and I'm just as accurate as the "professional" writers of the economy, here's my thoughts on rates. I think they'll stay LOW, that's right, low. Why? Well, we have to look at why people think rates will go up. It's a belief that the government will stop buying MBS (mortgage backed securities) in March / April as currently planned. Also, in the same time is when the temporary credits for home buyers will end as well. But that was all supposed to happen at the end of this year. The economy looked so bad that the government said, we have to extend these programs so to stimulate the housing market.
My question is, has anything changed? Look in your pocket, has them money grown? Let's see the sales data from the holiday season. I think we'll see a weak economy. This will lead to the extension of MBS buying by the Fed. The market is reactionary. That's why rates are rising months before the Fed actually stops buying these securities. What happens if all of the sudden the Fed comes out in January and says, we're going to extend these purchases and incentives that seem to be the only real stimulus that is working for the average worker further into next year if not the end of the 2010? You'll see rates drop back down and people to continue buying houses. I don't think it seems so far fetched that these programs could continue if the Fed shows / sees that this is what is stimulating the economy and if it where to stop things would only get worse.
I find it funny how people look at dates and schedules that have changed a million times before but this is the final time, "this is the time where the Fed will stop." (paraphrasing) "Rates hit a all time low and there is now where to go but up" - recent CNBC article. I've heard the same thing about rates for the past 6 or 7 years. Every time rates get low, someone will come out and say "That's it, rate have now where to go but up and here's the reason..."
How about this one? Rates go up and down. Yes we've recently hit a little low, and have now bounced back up but they can just as easily go right back down and possibly drop even the slightest bit further down. The people that say the rates are off from their historical trends of following the yields of the treasuries and we should have higher rate are telling the truth; but my issue is that right now we're experiencing very odd times. you can't judge what's going to happen. the yield was higher in the beginning of December was higher than it was in the summer but the rates in early December where lower than at any time during the past 3 - 4 months. Explain that. It doesn't follow conventional logic. You can't expect one part of this economy to be certain and stick to past rules while other parts are doing things you've never seen or expected.
I think everything right now needs to be less reactionary to what is supposed to happen in 3 - 6 months and more to what's going on now. If that means rates go up today, fine then the Fed will have to extend their buying policies and THEN the rates will come right back down. It's still reaction but it's current and actual reactions to what's happening. With so much in limbo how can people speculate on what's going to happen in the future? I remember at the end of 2008 we where supposed to be done with the depression and back to normal at the beginning of 2010. We might not technically be in a recession but it sure feels like we are and I don't see anything that says in six months we'll be anywhere different.
Only time will tell. Let's visit this in six months and see if everything that was "planned" actually happened.
Tuesday, December 22, 2009
Tuesday, December 15, 2009
News and expectations
Today's been an odd day for news. So odd that something is not feeling right and I hope it's not true. I'm seeing articles saying that we're slowly but surely coming out of the recession that we're in. Of course that's easy to say when you fall flat on your face, of course things will get better eventually. Slowly, I too agree with. But that's the kind of article that makes you think "things" are going to be ok sometime soon.
Then I read the dollar is inching up. Then I read home manufacturing is down. And in my gut and from what I saw from the results of Black Friday, we're not going to have great / good numbers from December, which is what will make or break many business's year.
The odd feeling that I'm getting is stagnation. Which is not good for anyone. I know it's hard to hear and unfair to say but if the housing market is going up or down, with low rates like they are, we can do something with it. But if you have everyone just holding and saving their money we're going to go into stagnation which is the worst thing that could happen on an unstable economy.
Rates are low and you're still seeing people buying and selling (be it short sale or foreclosure too) we've got a punchers chance to take on 2010. But if my gut is wrong, and I hope it is, let's hope stagnation of this economy doesn't set in. Only time will tell. Let's see what the rest of this week says because once we get into the second half of December, you're not going to be able to do much... except await the next Bear installment :)
Then I read the dollar is inching up. Then I read home manufacturing is down. And in my gut and from what I saw from the results of Black Friday, we're not going to have great / good numbers from December, which is what will make or break many business's year.
The odd feeling that I'm getting is stagnation. Which is not good for anyone. I know it's hard to hear and unfair to say but if the housing market is going up or down, with low rates like they are, we can do something with it. But if you have everyone just holding and saving their money we're going to go into stagnation which is the worst thing that could happen on an unstable economy.
