Archive for September, 2010

Forbes List of America’s Most Expensive Zip Codes

Thursday, September 30th, 2010

 

Long Island posted 32 of the richest zip codes according to Forbes Magazine.
 
In Manhattan, 10014, 10065 and 10012 all made the top 10!
           
The Hamptons and Nassau’s Gold Coast dominated Long Island’s positions. Watermill topped the Hamptons at #17 (Click here for the full list)

Home Prices Continue to Recover!!

Wednesday, September 29th, 2010

 

July 2010 was the fourth straight month of home sale price increases according to Standard & Poor’s / Case – Shiller 20 City Home Price Index.
           
The June to July increase was 0.6%
           
In all, 12 of the 20 cities showed monthly price gains.
           
The greatest monthly price increases were in New York, Detroit and Washington where all three cities increased approximately 1%!
           
Nationally, home sale prices rose about 7% from the recorded bottom in April 2009.
           
More statistical evidence of a recovery with solid traction.

 

MORTGAGE MARKET WEEKLY UPDATE

Monday, September 27th, 2010

If you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Sep 27, 2010 // Vol. 8, Issue 39
In This Issue

Last Week in Review: The Fed met, but did their statement “charm” the markets?

Forecast for the Week: The Fed’s favorite gauge of inflation, a read on the consumer perspective of the economy and more are in store, but what will be in store for home loan rates?

View: Fall just started, which means now is the perfect time to make sure your house is ready for winter. Do you know what you need to do?

Last Week in Review

It’s been said there’s a pot of gold at the end of every rainbow. Yet, after last week’s regularly scheduled meeting of the Federal Open Market Committee, the Fed helped gold seem more “charmed” than ever. What happened, and what does this mean for home loan rates? Read on for details.

As expected, last week the Fed decided to keep the Fed Funds Rate (which is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on) at 0.25%. The Fed also reiterated that economic conditions warrant keeping the Fed Funds Rate low for an “extended period”.

But the Fed’s Policy Statement was clearly more downbeat on the economy and showed greater deflationary concerns than the previous Fed Statement. It also gave the feeling that the Fed will jump in with more Quantitative Easing (QE) if necessary. QE means the Fed is prepared to create Dollars through Treasury purchases, which in turn causes the Dollar to weaken. And last week, in response to the Fed’s statement, we saw precious metals like Gold and Silver move higher as a hedge against a weaker US Dollar.

But, the Fed’s Statement is also significant because another round of QE by the Fed could mean continued good news for Bonds and home loan rates. What’s more, last Friday, respected hedge fund manager, David Tepper, noted that the shift in the Fed’s statement also puts Stocks in an almost “no lose” position.

Why is this? Should the economy improve, Stocks go up. But should the economy weaken, and the Fed jumps in with more QE, Stocks could also benefit because more QE alongside a weaker economy brings the Dollar index down, making our exports more attractive. This will greatly help large US multi-national corporations, which have a high influence on the major US Stock indices. The Fed clearly has some big decisions to make in the coming weeks and months to help ensure our continued recovery, and I’ll be watching closely to see how Bonds and home rates are affected. Last week, for instance, Bonds and home loan rates ended the week about .125 percent better than where they began.

Another thing to note – there was a mix of housing news last week. Housing Starts rose 10.5% in August from July, which was above expectations and was the highest level in 4 months. Building Permits, a sign of future construction, gained 1.8% and were also better than anticipated. In addition, New Home Sales came in near expectations, while Existing Home Sales were slightly above expectations – but still 19% below the sales pace of a year ago. Also, the inventory of unsold homes was reported at an 11.6 month supply for existing homes and an 8.6 month supply for new homes. Remember: The level of improvement in housing is a big indication of the strength of our economic recovery.

If you or anyone you know would like to learn more about taking advantage of historically low home loan rates and a great supply of available homes, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge.

IT’S OFFICIALLY FALL, WHICH MEANS IT’S THE PERFECT TIME TO MAKE SURE YOUR HOUSE IS READY FOR WINTER. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR IMPORTANT TIPS THAT CAN HELP… BEFORE THE COLD WEATHER ARRIVES.

Forecast for the Week

Will any of this week’s reports be good luck charms for home loan rates? Wednesday’s Gross Domestic Product (GDP) Report is an important one to watch, since GDP is the broadest measure of economic activity.

