| 01.03.09|
Weekly Housing Market Update
Question of the week: What are some financial matters I should check annually?
Answer: This question was asked at a holiday party and it is a good one we should all ask and answer. For Long Beach homeowners, my annual checklist is pretty short. First, make sure your Family Trust and Estate Plan are in order and have a review scheduled. If you own property and do not have a Family Trust and Estate Plan then number one on your list should be to get one (contact me if you need help). Second, review your homeowners' insurance policy to make sure it is up to date, and accurately reflects the insurance you need (remember for most people you only want to insure replacement cost, not value or mortgage balance). If you feel your mortgage needs a check up, give me a call and we can run through your information and see if you will benefit from restructuring your mortgage debt.
If you have a question you would like me to answer, send it to me!
Historically, the last week of the year is pretty crazy, as investors buy or sell in large numbers to either protect gains for their portfolios for the year, or sell to take losses. This week has been no different as the mortgage markets see-sawed every day as investors moved from stocks to bonds and back again all week.
Ending the crazy year of 2008 we saw investors react favorably to Fannie Mae and Freddie Mac mortgages as investments and conforming loans start 2009 0.375% below last January. In the middle of the year, investors lost all confidence in the jumbo mortgages and that market collapsed and is waiting for investors to recognize the benefit of making loans to well qualified homeowners above the conforming limits. As for government mortgages, the new loan limits imposed early in the year by Congress (plus the mortgage insurance built into the mortgages), has resulted in tremendous volume for FHA mortgages in the last quarter of 2008.
Looking forward, we anticipate continued low rates as the government, investors and consumers continue to work through a struggling economy. With continued buying in the first time buyers' markets we will slowly see stability in home prices and any housing market rebounds will be led from the bottom. For anyone considering buying a home in 2009 I would counsel getting your financial information together early in the year and find out where you stand in regards to ability to qualify. Once you have that information work out a plan as to when you want to purchase your new home and what you need to do in order to successful close escrow on your new home.
With all the year-end trading we ended the week flat from the last Friday in 2008. More stable trading should resume on Monday and not to long thereafter we will see if any new trends, or momentum, develops in the mortgage markets as to rates. We skipped off the bottom we have seen in the past fifty or so years in mid-December, will we hit that again? The markets will let us know in early January.
NOTE PRICING BELOW IS BASED ON 20% DOWN FOR CONFORMING, 3% FOR FHA, FULL DOC, AND FICOS OF 740 AND ABOVE (change from last Friday):
30 year conventional at 1 point 4.875%… 0.000%
30 year conforming-jumbo at 1 point 5.00%… 0.000%
30 year FHA at 1 point 5.125%… 0.125%
I hope everyone had an enjoyable and safe New Year's celebration; thankfully we celebrate ringing in the New Year on East Coast time so I am able to make “midnight” before my bedtime.
2009 will be as successful as we each choose to make it, choose success!
Remember this update is posted weekly on My Blog at DennisCSmith.com ; feel free to forward the link to family and friends who may be interested in past commentaries.