Rates are low and you're still seeing people buying and selling (be it short sale or foreclosure too) we've got a punchers chance to take on 2010. But if my gut is wrong, and I hope it is, let's hope stagnation of this economy doesn't set in. Only time will tell. Let's see what the rest of this week says because once we get into the second half of December, you're not going to be able to do much... except await the next Bear installment :)
Monday, November 23, 2009
Thanksgiving showdown
Well, this is it boys and girls. This is the start of the of holiday buying time. This is where companies can make or break their year. Some have high hopes that this will be an lean year at best. But as you probably could guess, I'm thinking that this holiday season is going to be bad.
Sure you might see great sales but that leads to the question, who's going to buy these items. If you're broke, who cares if a TV is 1500, down from 3000? I've had my eye on a new TV and I've watched the price come down and down. If it wasn't for the fact I've got bills to pay I would buy it. I'm thinking that I'm in the same boat as a lot of other Americans this year. Even the family has said there will be no gifts, just a few for our family get together but no "big" holiday spending. I think that's what kitchen table talk is.
You're starting to see the numbers to support this. Even with everyone thinking that the government will extend their housing programs into next year, nothing official has come out which causes great anxiety. I can almost guarantee that these programs will extend but who am I, just some Broker (the best) but not the one who makes the rules.
I love Thanksgiving. It's my favorite holiday. I'm not one that goes out on Black Friday because I'm usually in a food coma for at least a day or two, but I'm going to be interested in what the stores do look like and the reports of how those store's earnings are doing in this most important of times. If stores don't do well, forget about seasonal hiring; how bad would it be for people to continue to loose their jobs at this time of year. That too will be a telling statistic of where the economy is at and where it's going.
I'm sure we'll talk again this week since I'll have time to pontificate, but if I don't, BEAR wishes one and all a happy Thanksgiving.
Sure you might see great sales but that leads to the question, who's going to buy these items. If you're broke, who cares if a TV is 1500, down from 3000? I've had my eye on a new TV and I've watched the price come down and down. If it wasn't for the fact I've got bills to pay I would buy it. I'm thinking that I'm in the same boat as a lot of other Americans this year. Even the family has said there will be no gifts, just a few for our family get together but no "big" holiday spending. I think that's what kitchen table talk is.
You're starting to see the numbers to support this. Even with everyone thinking that the government will extend their housing programs into next year, nothing official has come out which causes great anxiety. I can almost guarantee that these programs will extend but who am I, just some Broker (the best) but not the one who makes the rules.
I love Thanksgiving. It's my favorite holiday. I'm not one that goes out on Black Friday because I'm usually in a food coma for at least a day or two, but I'm going to be interested in what the stores do look like and the reports of how those store's earnings are doing in this most important of times. If stores don't do well, forget about seasonal hiring; how bad would it be for people to continue to loose their jobs at this time of year. That too will be a telling statistic of where the economy is at and where it's going.
I'm sure we'll talk again this week since I'll have time to pontificate, but if I don't, BEAR wishes one and all a happy Thanksgiving.
Friday, October 2, 2009
Keep 'um coming!!!
As I've predicted rates have stayed low, if not gotten lower. If you own a home and aren't thinking about refinancing then you're not doing the correct thing. At least check in and see what's possible.
I certainly can't guarantee that everyone will qualify. And with these new HVCC rules, who knows what value you are going to get? But if we don't explore the options, like run the credit and possible pay for an appraisal, then you'll never know.
If we think that there is a possibility to refi, I'm looking at rates in the 4's for a 30 year fix and have even seen some rates in the 3's, YES 3's on a 5/1 ARM even interest only!!!
Let me try to help you. I usually don't do adds here but when I'm seeing the trends like I have in the past, I don't want people to miss the boat because this truly could be the last chance. As always we can be reached at 818 264-0999.
Please be patient as well. Now the lenders are starting to get backed up again and so is everyone else. From appraisers to title and escrow and even us brokers. Each deal is now twice as hard and there is a lot of up front work that needs to be done so we know that we can get each loan done. The good part is eventually the loans are funding. It might take longer that the good old days but the loans are still funding. So call now and see what can be done.
I certainly can't guarantee that everyone will qualify. And with these new HVCC rules, who knows what value you are going to get? But if we don't explore the options, like run the credit and possible pay for an appraisal, then you'll never know.
If we think that there is a possibility to refi, I'm looking at rates in the 4's for a 30 year fix and have even seen some rates in the 3's, YES 3's on a 5/1 ARM even interest only!!!