Information about the Labor Market is also important these days, which is why the Labor Department has decided to delay the Jobs Report for September one week, until Friday, October 8. However, this Thursday does bring another Initial and Continuing Jobless Claims Report. Last week’s report was disappointing, as Initial Jobless Claims were above expectations and represented the first rise in 5 weeks.

Friday we’ll get a read on the consumer perspective of the economy with reports on Personal Income and Personal Spending as well as the Personal Consumption Expenditure (PCE) Index, which is the Fed’s favorite gauge of inflation. Given the deflationary concerns in the Fed’s Policy Statement last week that we discussed above, the Fed will certainly be watching this report closely.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, while Bonds and home loan rates ended the week better than where they began, they were unable to improve above a key resistance level. I’ll be watching to see if they can break through this level this week.

———————–

Chart: Fannie Mae 3.5% Mortgage Bond (Friday, September 24, 2010)

The Mortgage Market Guide View…

Winter’s Just Around the Corner. Are You Ready?

We’ve past the point of no return. The Autumnal Equinox occurred last week, and we’re now headed into the shorter, colder days of fall and eventually winter. Whether you live in a cold northern climate or a moderate southern climate, there are a number of steps you need to take to make sure your house and yard are ready for the impending winter season. By following the advice below, you can make sure your home is ready… inside and out!

What should you do outside your home?

If you live in an area with high moisture, you’ll want to apply an additional coat of sealant to wooden decks. Chances are the summer sun has caused deterioration to the deck’s protective layer, and re-sealing it will ensure that the wood won’t absorb an excessive amount of water. If your area experiences extremely low temperatures, sealing any cracks in your driveway or sidewalk is also a good idea. If you have outdoor furniture or a barbecue, you’ll want to cover them up or store them in the garage.

In terms of the shrubbery around the outside of your home, two precautionary steps will greatly improve the way it will look once winter has lifted. First, prune away any weeds or dead foliage from the base of each shrub. Next, add a layer of mulch to the surrounding ground, especially to any perennial flower beds.

Once you’ve tended to the greenery, you may want to winterize your power equipment. Fall is the perfect time for draining gas from lawn mowers and oiling any power tools. You’ll also want to drain garden hoses, roll them up, and store them in the garage. If you want to take extra precautions, drain your outdoor faucets and cut off the water. This will keep pipes from freezing and eventually bursting. If you live in an area where it snows, do yourself a favor and make sure your snow removal equipment is in proper working order.

In terms of a home’s exterior, the key word to keep in mind is “leaks.” Leaks not only allow cold air to enter your home but water as well. Start by inspecting the home’s foundation and exterior walls. Minor cracks can usually be sealed by using a caulk that’s appropriate for the temperature of your region. Special attention should be paid to the wall area around windows and outdoor faucets. Also, if you have storm windows, now is the time to install them.

The Great Indoors

It’s time to make our way inside the home, and take another look at the topic of leaks. Preventing air leaks will not only ensure a cozier home, it will also help you save on your energy bill. Start by weather-stripping all windows and doors. It sounds like a big job, but in most homes this can be accomplished in one day. Also, look for leaks around wall outlets. Once again, the appropriate caulk will do the trick when it comes to creating a proper seal. Don’t forget to check the attic or cellar for leaks as well.

Regardless of the type of heating system you have, it’s a good idea to have it checked and maintained by a professional. Clean ducts and filter replacements can go a long way when it comes to improving efficiency. Also, be sure to clean and vacuum any heating vents, and keep the flue or damper closed when your fireplace is not in use.

As far as plumbing is concerned, every homeowner should periodically check their hot water heater for leaks, no matter where they live. This is the last thing you’ll want to repair during the cold months. You may also want to consider purchasing a hot water heater blanket. It’s a $15 investment that will increase the heater’s efficiency. If you live in an area known for very cold weather, you may have a problem with pipes freezing. This can be alleviated by wrapping the pipes that are most prone to freezing with heat tape, which can be purchased at any hardware store.

Lastly, if you’ve experienced serious weather issues in past years, you may want to prepare a comprehensive emergency kit for your home. It never hurts to be prepared.

Good luck on your projects… and have a happy and safe winter!

