Wednesday, July 3, 2013

Close more Loans! - What You Can Do To Keep Buyers Buying.

Reuters recently reported that the rise in mortgage rates has cut into the home buyer demand. This would be troubling news for any lender or loan officer in the industry, however there may be a simple solution to help keep your business in the green, My Rate Mailer.

"Expectations the Federal Reserve will slow its economic stimulus program by the end of the year pushed mortgage rates higher last week, sapping demand from potential home buyers, data from an industry group showed on Wednesday."

Is there anything loan officers can do in a time like this? The answer is YES, online mortgage marketing! Buyers need to feel a sense of certainty when looking to purchase a new home. The roller coaster of mortgage rates is not providing the best arena for new home buyers, because the rates are constantly up and down, giving a sense of uncertainty and discomfort to buyers. My Rate Mailer keeps your clients in the know, providing them with the rates you offer first and foremost. By providing your clients with your rates as soon as they change, keeps clients informed and feeling valued. Don't let your client get caught up in the latest mortgage news headlines, the constant ups and downs, provide them with YOUR rate first, keep them informed and feeling a sense of comfort when purchasing a new home.


Reuters - Rise in mortgage rates cuts into home buyer demand

Rates measured by the Mortgage Bankers Association jumped to the highest level since July 2011, which also cut into refinance activity. The share of refinance applications fell to the lowest level in more than two years.

Interest rates on fixed 30-year mortgage surged 12 basis points to average 4.58 percent in the week ended June 28, the MBA said.

"At these rates, many fewer homeowners have an incentive to refinance," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

"Purchase application volume also declined, but not nearly to the same extent, as affordability remains strong."

However, a separate report from mortgage financier Freddie Mac, covering the week ending July 3, showed average rates for 30-year mortgages heading slightly lower. Market concern about an early reduction of Fed stimulus eased somewhat during the period, an economist said.

Rates have been rising since early May, with the increase accelerated by comments from Fed Chairman Ben Bernanke last month that the central bank expects to wind down the pace of its quantitative easing program later this year if the economy improves as expected.

The Fed has been buying $85 billion a month in bonds and mortgage-backed assets to keep borrowing costs low and stimulate economic growth. The historically low mortgage rates have helped lure in buyers as the housing market gets back on its feet.

The recent higher cost of mortgages has raised concerns that the increase could dampen demand and slow the housing recovery, though most economists do not expect it to be derailed. Even with the increase, rates remain historically low.

While the rise in rates had appeared to cause some potential buyers to get into the market earlier in June, MBA's seasonally adjusted index of loan requests for home purchases decreased 3.1 percent last week.

Refinancing activity was hit much harder and the index tumbled 15.6 percent last week. The refinance share of total mortgage activity slumped to 64 percent of applications from 67 percent the week before. It was the lowest level since May 2011.

The overall index of mortgage application activity, which includes both refinancing and home purchase demand, slid 11.7 percent.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

The Freddie Mac report showed average 30-year fixed rate mortgages for the week ending July 3 falling to 4.29 percent from 4.46 percent last week. At this time last year the rate averaged 3.62 percent.

The Primary Mortgage Market Survey also showed that the 15-year fixed-rate mortgage averaged 3.39 percent this week, down from last week's average of 3.50 percent.

"Fixed mortgage rates fell over the holiday week as market concerns over the timing of the Federal Reserve's pullback in bond purchases eased somewhat," said Frank Nothaft, vice president and chief economist for Freddie Mac.

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