Mortgage Information and insight from a Utah Mortgage Lender.

New home sales drop 11 percent in January, new low

New home sales plummet 11 percent in January, the 3rd monthly decline in a row

Story from YahooFinance.com

WASHINGTON (AP) -- Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who were expecting a 5 percent increase over December's pace.

While winter storms were partly to blame, home sales have fallen for three straight months despite sweeping government support. Economists were already worried that an improvement in sales in the second half of last year could falter as various government support programs are withdrawn.

"There is no doubt that January and February are going to be messy months for housing, given the severe weather conditions, but that doesn't take away from the fact that the housing sector has taken another big step back, even with the government aid," Jennifer Lee, a senior economist at BMO Capital Markets, said in a research note.

A rebound in housing in the second half of last year helped to boost overall economic growth back into positive territory. Each new home built, for example, creates about three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

However, economists are worried that if housing falters in coming months, that will be one more headwind the recovery will have to overcome. The decline to an annual purchase rate of 309,000 in January was 6 percent below the previous record low set in January last year.

"I don't think we are going to have a double-dip recession in housing, but it is going to take us longer to recover from a very deep hole," said Patrick Newport, an economist at IHS Global Insight.

January's weakness was evident in all regions except the Midwest, where sales posted a 2.1 percent increase. Sales were down 35 percent in the Northeast, 12 percent in the West and almost 10 percent in the South.

The drop in sales pushed the median sales price down to $203,500. That was down 5.6 percent from December's median sales price of $215,600, and off 2.4 percent from year-ago prices.

New home sales for all of 2009 had fallen by almost 23 percent to 374,000, the worst year on record. The National Association of Home Builders is forecasting that sales will rise to more than 500,000 sales this year, an improvement from 2009 but still far below the boom years of 2003 through 2006 when builders clocked more than 1 million new home sales per year.

January's data increased concerns that the housing rebound could falter in coming months as the government withdraws the support it has used to try to bolster the housing market. The real estate crisis was the epicenter of the country's overall recession, the worst downturn since the 1930s.

The Federal Reserve has been holding down mortgage rates by buying $1.25 trillion in mortgage-backed securities, but that program is set to end March 31. And temporary tax credits to bolster home buying are scheduled to expire at the end of April.

Federal Reserve Chairman Ben Bernanke told Congress Wednesday that by holding the securities on its books the central bank would continue to help keep mortgage rates low. Economists believe that as long as the Fed owns the securities it will reduce the overall supply and thus help support the price.

Bernanke, delivering the Fed's twice-a-year economic report to Congress, said that the Fed's record low interest rates were still needed to attack high unemployment levels and help the overall economy recover.

Dont Wait Until it is to Late Refinance Your Loan Now!

Hello everybody and thanks for all of your emails and phone calls inquiring about rates.  Simply put, they are Amazing.  There has probably never been a better time to lock in a low fixed rate on a refinance or purchase here in Utah or anywhere around the country (if your fortunate to still have equity in the area which you live).

I hope every one had a Merry Christmas and a Happy New Years celebration.  By now you have all made your new years resolutions and are still sticking to them, good for you keep it up.  I have hardly had a spare minute to breath but I have made some personal and business goals or resolutions that I am very excited about this year.  Planning is the key, a wise man once said "if you fail to plan, you plan to fail."  I truly believe that.

Just as the title to this post states, Don't Wait Until it is to Late Refinance Your Loan Now.  Take action this year, don't be fence sitter guy who sits on the fence for so long waiting for the "perfect opportunity" that he ends up with nothing but an aching butt with slat prints firmly imprinted.  Have the courage to take action, call me and fill out a loan application or visit my website www.refinanceinutah.com either way you can be well on your way to saving $1000's of dollars just by spending 15 minutes with me on the phone or on my site. 

No one know's where the bottom is and if someone tells you they do run don't walk away from that person as they are just as full of it as Bernie Madoff the latest schemer to swindle billions, yes I said billions of dollars away from his unsuspecting investors.  I have yet to meet someone that would be unhappy with a 4.875% 30 year fixed loan and if you meet that person let them know there are hot-lines for people who are that negative and cynical:)

From Saint George to Logan and everywhere in between I can take care of you and your family and friends with world class service.