————————–

Economic Calendar for the Week of September 27 – October 1, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of September 27 – October 01
Date ET Economic Report For Estimate Actual Prior Impact
Tue. September 28 10:00 Consumer Confidence Sept 52.9 53.5 Moderate
Wed. September 29 10:30 Gross Domestic Product (GDP) Q2 1.6% 1.6% Moderate
Thu. September 30 08:30 GDP Chain Deflator Q2 1.9% 1.9% HIGH
Thu. September 30 08:30 Jobless Claims (Initial) 9/25 457K 465K Moderate
Thu. September 30 09:45 Chicago PMI Sept 56.0 56.7 HIGH
Fri. October 01 10:00 Consumer Sentiment Index (UoM) Sept 67.0 66.6 Moderate
Fri. October 01 08:30 Personal Consumption Expenditures and Core PCE Aug NA 1.4% HIGH
Fri. October 01 08:30 Personal Consumption Expenditures and Core PCE Aug 0.1% 01% HIGH
Fri. October 01 08:30 Personal Spending Aug 0.3% 0.4% Moderate
Fri. October 01 08:30 Personal Income Aug 0.2% 0.2% Moderate
Fri. October 01 10:00 ISM Index Sept 54.5 56.3 HIGH

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: ejarrett@manhattanmortgage.com

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Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
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MORE GOOD NEWS

Tuesday, September 21st, 2010

 

The US Commerce Department released a statement this morning that US Housing Starts increased 10.5% in August.
This is the highest level in 4 months to a seasonally adjusted annual rate of 598,000 units.
New permits for future homes also rose 1.8% to 569,000 in August.
While the rebound of the US Housing Market hit a bad patch after the abrupt expiration of the tax credit, clearly we are crawling back from the worst housing crisis since the Great Depression.
This good news, on the heels of yesterday’s NBER announcement that the recession ended last year, all help to lift the sentiment of the general public and corporations who have been waiting on the side lines for just this confirmation! Emotions are a big part of the recovery efforts. The pain, both financial and emotional, that this country experienced caused a deep wound that will take some time to heal completely.
With our sites firmly set on the future we will all emerge stronger and wiser from having experienced this.

Morgage market Weekly Update

Thursday, September 16th, 2010

If you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Sep 13, 2010 // Vol. 8, Issue 37
In This Issue

Last Week in Review: Home loan rates started to shift… but in which direction? Read on for details.

Forecast for the Week: With double doses of manufacturing and inflation news, plus reports on retail sales and jobless claims, plenty of action is ahead.

View: Wondering how much house you can afford? Read on for a simple formula that can help.

Last Week in Review

“ACTIONS SPEAK LOUDER THAN WORDS.” Despite the markets being closed last Monday for Labor Day, there was plenty of market action… and plenty of words from the Fed. So what happened, and what was said? Read on for details.

After the recent 4-month rally in the Bond markets, which has led to some of the best home loan rates in history, money has started shifting over to the Stock market. Why has this happened? Some economic reports have been better than expected in the past few weeks… such as the Jobs Report for August and Consumer Confidence. While that’s great news, it’s important to remember that good economic news – or as has happened recently, better than expected news – often causes investors to move their money out of the safe haven of Bonds to Stocks in the hopes of taking advantage of any gains.

So why does this behavior impact home loan rates? When the economy appears strong or starts to improve, and investors move their money from the safe haven of Bonds to Stocks, a decreased demand for Bonds means that Bond prices move lower. And when Bond prices move lower, it means that Bond yields – and consequently home loan rates – move higher.

In fact, given the recent better than expected economic news, St. Louis Federal Reserve Bank President James Bullard last week shifted away from previous comments he had made about deflation and said that while he sees a slowdown in the economy for the second half of this year, he predicts a pick up in 2011. He also said that the Unemployment Rate will likely fall next year, and business spending should start to rebound.

While continued improvements to our economy are good news, one big impact is that home loan rates will start to increase. And when home loan rates start to increase, they tend to increase quickly. That being said, while home loan rates ended the week about .125-.25 percent worse than where they began, they are still near some of the best levels we have ever seen!

If you or anyone you know would like to learn more about taking advantage of historically low home loan rates while they remain so, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge.

One of the most important actions we can take this time of year is to remember all those who were injured, lost their lives, or lost loved ones on September 11, 2001. May we never forget those we lost, and may we thank those who work everyday to keep our families safe and protected.

WHEN YOU’RE BUYING A HOUSE, THE LAST THING YOU WANT IS TO BUY MORE HOUSE THAN YOU CAN REALLY AFFORD. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR A SIMPLE FORMULA THAT CAN HELP.

