[dropcap style=”1″ size=”3″]S[/dropcap]outhern California home prices are the same in July from June as more houses went on sale and interest rates rose.The median sales price in the six-county region was $385,000 last month, unchanged from June, DataQuick said Wednesday.
Mortgage delinquencies in May posted thelargest year-to-date drop seen since 2002, Lender Processing Services (LPS) said today. Delinquencies were down 15 percent from the end of December 2012 to a May rate of 6.08 percent. This was a drop of 2.11 percent from April. LPS Applied Analytics Senior Vice President Herb Blecher said that much of this improvement is supported by the fact that new problem loan rates are approaching the pre-crisis average.
Blecher said, “Though they are still approximately 1.4 times what they were, on average, during the 1995 to 2005 period, delinquencies have come down significantly from their January 2010 peak. Fewer problem loans are coming into the system, the existing ones are working their way through the pipeline. New problem loan rates are now extremely close to average.
The average 30 yr mortgage rate jumped to 4.51% for the seven-day period ending on July 10th. That is an increase from 4.29% a week earlier and 3.98% for the second week in June. The higher rates increased monthly principle and interest payments by roughly 6.5%. OMG the rates for 10 yr loans are the same as what 30 year loans used to be just a short time ago.
Rates have climbed over a full point in recent weeks mostly on speculation about when the Federal Reserve will end its purchases Treasuries. The 10 year treasury bond determines mortgage rates.
Applications for purchase mortgages fell 3.1% last week from the last week in June, the second consecutive decline. However, the impact on the refinance side was much stronger.
An increase in mortgage rates will impact affordability and cause some shoppers to think twice about buying. However, rates are still low by historical standards. Rates were well above 4.5% until mid-2011. I remember a loan in 2000 that was 8%. The good part about climbing rates is that the decline in refinance activity will push lenders to search out more potential borrowers and ease credit standards, allowing access to credit for many borrowers who have been shut out in recent years and unable to take advantage of low rates.
The pendulum is swinging back again. After years of scrooge like actions by the banks, things are changing.
Rates are up to 4.6% for a 30 year fixed. If you hear lower rates quoted its because they are charging lots of points and fees. That’s the difference between the rate and the apr. The wider the difference, you more junk you are paying. The best rates are ones that have the quoted rate and the apr as the same.
This amazingly fast mortgage rate climb continues to be one of, if not THE most significant move in the modern history of mortgage rates (in terms of the pace of change)
The upside is that banks are now loaning more freely than they have been in the last few years. As rates climb, there is less refinancing going on so the banks are loosening up They are accepting lower downpayments and lower ficos
In the last 2 years, there was a sevenfold increase in down payment requirements of between 3.5 and 5%/ THESE ARE NOT FHA LOANS. Even Wells Fargo is offering 3% downpayment loans.
Piggyback loans have returned. That’s also called a 80-10-10. You put down 10% and have a fisrt of 80% and a 2nd of 10%. It’s cheaper than having mortgage insurance.
In addition, the debt to income ratio is growing again. Things are not like the were before- you still have to qualify. It’s starting to look like a normal mortgage market.
Current Mortgage rates are up a full percentage point above their recent record lows, raising costs for borrowers and questions about the housing recovery.
A standard 30-year fixed-rate home mortgage rate hit an average of 4.63% on Monday before backing off just slightly Tuesday, according to HSH Associates. That’s up from 3.49% on May 3 and an all-time average low of 3.44% during a week in December
Higher rates mean folks can qualify for less of a mortgage- if at all. At 3.5%, a borrower who bought a Southern California home for May’s median price of $368,000 would have a principal-and-interest payment of $1,322, assuming a 20% down payment.
At 4.5%, that payment rises to $1,492.
At At 6%, still a decent rate by historical standards, the payment goes up to $1,765.
Most experts suggest that rates will hit 5% by this time next year. If you have not purchased a house and you can qualify-DO IT NOW-. In fact buy 4 houses. You will thank me. Don’t even look for a great deal. The low interest rate makes it a great deal.
If you can qualify and want to do a deal with me, let me know.