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Saturday, July 6, 2013

★EconomicUpdate for the week of July 5★

 
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                                        Economic  Update for the week of July 5




‎#Realestate ‎#Market ‎#Economy ‎#Mortgage ‎#Rates

 
This holiday week was a short one for many but it ended on a high note.
Mortgage rates stabilized Monday, Tuesday and Wednesday a bit after spikes over the last few weeks before rising sharply today after the jobs report was announced. Freddie Mac’s Weekly Primary Mortgage Survey found that the average for a 30-year-fixed conforming mortgage was 4.29% percent, down from last week’s average of 4.46%, The 15-year-fixed rate average 3.39% down modestly from last week’s 3.5%. Unfortunately, the FNMA 30-year-fixed rate hit 4.75% today, about a 3/8% rise from Wednesday, and 1/4% higher than last Friday. High balance conforming hit 5% and jumbo is around 5.25%. The 15 year rates also rose sharply.

I do think the rates will settle a little next week as this seems an extreme reaction given the unemployment rate didn't change. Overall, I would expect rates will continue to climb more gradually for some time until we get close to the 6% range.

Tuesday, CoreLogic released data showing that home prices rose 12.2% in May compared with the same month a year ago. This was the largest monthly increase since February 2006 and slightly below the predicted rise of 12.5% for May. The month-over-month rise was 2.6% including distressed home sales. Excluding distressed sales May prices rose 2.3% compared with April and were up 11.6% year over year. CoreLogic predicts June’s housing prices including sales of distressed properties will rise 13.2% year over year and 2.9% month over month. Excluding distressed sales, CoreLogic’s year-over-year increase for June is forecast at 12% and the month-over-month estimate is forecast to rise by 2%.

Among the 100 largest U.S. cities, 97 showed a year-over-year increase in home prices. The largest gains (including distressed properties) came in the Los Angeles metro area which was up 19.8%. This is much different from the Data Quick and CAR which showed year over year price increases in the 30% range in Southern California. Those were for median price which means half sell for more half sell for less. This report is for an increase of individual homes which is not an exact formula as neither is probably right for every individual area. Either way they both show what we know, prices are rising sharply and steadily with no end in sight at the moment.

I hope you had a good 4th and I wish you a great Holiday weekend!

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