Rates
Well just when you think Putin doesn’t matter, he does.
Rates all week improved, all the way back to where we started on the 17th, and all because no one wants to play nice in Ukraine.
Over the last 5 days the geo-politics have ratchet up, causing money to flee out of Europe and into the US Bond Market.
Also today Standard and Poor’s dropped Russian Bonds to Junk status.
This has all combined to force US bond rates and mortgage rates down, thus making us do the happy dance, for rates are low again….That is until we get another Peace accord, in which rates will jump back up, or Russian invades and rates tank.
But…if we were to look at economic new this week, all were pretty good:
-Leading economic indicators up 0.8% vs est of 0.7%
-Existing home sales 4.59M vs est of 4.55M
-Government sold $32B of debt in on Tuesday, people bought!
-New home sales, weaker 384K vs 450K, I will comment more on this below
-Government sold $35B of debt on Wednesday, people bought!
-Government sold $29B of debt on Thursday, people bought!
-Consumer Sentiment 84.1 vs est of 83, people happy.
So other than new homes sales, week had all really good economic news, which should of pushed rates higher, but Russia is all in play.
I am neutral to locking, you might catch the falling knife every once in a while (i.e. rates) but hard to predict. With that being said, if Russia does invade Ukraine, I would totally hold off locking, rates should decline.
New home sales
Lots of talking heads were concern about the new home sales coming in quite a bit lower than expected. But I am not.
Builders have been riding a huge wave of production because most home sellers were underwater.
So the builders built like there was no tomorrow and raised prices, artificially, almost on a weekly basis.
This caused new homes that sold to prop up the market with higher prices, thus causing more home owners to “Surface” and are able to sell, thus more existing home sales and thus a decline in New home Sales.
And this will continue, I suspect we will see more and more decline in new construction as more existing home come available.
Now the builder that will benefit from this is the “move up” builders. Builders who place themselves for the people who are going to their next home.
But I do foresee home prices stabilizing shortly, because prices have increased to much, there are quite a few people who are being priced out of the market.
CFPB gods
CFPB is now looking at closing and how to make if more efficient and faster, but less confusing.
They are concern on 3 area:
1-Amount of paperwork required at closing
2-Amount of confusion by the buyer on all the disclosures
3-Forcing people to only see the documents they are closing at the closing table.
Their solution they are researching:
1-eClosing so borrowers can eSign docs.
2-More paperwork, giving definitions and terms
3-Requiring 3 days AFTER they sign to review docs.
Well we will see how this goes, but one fact that I don’t find it hard to belive, the average file for a home purchase is about 6,000 pieces of paper, that is 1 case + 2 reams of paper, WOW.
More info here: http://www.consumerfinance.gov/reports/mortgage-closings-today/
Lead generator
Well for today, I would like to discuss pictures, specifically picture on listing.
With more and more listings coming on the market, it is super critical that pictures look good.
And, well, lately I have seen some MLS listing that look like a 2 year old took the pictures with his Tonka Digital Camera.
1st of all, INVEST IN A CAMERA! Although phone cameras have come a long way, they don’t do justice. (hey you need the tax deduction anyway!)
2-Read the instruction manual on how to work the camera.
And from here I found a great article on taking photos and how to avoid mistakes: http://www.photocentric.net/real_estate_interiors.htm
What really got me all fired up, is I saw a MLS listing for a $1.8M home, and the pictures were AWEFUL, to the point of embarrassing. And this was a home of a friend of mine, who has had the home on the market for over 90 days, and has got nothing. Now I did tell them that this type of home doesn’t really sell as fast, but he did need to get with his agent and have them take new pictures.
Remember, getting picture is one of the most important thing you can do for a listing.