CHANGING MORTGAGE RATES HAVE NO IMPACT ON HOME BUILDER CONFIDENCE

Even though markets have continued to be volatile, changing mortgage rates have had no impact on home builder confidence. According to the National Association of Home Builders/Wells Fargo Confidence Index, builder confidence remained at 58 for the month of September, the highest level in nearly eight years. Any reading above 50 means that a larger number of builders see housing conditions as good.

According to the most recent survey of wholesale and direct lenders performed by FreeRateUpdate.com, current conforming 30 year fixed mortgage rates are as low as 4.000% (APR 4.363%); 15 year fixed mortgage interest rates are as low as 2.875% (APR 3.432%) and 5/1 adjustable mortgage rates are as low as 2.375% (APR 2.636%). Low mortgage rates are available for borrowers who have been able to maintain a history of good credit and have the qualifications that are required by lenders.

While home purchases have been on the upswing, the week ending September 6th saw a decrease of 3% on a seasonally adjusted basis for applications in the Purchase Index, according to the Mortgage Bankers Association. Volatile mortgage rates has also hit the Refinance Index which decreased 20% from the previous week.

Applications for mortgage refinances is down 71% from the recent peak reached May 3, 2013 and at the lowest level since June of 2009. HARP refinances, which will be available until the end of 2015, remained steady for the week. HARP refinance loan applications were unchanged and represented 38% of total refinance applications.

Current FHA 30 year fixed mortgage rates are as low as 3.750% (APR 4.232%); FHA 15 year fixed rates are as low as 2.750% (APR 3.479%) and FHA 5/1 adjustable mortgage rates are as low as 2.500% (APR 2.892%). Borrowers who have been through a bankruptcy, foreclosure, deed-in-lieu or short sale can now purchase a home using an FHA mortgage after 12 months have passed. This is an opportunity for many consumers for whom the waiting period has already passed.

Even though FHA closing costs (APR) are high because of the upfront mortgage insurance premium and other FHA fees, consumers should take into consideration the benefits offered by FHA, such as using seller concessions up to 6% to help pay for expenses related to the mortgage. There is also the FHA streamline refinance which allows homeowners to move in to a better mortgage without the need of a credit history or appraisal. There is still time left for homeowners who have loans that were FHA endorsed prior to June 1, 2009 to use the FHA streamline to refinance with reduced upfront and annual MIP fees. This special offer is set to sunset at the end of this year 2013.

Jumbo 30 year fixed mortgage rates are as low as 4.000% (APR 4.308%), jumbo 15 year fixed rates are as low as 3.125% (APR 3.545%) and jumbo 5/1 adjustable mortgage rates are as low as 2.750% (APR 2.938%). Borrowers who have excellent credit and qualifications can obtain low jumbo rates available through lenders. Jumbo loan rates have become extremely competitive as they remain the same or lower than conventional loan rates at this time.

As a result of this unusual occurrence, jumbo loan volume has seen an incredible increase this year. According to Inside Mortgage Finance, volume from the first to second quarter 2013 rose 20%.
MBS prices (mortgage backed securities), which move mortgage rates in the opposite direction, have been higher for several days which has stabilized mortgage rates. With markets continuing to be unpredictable, consumer sentiment dropped 5.3 points to 76.8 in early September, according to the Thomson Reuters/University of Michigan's report. This is the lowest since April. The Commerce Department reported that retail sales rose 0.2% last month as consumers purchased more long-lasting goods while receipts for clothing, building materials and sporting goods dropped.

Edward James Ferrara III spent 8 years (2001-2008) brokering and banking home loans in Orange County, CA to the tune of some 500 million dollars in mortgages funded by May of 2008, when he founded the rate research website FreeRateUpdate.com.