Speaking of Saint George and World Class Service my family and I were fortunate enough to spend a few days down at The Inn at Entrada this last week for new years.  If you ever get the chance to stay there Do It.  We had a beautiful 3 bedroom casita.  I loved the huge windows across the back that over looked the 16th hole of the Entrada Golf Course and behind that was amazing views of Snow Canyon and red rock buttes.  It was a little piece of Heaven carved out and put in Santa Clara Utah.  You can check out their website at http://www.innatentrada.com/ It was the perfect place to get away for a few days and go for some hikes, watch bowl games and eat really really good food.  The warm cookies and mild delivered to your door each night is a nice touch too.

I will try and post some pictures from our trip in the next few days.  I cant wait for the golf season to get started again up here and I know it will be here before we know it.

The Fed's are finally spending that money that they pledged (and I blogged about) back in July.  They have changed the way they are using it though, initially they were going to buy troubled or bad MBS (mortgage backed securities) from banks to free up their balance sheets and liquefy some of their assets.  After further review the ruling on the field is that they are now showing up to the bond auctions and buying their own bonds.  They are actually bidding against the private sector from what I have been told in an attempt to inject more capital into the bond market, lesson the credit freeze and kind of artificially drive down the yields on these bonds thereby lowering long term mortgage rates and creating a refi boom which leads to home buying, remodeling, debt consolidation and ultimately creates jobs and spurs on the anemic economy.

This would be their attempt to make this recession as short as possible and try to help people stay in their homes and keep more foreclosures from hitting the market.  We will have to watch and see what the long term will bring with this play.  I know an artificial bubble of any kind is never good.  We have all seen the .com bubble burst and most recently we witnessed the commodities bubble and more specifically the Oil bubble go POP.  Is this bond market going to be the next bubble that literally over night pops like a balloon that floated up and hit my grandma's old asbestos ceiling?  Proceed with caution and we all need to take advantage while we can.

2008 was not my year in the sporting world.  The cougs ended the year by laying an egg that Mother Goose would be proud of, the Red Sox went down, the Jazz showed up to the playoffs with their bags packed in the back seat of the escalades and Ferrari's just waiting by the exits for their series to be over, OK I shouldn't include all the Jazz in that statement but I still have a bad taste in my mouth for the biggest dud C Booz.  New England lost Tom Brady right out of the gates this season and they actually did better the rest of the year then I would have ever guest.  The bitter sweet ending to the sporting year for me was watching and actually cheering at times for Utah while they were laying a whooping on Bama.  My hats off to those guys for this season and for how they finished it off but I hope I never have to watch that again.  A nice 2nd place finish in the Mountain West Conference would be just fine with me for the boys in Red.  The one bright spot in the sporting world for me in 2008 was when the US Ryder Cup team layed a gold old fashioned butt kicking on the Europeans.  That was as close to a championship that any of my teams made it to this year and I was pumped when Sergio plunked two in a row in the water when he was playing match play against Anthony Kim, that was euphoric for me.

I do have to give props to the US Basketball team for representing very well and of course to Michael Phelps who is the only swimmer I can still name off of that team and probably will be the only swimmer I will ever remember again in my life time, what he did was very Tigeresk don't you think?  Maybe even more dominant?

I feel like 2009 is going to be a very very big year in my life and in many of our lives.  We have a new President and for better or for worse he's there so I wish him the best.  I don't envy him in anyway coming in to take over this mess but then again I don't think anyone in their right mind envy's Bush and all that he has had to take on in his 2 terms as President.

I hope America can use this time to take a step back and reevaluate ourselves as a country and as a people.  I would love to see us all go back to when a hand shake was a deal.  When your word was your bond and when everyone was looking out for their own best interest but never at the expense of another.  I hope we are weeding out the Madoff's of the world right now and getting back to how it is supposed to be. 

I can always hope....

Stetson Lowe - Utah Mortgage Insider - www.utahloantips.com

30 Year fixed for 5.25% Simply Amazing

It has been a long time since someone has been able to lock in a 5.25% fixed rate on a mortgage in Utah, but the wait is over.  I have locked several loans in the last week at that exact rate.  With the recession finally being officially called it seems investors had enough of the stock market and started pouring huge sums of money into the bond market which has paid out as much as 7% so far this year and gaining every day.

The government is even buying it's own bonds in an attempt to give some liquidity to the bond funds and lower yields that were stuck at an unnatural point much higher then where the market indicators show they should be.

We broke through that invisible floor last week when the government announced its pledge to spend up to 600 billion to purchase bonds and mortgage backed securities.  That coupled with the recession call and continued economic weakness all have contributed to the bottom falling out of long term fixed rates.

If you are at or above 6% you can really save money by locking into one of these incredible 5.25% 30 year fixed loans or you can do as many of my clients have done and shorten your term to a 25 or 20 year loan while maintaining  close to the exact same payment.

If you are considering home improvements, debt consolidation, or buying a home there really will not be a better time to lock in your low rate I can promise you that much.

Thanks for those of you that have called in and please if you haven't yet called give me a quick ring to see what we can do to save you money 801-655-5111.  We can still get you closed by Christmas if you call me in the next few days and you wont have a January payment so it will give you time to catch up from the Christmas whirl wind of spending and fun.

Happy Holidays Everyone.

Stetson Lowe - Utah Mortgage Insider - www.utahloantips.com - 801-655-5111

Here is a news clip that explains the market right now and applies fairly well to whats happening in Utah. The only part I would disagree with is when she says the bank are requiring assets right now, I just got 3 loans approved with showing $1 in their bank account, score and a good payment history is still what the banks are looking for the most.

Utah Mortgage Update

Sorry I have been away for so long but I am back and ready to Blog each and every week again and sometimes more if you need it.

I was in Disney Land this past week with my family and I couldn't help but realize that it really is a magical place.  I was there for an entire week and each day I was excited to go (tired but excited).  I think that being around so many people that were having fun and checked their worries at the gate was refreshing.

Every day now I am asked the question "Is this mortgage market killing you? Is that hard that there is no money to lend?"  Initially I would give in to the depressed feeling and go along with the questions when asked, nod my head and agree.  But the truth is, the mortgage market is NOT that bad.  I had 2 loan closings while I was in the Magic Kingdom last week and they both closed in less then 2 weeks start to finish!  The conservative lenders that I have always worked with and will continue to work with are doing just fine and have billions of dollars to lend, and they are eager to lend it.

It is true that our economy is really struggling right now and that home values have receded, but again every market it cyclical and all economies have corrections and down turns, this one is just a lot bigger then most.

The banks that were greedy and engaged in buying junk bonds or sub-prime mortgage backed securities are toast or are losing billions every year, but there are a handful of lenders that never looked at a sub-prime loan and they are reaping the rewards for being conservative in the face of all the other banks that were turning huge profits there for a while.

It is true that I can not get any one with a pulse a loan.  I never did anyway.  Chances are the loan officer or company you got your last mortgage from is no longer in the business.  I say that based on the 1000's of people and companies who have failed to renew there licenses this year.

Now more then ever it is really important that you work with a loan officer that uses cutting edge technology and has maintained relationships with the lenders and banks that still have billions of dollars to lend.

The bond markets have been soaring these past few weeks as foreign investors are dumping billions of dollars into US Bonds as they are still seen as one of the safest investments in the world.  This is giving investors nice returns (7%) year to date on one of the bond funds, it also drives the yields down on long term bonds which is awesome for mortgage rates that are down to 6% and below on some programs Apr of 6.255%.

I have also been working very hard to roll out my commercial financing programs which will include financing for apartments 5+units, offices, medical buildings, franchised hotels, warehouses, storage units, gas stations, raw land and much more.

Give me a call today if you are looking to refinance or purchase this month or next, now is a great time with rates being low and you can skip your December payment!

