Colorado Mortgage Broker

For the second consecutive month, U.S. consumer confidence is plunging. July's official reading is its lowest since July of last year and the figures run in stark contrast to just two months ago, when the index touched a multi-year high.

According to The Conference Board, July's figures are reflective of a more pessimistic consumer; one concerned about "business conditions and the labor market".

Falling confidence numbers are presumed to be poor for the economy. For homeowner and Colorado home buyers in Denver , however, they can create opportunity.  Low confidence can influence the mortgage market in a positive manner, driving Colorado Mortgage Rates down.

Colorado Mortgage Rates are already at their lowest levels of all-time, spiking down this summer.

The link between consumer confidence and everyday mortgage rates roots in consumer spending.

Consumer spending accounts for close to 70% of the overall U.S. economy so, the thought goes that, a less confident consumer is less likely to spend money, thereby retarding economic growth. This harms the stock markets and drives cash to bonds, including mortgage-backed bonds.

More bond demand leads bond prices to rise which, in turn, pushes Colorado Mortgage Rates lower.

The other side of lagging confidence is that Americans may be less likely to take new financial risks when they're feeling unsure, including buying a new home. This can then drag on the housing market, negatively impacting home prices across Colorado.

Falling home values can help buyers, harm sellers, and stymie would-be refinancers.

It's tough to predict how consumer confidence data will work its way through the economy, but in the near-term, it appears to be helping mortgage rates stay low. If you're floating a Colorado Mortgage Rate with your lender, or contemplating a Colorado Refinance, the time may be right to lock in a rate.

One thing is certain- Low rates can't last forever.

Standard & Poors released its Case-Shiller Index Tuesday. On a seasonally-adjusted basis, between April and May 2010, home prices rose in 19 of Case-Shiller's 20 tracked markets.  It's the second straight month of strong Case-Shiller findings.  Denver, Colorado home values were among the markets that saw improvements

Also, May's numbers are a mirror-image of February's. In February, 19 of 20 markets lost value.

In its press release, the Case-Shiller staff resisted calling May's data proof of a housing recovery, noting that home values remain flat as compared to October of last year. However, there are some noteworthy numbers in the Case-Shiller report.

1. 13 of the 20 tracked cities are showing home price improvement year-over-year
2. Foreclosure posterchlld San Diego has now shown 13 straight months of improvement
3. San Diego, San Francisco and Minneapolis are showing double-digit annual growth

These are all good signs for the housing market, but the Case-Shiller Index is not without its flaws. Most notably, the data is limited to just 20 cities nationwide -- and they're not even the 20 largest ones. 

Cities like Houston, Philadelphia, and San Jose are excluded from Case-Shiller, while cities like Tampa (#54) are not.

Another Case-Shiller flaw is that it reports on a 2-month delay.

Therefore, today is several days from the start of August but we're now reflecting on data from May. Given the speed at which the Denver real estate market can change, May's data is almost ancient.  Today's values may be higher or lower than what Case-Shiller reports.

For Colorado home buyers, reports like the Case-Shiller Index may not be useful in making a "Buy or Not Buy" decision, but can aid in watching longer-term trends in housing.  For real-time data, talk to a Colorado real estate agent with access to local figures instead.

After a down month in May, the sales of newly-built homes appears back on track.

As published by the Census Bureau, June's New Home Sales report showed:

1. A 24 percent sales volume increase from the month prior
2. A 2-month drop in the supply of newly-built home

There are now just 210,000 new homes for sale nationwide.

June's data is a major improvement over May, but it's possible that the true "new home market" may be softer than the statistics suggest.  This is for several reasons.

First, we're comparing June's sales data to the worst month in New Home Sales history.

In May, sales of new homes totaled just 267,000 units nationwide. That's one-quarter fewer sales than in the previous worst month in New Home Sales history. May's sales levels were awful by any measure but June's improvement to 330,000 units remains second-worst sales levels ever posted.

Second, although much improved, June's new home supply of 7.6 months is elevated versus the historical norm near 6.0 months.  The last year has averaged 7.7 months.

For buyers of new Colorado Homes, this combination of low sales volume and higher-than-normal inventory may be a positive.  It's the main reason why homebuilder confidence is reeling and the downturn has opened some doors for big discounts and deals. Free upgrades and closing cost credits can make a well-priced home even more attractive.

Plus, with Colorado Mortgage Rates at all-time lows and expected to rise, Colorado Home Affordability may never be better.

Colorado Mortgage markets worsened last week for the first time in 6 weeks. Investors were pleased with corporate earnings reports and the European bank stress tests results.  Stocks gained on the news, and bonds lost.

Colorado Mortgage Rates rose last week, but only slightly. Rates are still hovering near their lowest levels of all-time.