Forecast for the Week

This week’s full economic report calendar is sure to bring plenty of action, beginning with Tuesday’s Retail Sales Report. If the news is positive, this could benefit Stocks at the expense of Bonds and home loan rates, so I’ll be listening closely for the details.

We’ll get a double dose of manufacturing news this week, with Wednesday’s Empire State Index, which looks at New York State’s manufacturing sector, and Thursday’s Philadelphia Fed Index, which is one of the most important regional manufacturing indices. Double the inflation information is also on tap this week, first with Thursday’s Producer Price Index, which measures inflation at the wholesale level, followed by the Consumer Price Index on Friday. Remember, inflation is the archenemy of Bonds and home loan rates, so any hint that inflation is increasing could cause home loan rates to worsen.

Thursday also brings another weekly Initial Jobless Claims Report. Last week, initial claims came in at 451,000, better than the 470,000 expected, and representing the lowest number since the week of July 9th. This adds to the improving trend since the recent peak at 504,000, hit a few weeks ago. Meanwhile, Continuing Claims remained basically steady at 4.5 million – which is still a very high number.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, Bond prices and home loan rates have worsened since the end of August. I’ll be watching closely to see what happens next.

———————–

Chart: Fannie Mae 3.5% Mortgage Bond (Friday, September 10, 2010)

The Mortgage Market Guide View…

Simple Formulas for Affordability and Saving

When people decide to buy a home, the monthly payment is a crucial factor. Conservative underwriting state that borrowers should allocate no more than approximately 30% of their gross monthly income for a house payment. Looked at from another perspective, this means if your monthly income is $4,000, you should keep your house payment under $1,200 a month.

How much home can you afford?

Affordability is a function of home price, interest rate and down payment.

The one key component in home affordability that is at greatest risk today is rates. The fact is that home loan rates are still at historically low levels. But they can’t stay this low forever. In fact, many experts have stated that home loan rates should really be higher than their current levels, due to some of the stimulus that has benefitted Mortgage Bonds. That means that right now homebuyers can get more for their money than they realize, but if rates go up even a little bit they could miss out.

Here’s a simple formula that drives that point home…

In simple terms, every 1% increase in home loan rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and home loan rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment.

If you could benefit from moving to a new home, don’t let this time pass you by. Home prices are starting to stabilize and even increase in many markets, but homes are still at incredibly affordable levels. By making a move now before home prices or rates increase, homebuyers can get more for their money and still get the payment they’re comfortable with.

And for those people who haven’t refinanced in the last 18 months, today’s situation provides you with the opportunity to either cut your house payment… or save even more over the long run, by reducing the term of your mortgage to a 15 or 20 year fixed rate.

As always, I’d be happy to answer any questions and help calculate any scenarios that would help with your decision-making. Just call or email me today.

FINALLY!!

Thursday, September 16th, 2010

 

Brett Arends, writer for the Wall Street Journal, wrote a clear, concise and important analysis of the current home buying status in his article titled “10 Reasons to Buy a Home” on September 16, 2010 7:13 am ET. (Read the article here)
 
He was the first journalist to publish both the good and not so good analysis in plain and simple language. In the end, “10 Reasons to Buy a Home” article firmly reminded his readers home ownership is still the American Dream!
 
His 10 Reasons:
1.      You can get a good deal.
2.      Mortgages are cheap.
3.      You’ll save on taxes.
4.      It’ll be yours.
5.      You’ll get a better home.
6.      It offers some inflation protection.
7.      It’s risk capital.
8.      It’s forced savings.
9.      There is a lot to choose from.
10. Sooner or later, the market will clear.
 
For all those reasons, and many more, there’s been no better time to buy a home than the current.
 
Thank You Brett!!

 

Home Sale Prices Improve!

Thursday, September 2nd, 2010

Home prices rose 1% in June from May AND 4.2% year over year, according to Standard & Poor’s / Case Shiller 20 city – home price index report released August 31st.

17 cities in all showed monthly gains; NYC was up 1.3% May to June.

The second quarter of 2010 showed nationally, home prices rose 4.4% – a welcomed shift for the housing market.

Here on Long Island, MLSLI has reported that in Nassau County the July median home sale price rose 6.1% to $435,000 from July 2009.