Talk to you soon,

Stetson Lowe - Utah Mortgage Insider - www.utahloantips.com - 801-655-5111

Wachovia Ingested by Citi - Market Throws a Hissy Fit Over Bailout Rejection

 777

777 and NO I am not talking about a new Boeing luxury dream liner, I am talking about the number of points the Dow shed today while I was busy closing loans.  -6.98% to be exact, the largest single point loss in the Dow Jones history!  Let me clarify that it is not the largest loss by percentage, that still stands somewhere near 20%.  By the time I fired up the old lap top this morning at 8 am or so the Dow was already getting beat like a pi~nada at a fiesta and Bonds were being bought up as faster then the traders could hit buy on their trading domes. 

As the day progressed there came news that the proposed Bail Out hadbeen declined in its current form.  This sent the Markets into a giant hissy fit, temper tantrum that would have had my 2 year old running for cover.  He is the king of those types of fits and this one put him to shame.

The Dow was in a full scale avalanche and taking everything in its path with it.  I have been watching the markets closely for years now and have not seen a day like today, to be honest I would be fine not seeing another one like it, wouldn't hurt my feelings a bit.

Wachovia the nations 3rd largest bank by assets called it quits when the FDIC stepped in and helped broker "a deal" with former banking giant CITI.  There was a time when CITI was on top El Numero Uno, and with todays purchase  or virtual taking of Wachovia, CITI could be poised for another run at the big Kahuna #1 spot.  They will have a lot of work to do to catch JP Morgan and the solid acquisitions they have been making as of late (bear stearns, Washington Mutual).  It will be interesting to watch these 2 players and see what transpires over the next 5 years with them.  It was no surprise that Wachovia threw in the towel, it had been rumored for the last few months that they were on the brink of being down graded which can have nasty consequences in the banking world and severely affects one's borrowing power. 

It continues to amaze me that these big banks like the big oak tree's of their industry, have weathered all sorts of financial storms and have grown despite them, are now being chopped down and sold off as firewood probably never to be thought of again as the years go on.

There are many that are trying to use this bail out to further their political agenda's and for that shame on them.  This is serious business the likes not a single person in the White House, the TTreasury, the Federal Reserve Board, the Congress or the Senate have ever seen.  My prayer tonight is that there is a thread of inspiration left on Capital Hill.  That between the hundreds and even thousands of people involved in this legislation will know that we need to put aside any and all agenda's for a few weeks while this initial package, this literal crutch to the economy is put in place.  It's time to put our way of life, our dreams and our liberties first and go to work to figure out what is best for Our Country and not just Our Party.  I say this to both sides of the isle.

In the meantime we as Americans need to be wise and use good judgment each and every day.  Don't cancel your trip to Disney land and certainly don't stuff the mattress with what would become worthless money.  Be Smart.

Now will be a great time to lock in a LOW fixed rate mortgage and lower your interest rate by over a point for a lot of you.  When the markets suffer one of the silver linings for all of us is that long term fixed rates are low low low.

I heard someone say that if they increased the tax credit for first time home buyers to $25,000 from $7500 that it would spur on the housing sector like you wouldn't believe, and we all know what a stagnant, lifeless housing market which we are in right now can do to the economy.  On the other hand if we could get the fence sitters off the fence with a larger tax credit that may pay much larger dividends in the future and stop this economic spiral in its tracks.  Something to chew on....

Here are links to the proposed bailout legislation, abbreviated summaries, and Statements by Key Government Leaders.

Emergency Economic Stabilization Act

One Page Summary of the Act

Section by Section Summary of the Emergency Economic Stabilization Act

Treasury Secretary Paulson Statement on Emergency Economic Stabilization Act

FederalReserve Chairman Bernanke Statement on Emergency Economic Stabilization Act

We will see the Dow below 10,000 if not tomorrow it will be soon.  My prediction my be bold but it would not surprise me to see it hit 8,000 this year (next 12 months).

Keeping you informed,

Stetson Lowe - The Mortgage Insider - www.UtahLoanTips.com

P.S. BYU being voted into the top 10 in the AP poll helped a little to off set the sting of a day like today.  Go cougs keep giving us something to cheer about!