Let me try to help you. I usually don't do adds here but when I'm seeing the trends like I have in the past, I don't want people to miss the boat because this truly could be the last chance. As always we can be reached at 818 264-0999.
Please be patient as well. Now the lenders are starting to get backed up again and so is everyone else. From appraisers to title and escrow and even us brokers. Each deal is now twice as hard and there is a lot of up front work that needs to be done so we know that we can get each loan done. The good part is eventually the loans are funding. It might take longer that the good old days but the loans are still funding. So call now and see what can be done.
Housing thoughts
Sorry I've been lazy with the blog.
I think we're getting closer to the bottom of the market. There may still be another 10% to drop in the average area. I feel that in the higher end homes you'll start to see a much larger drop. The financial crisis we're all experiencing is starting to hit the homes that are 900k and above. The homes that I think that will be hit the hardest are the ones that are 900k - 2 million. The reason being that the buyers of those homes that have a standard of 20 - 25% are still going to have trouble finding financing. Also, those seem to be the homes that the bank was less willing to foreclose on because, let's face it, there are not a lot of people that have 180 - 400k to put down on a house. I could go on, but I don't want to bore you with facts and numbers.
The people with homes in the 4 million and over, they're always going to be and have been a different breed. Unless they are hit with job losses, those homes won't need to sell and you'll see people sitting on those. But if you an average home buyer, now is a great time to be looking.
I know that the banks are sitting on a ton of inventory. Adding to that 60% of people who manage to get a rate mod are still going into foreclosure, so you've got that group that will start hitting soon. I'm seeing places that where going for 600k, going down as low at 350 - 400. Sure they where way over inflated but you can get good deals. And with rates this low it makes a lot of sense. Just be patient. At this very moment the inventory of houses is not very good. Anything that is worth looking at probably already has multiple offers on it. The key is to have the financing ready and save as much for a down payment as possible. If you're going against multiple offers and you can put a good down payment together, if it's a short sale or foreclosure where the banks are making the decisions, they want to go with the quickest and least hassle buyers.
As always, if you have any questions, give us a call. I'm happy to discuss all options with you.
818 264-0999
I think we're getting closer to the bottom of the market. There may still be another 10% to drop in the average area. I feel that in the higher end homes you'll start to see a much larger drop. The financial crisis we're all experiencing is starting to hit the homes that are 900k and above. The homes that I think that will be hit the hardest are the ones that are 900k - 2 million. The reason being that the buyers of those homes that have a standard of 20 - 25% are still going to have trouble finding financing. Also, those seem to be the homes that the bank was less willing to foreclose on because, let's face it, there are not a lot of people that have 180 - 400k to put down on a house. I could go on, but I don't want to bore you with facts and numbers.
The people with homes in the 4 million and over, they're always going to be and have been a different breed. Unless they are hit with job losses, those homes won't need to sell and you'll see people sitting on those. But if you an average home buyer, now is a great time to be looking.
I know that the banks are sitting on a ton of inventory. Adding to that 60% of people who manage to get a rate mod are still going into foreclosure, so you've got that group that will start hitting soon. I'm seeing places that where going for 600k, going down as low at 350 - 400. Sure they where way over inflated but you can get good deals. And with rates this low it makes a lot of sense. Just be patient. At this very moment the inventory of houses is not very good. Anything that is worth looking at probably already has multiple offers on it. The key is to have the financing ready and save as much for a down payment as possible. If you're going against multiple offers and you can put a good down payment together, if it's a short sale or foreclosure where the banks are making the decisions, they want to go with the quickest and least hassle buyers.
As always, if you have any questions, give us a call. I'm happy to discuss all options with you.
818 264-0999
Tuesday, September 15, 2009
Politics and Ecomonics
Watching Countdown tonight and one of the Margaret Carlson touched on something I feel is so big on how we come out of our economic problems.
We've got politicians trying to make laws and understand financial systems that they've never been apart of. The HVCC appraisal nightmare is a perfect example. Politicians like Andrew Cuomo of New York, could have the best intentions possible. But without intimate knowledge of how the industry works, you get a set of laws like the HVCC.
On another post I'll explain all that's wrong with these laws but just know that it is affecting current, new and future homeowners. Making it harder to get loans and driving values down isn't what will save the financial world. I try to step back and see all these things from an outside perspective so I'm not jaded by being in the trenches, but even then I can see that good mortgage brokers, bankers, loan officers and realtors should all be at the table helping to craft these tougher laws.
