By Gina Kemsley of Terra Mortgage Banking

Mortgage Bonds are getting a boost today on news that a Debt Ceiling contingency plan is being brought forth by the Treasury Department. This good news is moving rates lower. The Treasury’s plan would guarantee present holders of US debt will receive interest payments on time before the Treasury makes any other payments — even if the debt ceiling is not raised.  As a result The Bond market is sensing the government will do whatever it needs to avoid an outright default – hence the positive rate movement.

INDUSTRY NEWS

On October 1st, the temporary maximum loan limit for conforming (FNMA & FHLMC) mortgages and FHA insured loans is scheduled to drop to a maximum of $625,500 for most Bay Area Counties (Sonoma: $520,950, Napa: $529,950).

As the expiration nears, the market will focus more and more on jumbo financing and we want you to know that Terra Mortgage Banking is one of the few (if only) North Bay Mortgage Bankers who underwrite our own jumbo loans in-house up to $1.5M.  This means your jumbo loan will receive the same expedited service you have come to depend on from Terra for your conforming loans.

Bottom Line: Terra’s expedited closing times give Realtors and their clients a competitive advantage when writing offers. Please contact Gina Kemsley today with questions or helping with getting a loan.

CURRENT INTEREST RATES | JULY 29, 2011

CONFORMING RATES
($200,000 – $417,000) 0 POINT
• 30 Year Fixed: 4.500% (4.58% APR)
• 5/1 ARM: 3.125% (3.20% APR)

JUMBO RATES
($729,751 – $2,000,000) 1 POINT
• 30 Year Fixed: 4.875% (5.02% APR)
• 5/1 ARM: 3.250% (3.39% APR)

CONFORMING (HIGH-BALANCE) RATES
($417,001 – $729,750 cap by county) 0 POINT
• 30 Year Fixed: 4.625% (4.69% APR)
• 5/1 ARM: 3.375% (3.44% APR)

RATE TRENDS
Rates are DOWN compared to last week.
Rates are DOWN compared to last month.
Rates are UP compared to one year ago.

Gina Kemsely, Terra Mortgage Banking can be reached at 415-464-3144 or gkemsley@terramb.com

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Real estate activity has been busy this summer with more homes coming on the market than listed in the spring time. In April there were 1215 homes for sale compared to July with 1572 homes on the market (a 30% increase.) Roughly 30% of the homes are in contract, indicating a balanced or “neutral” market. In neutral markets, typically, interest rates are affordable and the number of buyers and sellers in the marketplace are equalized. The scales don’t tip in either direction, meaning the market is normal without experiencing volatile swings.

Agents have seen an increase in multiple offers and all-cash buyers this summer. When homes are priced competitively or below market value, they sell very quickly, often with multiple offers. If they’re not priced well, they tend to sit on the market for quite some time. However, selling real estate still depends on location, condition of house and price.

Many of my clients ask me, “Have we hit the bottom?” Robert Shiller, MacroMarkets’ chief economist and co-founder, recently said, “A significant majority of our panelists believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year-end. Despite persistent macroeconomic uncertainty and unprecedented housing market dysfunction, almost two-thirds of the panelists see the U.S. residential real estate market as at an historic turning point.”

Although no one can predict the bottom, real estate has picked up significantly this summer which gives us all hope that real estate is improving.

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