Mortgage Rates Improve Despite Strong Data

This week's economic data showed higher than expected levels of economic growth and inflation. A weaker dollar has boosted the manufacturing sector and overall economic activity over recent months. Revisions made to second quarter Gross Domestic Product (GDP) showed stronger than expected growth of 3.3%, far above the original reading of 1.9%. Durable Orders and the Chicago PMI national manufacturing index also far exceeded the consensus forecasts. The dollar has risen against other currencies this month and many foreign economies are slowing, so investors expect exports to fall later in the year. Investors seem to have focused on the outlook for lower future readings, rather than this week's unexpectedly strong data, and mortgage rates improved during the week.
The story is similar for inflation. The July Core PCE price index, the Fed's preferred inflation indicator, rose to a 2.4% annual rate. The Fed would like to see this reading drop below 2.0%. With slowing worldwide economic growth and the recent drop in oil prices, many investors believe that this will happen. This week's release of the Fed minutes from the August 5 meeting confirmed that Fed officials expect inflation to moderate as well.
In the housing market, the news was mixed. July Existing Home Sales rose 3%. For several months now, activity levels have held above the recent lows. Inventories of unsold homes climbed to a record high, however. July New Home Sales fell slightly.

Seattle Home Sales Drop

Seattle and Portland were among the top 10 metro areas in the nation with the most pronounced drop in home sales last month compared with July 2007, according to The Associated Press-Re/Max Monthly Housing Report, which analyzed all home sales recorded by all local agents.
By ALEX VEIGA , The Associated Press

DON RYAN / AP
A real-estate-agents trade group says sales of existing homes rose 3.1 percent in July as buyers snapped up deeply discounted properties.

U.S. homebuilders' confidence grows slightly
Real Estate
LOS ANGELES — Homebuilders are a little more optimistic about the prospects for home sales over the next six months, but an index reflecting the sector's confidence overall remained at an all-time low, an industry trade association said this past week.
8/23/2008 seattletimes.com

Existing Home Sales Report 08-25-2008

Existing home sales, including single-family, townhomes, condos and co-ops increased 3.1% in July to an annual rate of 5.0 million units, the NAR reported today. This was the highest level of sales in five months as recent home prices declines brought buyers back into the market. Despite the increase last month, sales remain 13.2% below their year ago rate of 5.76 million. Sales rose strongly in the West and the Northeast, were up slightly in the Midwest and fell slightly in the South. Rising foreclosure rates continue to press inventories higher and prices lower across the country. The inventory of homes available for sale for all housing types rose 3.9% at the end of July to a record high 4.67 million, which represents an 11.2 month-supply at the current sales pace. House prices continue to fall with median home sale prices declining by 7.1% over the past year to $212,400 while average prices fell 8.0% to $254,000. Foreclosures and short sales, which account for more than a third of all sales, are pushing existing home sales modestly higher but are boosting inventories and weighing down prices as well. The outlook for the near term is more of the same with prices moving even lower until demand is sufficient enough to reduce inventories. Also worth noting, it may be awhile before demand returns under tighter credit and soft economic conditions.

FHA Down Payment Assistance Programs - No Longer Eligible

SELLER-FUNDED DPA PROGRAMS NO LONGER ELIGIBLE WITH FHA TRANSACTIONS
As a result of the passage and signing into law of H.R. 3221, the Housing and Economic Recovery Act
of 2008, seller-funded down payment assistance programs (e.g., Nehemiah, AmeriDream, and similar
organizations) are no longer an eligible source of funds for loans insured by the Federal Housing
Administration (FHA).

First-Time Homebuyer Tips

Buying a home can be a complex process, but it doesn't have to be. With a little preparation, you can save a lot of time and hassle by having all of your documents ready when your mortgage professional needs them.To start with, the lender will need personal information to verify employment for you and your co-borrower (if there is one). They will also need information regarding all of your debts and assets.In order to expedite the paperwork process, start gathering the following items:
Most recent paystubs for one month.
W2s from the last two years.
Signed copies of your last two years' tax returns, including all schedules that were filed.
If you are self-employed, a year-to-date profit and loss statement.
Homeowner's insurance company name and number.
Most recent bank statements for two months.
Most recent statements from any retirement and investment accounts for two months.
What costs are involved? Within 3 days of your application, your Loan Officer must provide you with a good faith estimate of closing costs. Along with any down payment, you will have to pay closing costs as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:
Application/Processing Fee – Charged by the loan officer to process your loan application.
Appraisal Fee – Charged by the appraiser to determine the current value of the property.
Closing Fee – Charged by the closing agency (escrow, attorney, title) to ensure the close of your transaction.
Credit Report Fee – Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.
Title Search/Title Insurance Fees – Charged by the title company to ensure the property is free from liens or title defects.
Origination Fee – Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.
Discount Points – Paid to the lender to secure a lower interest rate.
Miscellaneous Fees – VA and FHA loans may have other fees associated with them. Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.
Let us help you evaluate your personal situation and assist you in finding the loan program that works best to meet your individual goals and needs.

First - Time Home Buyer Tax Credits

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and July 1, 2009. To find basic information about the tax credit and to have your questions answered see the following link:

http://www.federalhousingtaxcredit.com/faq.php