Politicians are politicians. Very few understand the complex world of lending, let alone how to regulate it. Something I learned that has been very helpful to me is, stick to what you know. There should be a panel put together just like when they want to find out other things. There can be a report that maybe, just maybe, will produce rules that help protect the public without hurting them as well. I don't come to your job and tell you how to do it and I certainly don't try to regulate it without knowledge of the job.
We've got politicians trying to make laws and understand financial systems that they've never been apart of. The HVCC appraisal nightmare is a perfect example. Politicians like Andrew Cuomo of New York, could have the best intentions possible. But without intimate knowledge of how the industry works, you get a set of laws like the HVCC.
On another post I'll explain all that's wrong with these laws but just know that it is affecting current, new and future homeowners. Making it harder to get loans and driving values down isn't what will save the financial world. I try to step back and see all these things from an outside perspective so I'm not jaded by being in the trenches, but even then I can see that good mortgage brokers, bankers, loan officers and realtors should all be at the table helping to craft these tougher laws.
Politicians are politicians. Very few understand the complex world of lending, let alone how to regulate it. Something I learned that has been very helpful to me is, stick to what you know. There should be a panel put together just like when they want to find out other things. There can be a report that maybe, just maybe, will produce rules that help protect the public without hurting them as well. I don't come to your job and tell you how to do it and I certainly don't try to regulate it without knowledge of the job.
Wednesday, September 2, 2009
FOMC geniuses
I sorry, but to read a headline like "Consumer spending softer than expected" just makes me laugh.
I literally don't know anyone who's doing "well". I know a lot of people and I've seen a lot of people's finances. I can tell you that no one is doing well. Maybe I'm reading into just a headline too much but I think it's so... almost insulting, either to us as people or to them as financial soothsayers.
1) What gave them the impression that we where doing well. More than that I wonder what level did they think we were going to come in at, as far as spending?
2) Or are we so broke that no matter what guess they could have had, we where lower?
I was having a discussion with a long time friend and client. He put it perfectly. All the people on the news or business channels or papers can only explain what happened. If the market goes up or down, they come in at night and say "Well it was because of this or that". None of them really know anything of use, like what will happen. Or at least they won't stick their neck out and give an educated guess.
It got me thinking. I'm no brilliant person but at least I read the FACTS and talk to the average person and can sit back and take an educated guess on what will happen. No one kills me if I'm wrong or throws me a party if I'm right. It's because if I told you rates where going to go up tomorrow, I'd back that up with what I believe are facts or guides. If I was right or wrong, I tried my best. It seems so many people base trillions of dollars and transactions on what the fed says or thinks. So you've got people reacting to other people's guesses (who never leave their desks or are surrounded by other rich people).
The market tanked today because the FOMC said consumer spending wasn't what they thought it would be. I could have told you that and have been for months. Why, today, would that seem to make the market drop. We all know that we're in hard times so this should have been a gradual decline, not just a one day selloff. But I guess if they new what was going to happen tomorrow, they wouldn't tell us anyway and they'd be rich.
I literally don't know anyone who's doing "well". I know a lot of people and I've seen a lot of people's finances. I can tell you that no one is doing well. Maybe I'm reading into just a headline too much but I think it's so... almost insulting, either to us as people or to them as financial soothsayers.
1) What gave them the impression that we where doing well. More than that I wonder what level did they think we were going to come in at, as far as spending?
2) Or are we so broke that no matter what guess they could have had, we where lower?
I was having a discussion with a long time friend and client. He put it perfectly. All the people on the news or business channels or papers can only explain what happened. If the market goes up or down, they come in at night and say "Well it was because of this or that". None of them really know anything of use, like what will happen. Or at least they won't stick their neck out and give an educated guess.
It got me thinking. I'm no brilliant person but at least I read the FACTS and talk to the average person and can sit back and take an educated guess on what will happen. No one kills me if I'm wrong or throws me a party if I'm right. It's because if I told you rates where going to go up tomorrow, I'd back that up with what I believe are facts or guides. If I was right or wrong, I tried my best. It seems so many people base trillions of dollars and transactions on what the fed says or thinks. So you've got people reacting to other people's guesses (who never leave their desks or are surrounded by other rich people).
The market tanked today because the FOMC said consumer spending wasn't what they thought it would be. I could have told you that and have been for months. Why, today, would that seem to make the market drop. We all know that we're in hard times so this should have been a gradual decline, not just a one day selloff. But I guess if they new what was going to happen tomorrow, they wouldn't tell us anyway and they'd be rich.
Subscribe to:
Posts (Atom)
Posts