Of the bigger stories last week was Existing Home Sales. As reported by the National Association of Realtors®, sales volume was down in June and home supplies were up. But figures were a bit better than expected, giving some hope for housing.

Notably, the number of move-up buyers outnumbers first-timers and the national median home price rose, suggesting that mid-to-upper home prices are getting some support.

This week, the market gets additional two pieces of housing data to add to the mix:

1. New Homes Sales (Monday)
2. Case-Shiller Index (Tuesday)

Both will have an impact on Colorado Mortgage Rates. In general, better-than-expected data should cause Colorado Mortgage Rates to rise; worse-than-expected data should cause rates to fall.

Also this week, there's two consumer confidence reports, the Fed's Beige Book, and late-in-the-week inflationary data.  Colorado Mortgage markets should remain volatile with so much news headed down the pipe.

It's too soon to declare the current 3-month rally over, but it's been 3 weeks since rates dipped. This can be a signal that Colorado Mortgage Rates have finally bottomed and that it's time to lock your rate.

If you're floating a mortgage rate, or thinking about a Colorado Refinance, it's time to get locked in. Rates may drop this week, but then again, maybe they won't.  There's little sense gambling on a bet as big as a mortgage.

However, there is a Hint At Support For Higher Price Tiers....

Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month, including Colorado Home Sales.

An "existing home" is a home that cannot be considered new construction.

The 5 percent drop in sales from May to June was expected, but a closer look at the month's data reveals some interesting trends.

First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That's a healthy increase for just 4 weeks' time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to "move up" to larger, more expensive property.  FHA Home Loans remain a great option for first time home buyers.

Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.  However, jumbo Colorado Mortgage Rates remain much higher than conforming Colorado Mortgage Rates.

Second, June's "distressed sales" accounted for 32 percent of all home resales, up from 31 percent in May.

A figure like this hints at the large role foreclosures continue to play in a Colorado Home Buyer's home search strategy.  And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.

Lastly, take note that home inventories are rising. June's 8.9 months of supply is the highest in 10 months. Excess supply leads to lower home prices, all things equal.

Overall, the Existing Home Sales data from June is a mixed bag. There's support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low Colorado Mortgage Rates and strong negotiation leverage.

The New York Times ran an important story this week concerning pregnancy and Colorado Mortgage approvals. Titled "Need a Mortgage? Don't Get Pregnant", the article discussed the difficulties that expecting and recently-expanded families are having with their Colorado Mortgage financing.

NBC's The Today Show picked up the story as well, as shown in the 3-minute clip above.

The crux of the issue is that maternity/paternity leave often leads to a change in household income and mortgage lenders will no longer assume one or both parents will go back to work full-time.  The loss of income can raise a household's debt-to-income ratio to unlendable levels.

Now, your Colorado Loan Officer cannot ask you about a pregnancy; such questions would be in violation of Equal Credit Opportunity Act. But he can ask if whether you expect your future employment and income situation to change. This would be a perfect time to broach the topic. And you should. If you're found to have withheld employment and income information from your lender at a later date, it could result in an immediate loan denial plus a loss of earnest monies paid.

Across both pieces, though, the prevailing message is this: Families concurrently planning to (1) have a baby and (2) buy a home should be up-front and forthcoming with their loan officers. Colorado Mortgage financing is often still available for families expecting an addition -- there's just some extra paperwork though which to work.

Be prepared for that paperwork and you're more likely to get your Colorado Home Loan.

Single-family Housing Starts eased lower last month, falling by 0.7 percent from May, or 3,000 units nationwide.

A "housing start" is a home on which construction has started.

June's Housing Starts data is somewhat soft and may partially explain why home builder confidence dropped to its lowest level since April 2009, but for Colorado Home Buyers and sellers in, the Housing Starts report is not nearly as bad as headlines say.

This is because when the press reports on Housing Starts, it doesn't single out single-family homes. The press lumps every type of home into a single, giant reading. As a result, news outlets are reporting Housing Starts down 5 percent -- a somewhat misleading figure.

The 5 percent figure is actually a combination of 3 separate housing types:

1. Single-Family Housing Starts
2. Multi-Unit Housing Starts (2-4 Units)
3. Apartment Building Housing Starts (5 or more units)

But, single-family homes are what most Americans purchase. This is why the single-family starts data is more relevant than the combined figure commonly reported by the press. 2-4 units and apartment buildings are a different realm of buyer.

That said, though, we can't even be sure that June's Single-Family Housing Starts report is accurate. As noted in the Department of Commerce's press release, the data's margin of error is 10.7 percent which means the reported results are of "no confidence".

