Are People Buying Homes?

We have all heard the reports of the slumping housing market. Anyone who is trying to sell a home right now has probably had at least one prospective buyer say something to the effect that it is a buyers market. I have been hesitant to agree that it is a particularly good time to buy a home—or, more accurately, that it is a particularly bad time to sell a home. The truth is that while home sales have decreased, there are still plenty of people buying and selling homes in Utah. With the population increasing, and as new jobs are created on a fairly regular pace, it is not unrealistic to assume that in Utah it is still possible to sell a home.

That being said, a new report released by the Associated Press has me wondering that perhaps the general public is buying into the recession hype. I have spent quite a bit of energy the past few months telling people that there is a bigger problem with public perception which in turns creates a bigger problem for home owners.

Here is some information from the AP to support my claims:

• 43% of those expecting to purchase a home in the near future are considering waiting because of a fear that home prices will decline over the next 2 years.
• 60% of those surveyed nationwide do not expect to buy or sell a home for at least 2 years.
• Nearly 2/3^rd of those surveyed believe it is extremely difficult for someone to purchase their first home.
  

AND FINALLY, here is the information that concerns me the most:

One is Seven Home Owners fear that they will not be able to make their monthly house payments with the next 6 months.

OK, that is a big deal, and here is why: Not making payments leads to foreclosures, which in turn leads to lower sales prices, which, contrary to what many would believe, leads to a slow economy, which, of course, leads us into recession.

Foreclosures are bad news for the economy, and that affects everyone, even those who are making their house payments with ease.

If you or someone you know is worried about making their home payments in the future, please, contact me or another licensed loan officer. We, as a county, cannot afford the foreclosures to continue.

Call me at 801-256-0904 or email me at jayhart@cottonwoodmtg.com

Market Commentaries and Updates

Many of the Lenders and Investor I use have started offering “market updates” on the bottom of their rate sheets. Here are some snippets from this morning that might be worth considering:

First, from a large regional lender:

This will be a busy week for economic reports being released. This morning, retail sales in March were reported as being slightly better than economists had forecast. Later in the week we will receive updated reports (PPI & CPI) on how inflation is behaving. Stocks, bonds, and mortgage prices are all trading in a fairly narrow range so far this morning.

Now, from one of the nations largest lenders:

U.S. Treasuries rose after stocks in Europe and Asia fell and as traders speculated a U.S. government report may show retail sales stagnated in March. Two-year yields approached the lowest level since April 1 after Group of Seven finance ministers said the eight-month financial crisis has further to run, helping spur demand for the relative safety of government debt. Yields on benchmark two-year notes declined 4 basis points, or 0.04 percentage point, to 1.71 percent. The market is unchanged to .25 better in discount this morning.

So What?

First off, you can see how mundane much of my job is. Reading too many market commentaries like those I listed above isn’t exactly the most entertaining way to spend your mornings.

As for my take away, there is little to decipher from those messages. First, it is too early in the week to be able to make projections. Second, the yields have changed so slightly that there is really nothing reliable right now to use as indicators.

As of this afternoon the bonds are down, but the yields are slim enough that there is no reason to expect much to happen for the next 24 hours or so.