Real Estate & Market Report: September 13, 2013
by: Fred Arnold
Voyager 1 has indeed left our solar system and Home values increase.
After 36 years of space travel and months of heated debate among scientists, NASA confirmed Thursday that Voyager 1 has indeed left our solar system and had entered interstellar space more than a year ago. It has good company, as I think that 30-yr fixed 3.25% home loans are right there with it.
Without any major economic reports this week to sway the market, the market held on to a steady gradual rise almost reaching a new all-time high. Investor confidence came primarily from relief that the United States is not rushing to military action in Syria. By all reports at the present time the United States, along with many of their allies, are focused on achieving a negotiated peaceful solution to the questions that linger regarding chemical weapons.
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Mortgage rates rose last week placing a damper on loan applications as reported by the Mortgage Bankers Associations. Purchase applications declined by 3.0% where refinance apps plummeted 20%. Interest rates declined slightly this week due to strong demand for 10 YR Notes at Wednesday's government auction. The decline in rates is not expected to be enough to generate any type of significant increase in mortgage activity for next week's report, especially for refinances.
Thanks to a sharp increase in home values in the 2nd quarter of this year, 2.5 million more mortgage borrowers are no longer under water on their loan balances. It is reported that as of June 30th 7.1 million borrowers remained underwater which represents 14.5% of mortgage properties. This is a significant drop from the 1st quarter numbers of 9.6 million. When we look back at the worst period for real estate during the recession, it was estimated that 26% of borrowers were upside down on their equity position in their homes.
First time jobless claims declined to the lowest point since the recession all the way down to 292,000. There is a special factor, which is raising a question about the accuracy of the report. In two states, they are in the process of computer upgrades, which is leading some analysts to believe that the Department of Labor may have undercounted claims.
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In the absence of any other significant economic news, I decided this week would be a good time to recap some of the major news headlines that many people were following.
- Apple announces launch of IPhone 5S and less expensive IPhone 5C. Apple stock declined 5% on the news as more and more analysts feel that Apple is lacking significant innovation in their products
- A six story billboard is placed in Times Square stating opposition to the launch of Obamacare.
- The U.S. Postal Service is so broke that they are going to begin renting mail vans instead of purchasing new delivery trucks as the existing fleet ages.
After a very light week of data this week is shaping up to have a number of market moving reports:
- Monday September 16th - Industrial Production
- Tuesday September 17th -Consumer Price Index
- Wednesday September 11th - MBA Applications, Housing Starts, FOMC Meeting Announcement
- Thursday September 12th - First Time Jobless Claims and Existing Home Sales
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-505-4300.