Rates and Market Updates

This week was filled with housing-related news. The modest pop in housing starts - new construction (led by multi family), was positive though most analysts believe that there is little reason to believe that the U.S. will see a real pickup in home construction any time soon. The most recent data from the Census Bureau shows 13.4 million vacant homes, roughly 3 million above a normal market. Much of this is from the big increase in vacancies that we saw in 2005-2006 when overbuilding hit its peak. The fastest-growing category of vacancies is in homes that the owner would like to sell or rent but are currently "held off"the market, and it is yet another form of shadow inventory that will eventually have to be absorbed.
We also had the FHA Home Price Index increase by .4% in May, the second consecutive monthly increaseand better than the expected 0.1% increase. April's results were revised downward to a 0.2% increase from an initial estimate of a 0.8%increase.   Year over year, home prices were still down 6.3%, and the index remains 19.6% below its peak in April 2007 and roughly equal to the level of January 2004.
Rates crept up during the latter half of the week, mostly due to speculation that Greek bonds will receive some type of European guarantee. Just as investors move money during a "flight to safety," they move it out again when risk is reduced - and that is what we saw Thursday. The EU side of the debt drama appeared to be making some progress as opposed to the US debt ceiling impasse. The 10-yr closed at 3.01%,and traders reported higher selling of mortgage-backed securities on the sell-off. There are no economic releases scheduled for today, Friday July 22. The markets will stay focused on the deals being reached in Europe and in the US with an eye on what our stock market is doing. 
An apparent consequence of Dodd Frank, MetLife Bank is for sale - but not the mortgage company. In a quote that tells it all, "MetLife Bank represented just two percent of MetLife Inc.'s first quarter 2011 operating earnings, and we do not believe it is appropriate for the overwhelming majority of our business to be governed by regulations written for banking institutions," said Steven Kandarian, president and chief executive officer of MetLife Inc. MetLife Inc. said that it is considering the sale of its Met Life Bank N.A.'s depository business and eliminating the company's status as a bank holding company. The firm said it will still offer residential mortgages through its MetLife Home Loans business.

30 year fixed - 4.50% + 0 cost points for rate
20 year fixed - 4.250% + 0 points for rate
15 year fixed - 3.625% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.250% + 0 points for rate

FHA/VA
30 year fixed - 4.375% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.50 with 0 point for rate

Jumbo - over 729,000
30 year fixed - 4.99 % with +.50  points  for rate
15 year fixed - 4.625% + .250 cost points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate