Archives for July 2013

Los Angeles California Mortgage Rates Help Buyers

Anyone who lives in Los Angeles California or the surrounding areas will tell you that homes are selling fast, really fast.  Similar to 2004-2006 when homes sold in one or two days at 5-10% over asking price. Low Los Angeles California mortgage rates are one of the main reasons  why prices have gone up 15-20% over the last 9-12 months in some Los Angeles communities. Another is many buyers who sat on the sideline the last few years are jumping in.  Everyone should be happy right?  Not necessarily.  It seems many buyers and Real Estate agents have forgotten what happened just a few years ago and many people are taking on huge risks with bidding up properties 10% over asking price.  Buyers need to remember that back in 2008-2010 we had massive declines in some neighborhoods.  While it’s good to see values go up, it’s not so good to see them go up too much since that usually precedes a sharp pull back.  And with incomes, net income after taxes, still flat or declining these gains will be difficult to sustain at current market interest rates.

The Future of Fannie Mae and Freddie Mac – mortgage rates

Today President Obama gave a speech in which he talked about reforming the current mortgage system and potentially bringing and end to government control of the two largest players in the industry.  Mortgage rates, refinances, purchases etc have all benefited from the government’s role in Fannie Mae and Freddie Mac.  Their absence is cause for concern as it is not clear on what will happen post government influence.  So pundits believe it is all talk and that the government will never leave the industry since essentially the government is the industry (meaning they provide the backing for most loans).   Over the next 12-24 months we’ll see how this plays out and what the plans are for winding down Fannie Mae and Freddie Mac.

Mortgage Interest Rate Update 07.24.2013

Mortgage rates came under pressure today as bond yields went higher.  Upbeat data helped pushed yields to a 2 week high.  The Fed Chairman recently stated that if interest rate markets remained volatile it may cause the Fed to act.  Today’s move will not trigger this however if the volatility were to continue over the next weeks and yields went higher it would not be surprising to see the Fed step in to pus yields back down.  Refinance and purchase activity has slowed down significantly over the last 4 weeks and this will put a damper on August and September’s data reports.  Some lenders are reporting 60-70% drops in volume.