June 28, 2007

Harvard Study released its annual State of the Nation's Housing report for 2007.
Too soon to look for housing market bottom

While it states that the longer-term outlook for housing is (more) upbeat, the length and depth of the current correction will depend on the course of employment growth and interest rates, as well as the speed with which builders pare down excess supply. The influx of immigrants and their children has and should continue to drive household growth between 2005 and 2015 and, with the enormous increase in household wealth over the past 20 years, healthy income growth will help propel residential spending to new heights.

Mortgage News Daily

Too soon to look for housing market bottom

The report on new home sales mirrored a report Monday on existing home sales, which showed a 0.3 percent drop in in May nationwide. The median price of an existing home in May dropped 2.1 percent from a year ago to $223,700 — the 10th consecutive month of year-over-year declines, according to the National Association of Realtors. Inventories of unsold homes are at their highest level in 15 years.

Monday’s report also came with a gloomier outlook: The real estate trade group now expects existing home sales to fall 4.6 percent this year, worse than its previous forecast of a 2.9 percent drop. And the median price for a home is expected to fall by 1.3 percent this year — the first annual decline on record.

On top of rising inventories of unsold homes and a wave of foreclosures on bad loans, the housing market is now feeling the impact of a recent jump in mortgage interest rates.

"That will lead to another down leg in housing in the next two to three months and put more pressure on home sales and home prices in the coming month," said Thomas Higgins, chief economist at the investment management firm Payden & Rygel.

FOMC seen sitting tight on monetary policy
By Greg Robb

The nation's economy is looking pretty good and inflation pressures are easing, but don't look for any cigars or champagne from the Federal Reserve at the end of their two-day meeting Thursday.
Instead, the central bank will be cautious, preferring to sit tight and make only minor changes to its statement, analysts said.
The Fed is widely expected to hold its federal funds target rate at 5.25% for the eighth straight meeting, spanning one year.


Know Which 'Junk Fees' to Trash

Sandy Gadow, author of "The Complete Guide to Your Real Estate Closing" offers this advice:

When you applied for your mortgage, the bank gave you a good-faith estimate, which outlined costs you would incur. Let's look at the other fees typically disclosed here.

The first category of charges listed are those items payable in connection with your loan. These may include an origination fee, points, appraisal fee, credit-report fee, mortgage-broker fee, underwriting fee, processing fee, courier fee and wire transfer fee. An origination fee and points are typically a set fee that you have agreed to pay to obtain your loan. It may be a percentage of the loan amount, say 1 percent.

An appraisal fee and a credit-report fee are typically not negotiable, as the lender or your mortgage broker will order these. Even though you may have an appraiser who will offer you a reduced fee to perform the appraisal, the lender may require that the appraisal be done by one of its "approved" appraisers. If you do, however, have an appraiser that is considerably less costly than the lender's, your appraiser can typically become certified by your lender by simply providing the lender with certain licensing certifications.

The mortgage-broker fee listed on the good-faith-estimate form is negotiable. The lender's inspection, underwriting and processing fees may be somewhat negotiable, but many lenders stay fairly firm on these fees.

Courier and wire-transfer fees are typically charged for transferring loan documents to the escrow closing company and wiring the loan proceeds to the closing officer. You may ask that these be reduced or waived. Ask if your lender has the ability to transfer the documents electronically. Verify that the closing agent has not marked up these fees.

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