In other words, there is no statistical evidence to prove the actual change was different from zero.

If Housing Starts did, in fact, drop in June, it will help to reduce the housing inventory, which will provide support for Colorado Home Values. For home sellers, this could be good news. Fewer homes for sale means less competition for Colorado Home Buyers.

One thing is for sure, Colorado Homes can be purchased at great value right now, with Colorado Mortgage Rates at historic lows, and values deflated by the poor economy.

Builder confidence in the housing market slipped this month, according to the National Association of Homebuilders' monthly Housing Market Index.

The Housing Market Index is actually a weighted composite of 3 separate surveys. One measures current single-family sales; one measures projected single-family sales; and one measures traffic of prospective buyers.

All three surveys were down in July:

• Single-Family Sales : From 17 (June) to 15 (July)
• Single-Family Project : From 22 (June) to 21 (July)
• Buyer Foot Traffic : From 13 (June) to 10 (July)

The HMI's July reading of 14 puts confidence at its lowest point since April 2009.

For home buyers in Denver, a drop in builder confidence could create an opportunity for negotiation.  With Colorado Mortgage Rates at record lows, this means great deals on homes in Colorado.

Remember, it wasn't too long ago that most Colorado home builders were flush with home inventory, unable to find willing buyers. To help move product at that time, builders dropped prices and offered incentives including free upgrades. If confidence continues to sag going forward, home purchase deals of that nature may return -- especially as the foreclosure market gets larger.

See, in the past, builders' main competition for Colorado Home Buyers were the existing home sellers.  Today, builders compete with the existing home sellers and the banks with REO. 

It's a terrific time to be a Colorado Home Buyer, in other words -- sellers are fighting for you. It's no wonder sellers have little leverage anymore. Couple that with all-time low Colorado Mortgage Rates and affordability for homes is at an all-time high.

If you're planning to buy a home later this year, you may want to consider moving up your time frame. The market looks ripe for good deals this summer.

The theme lately seems to have been LOW Colorado Mortgage Rates with rates dropping even further last week to the lowest levels ever seen.  By far this is the lowest I have seen mortgage rates in my 10 year career.  Locking clients in at 4.5% on a 30 year fixed rate with no points previously seem inconceivable, but now is a reality.

Why is this happening?  The bottom line is that the economy continues to stink and people are not convinced that there is an end in sight.

The chart on the left shows the incredible run-up we have seen on bond prices.  This is a 3-month history, and the trend generally has continued up.  Bonds hit a ceiling of resistance a couple weeks ago and rates bounced temporarily higher, but have since continued on their trend higher.

Both retail sales and consumer confidence came in last week very low, leading to an improvement in Colorado Mortgage Rates compared to the previous Friday.  In addition, manufacturing data remained sluggish suggesting companies are still reluctant to increase production and hiring.

Although not a heavy news week this week, some important housing data will be released.  On Tuesday, housing starts and building permits data will hit the wires, an indication of home builder sentiment.  Thursday brings the existing home sales numbers which will be interesting with the home buyer tax credit drawing to a close.

Despite the record low mortgage rates we have seen, home owners and prospective home buyers have shrugged off the news and applications for Colorado Home Loans are generally down.  However, savvy home owner's are grabbing the low Colorado Mortgage Rates that are available to lock in long-term interest savings on their mortgages.

Colorado Mortgage Market Update - by RJ Baxter 6/28/2010 Denver, CO

Good Morning....just a quick update this morning.  On vacation this week in sunny Hilton Head, SC.  We are heading out for a round of golf soon, so hopefully the 100 degree heat and 100% humidty doesn't kill us, if my slices and hooks don't!

As with most vacations I take, it's a "working" vacation this week, so don't hesitate to email me if you need anything.  I will be monitoring emails throughout the week and logging in to work for an hour or two each day.

As for the Colorado Mortgage markets- volatility was rampant last week.  We saw continued downward trends in rates spawned by horrible economic data, and many people locked in low rates mid-week.  Part of this trend was due to commentary from the FOMC's meeting, with Ben Bernanke down-grading the Fed's outlook on the economy.  In light of the recent weak data, including employment and housing, this does not come as a surprise, but must be frustrating for the Fed as they have used nearly all of the arrows in their quiver in an attempt to pull us out of recession.

However, on Thursday, we saw a sharp reversal as Colorado Mortgage rates spiked up.  The net result was that rates ended the week slightly higher than at the beginning of the week.

This week brings the all-important monthly unemployment report and some other economic data.  Remember that positive economic data is bad for Colorado Mortgage rates (higher rates), while negative economic data typically leads to lower Colorado Mortgage rates.

See Today's Colorado Mortgage Rates & find out more about getting a Colorado Home Loan