Market Commentary for the Week of Halloween

 

This week brings us the release of six economic reports and two Treasury auctions for the bond market to digest in addition to another FOMC meeting. We have data or other events that are expected to influence mortgage rates set every day except Monday, so we could see plenty of movement in rates this week. The data scheduled this week ranges from moderately to extremely important, so some reports will have a much bigger impact on trading than others. We also need to keep an eye on the stock markets as they can be heavily influential on bond market direction and mortgage rates.

There are two reports scheduled for release Tuesday, starting with the Durable Goods Orders report for September at 8:30 AM ET. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for an increase in new orders of approximately 0.7%. If we see a much larger increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a significantly weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance from forecasts likely will have little impact on Tuesday’s bond trading or mortgage pricing.

October’s Consumer Confidence Index (CCI) will be released at 10:00 AM ET Tuesday. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show an increase in confidence from last month’s 86.0 reading. That would mean that consumers felt better about their own financial and employment situations than last month, indicating they are more likely to make large purchases in the near future. That would be bad news for the bond market because consumer spending makes up a significant part of our economy. Current forecasts are showing a reading of 87.2. The lower the reading, the better the news it is for mortgage rates.

This week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. There really is no possibility of the Fed changing key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indication of a change in Fed sentiment or possible further hints on when they will make their first rate increase. The meeting will adjourn at 2:00 PM ET Wednesday, so look for any reaction to the statement to come during afternoon hours.

The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) will be released at 8:30 AM ET Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the total of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually has the biggest influence on the markets. Current forecasts call for an increase of approximately 3.0% in the GDP, which would mean that the economy grew at a noticeably slower pace than the 2nd quarter’s 4.6% rate. If this report shows a much smaller increase, I am expecting to see the bond market rally and mortgage rates fall. However, a larger than expected rise could lead to a rally in stocks, bond selling and a sizable increase in mortgage pricing Thursday morning.

Friday has the remaining three reports scheduled that may affect mortgage rates. The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET. It is the least important of the day’s three reports. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week. Therefore, it will likely take a large variance from forecasts for this report of have a noticeable influence on mortgage pricing.

September’s Personal Income and Outlays report will also be posted early Friday morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors.

Analysts are expecting to see a 0.3% increase in income and a 0.1% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing.
The week’s last report comes just before 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. This report is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Current forecasts show this index remaining at its preliminary reading of 86.4.
Good news for mortgage rates would be a sizable decline in the index.

This week also has Treasury auctions scheduled the first three days. The only two that have the potential to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand from investors, particularly Wednesday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

Overall, it appears Wednesday or Thursday could be the most active day for mortgage rates and Monday is the best candidate for lightest. The importance of Tuesday and Friday’s reports makes them likely to be active day also, although I suspect the most movement in rates will take place the middle days due to the FOMC meeting and GDP report. With data or other events relevant to mortgage rates scheduled four of the five days, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Mortgage News Roundup - 4 Things You Shouldn't Overlook When Buying a Home

We hope you’re doing well and enjoying the cooler fall weather. In today’s blog, we’ll look at buying and selling a home in different markets, and four things you shouldn’t overlook when buying a home.

4 Things You Shouldn’t Overlook When Buying a Home

Check out the below list of common things buyers overlook so you don’t.

Environmental Factors

Visit your potential neighborhood at varying times in the day and week so you get a true feel of what it’s like to live there. Even if you think you have found a great neighborhood, you will want to see what it is like both on weekdays and weekends, mornings and evenings. If it’s near a school, you can expect a lot of people parking around your home on weekends for soccer and baseball, and occasionally in the evenings when there’s back to school night and other events.

Distance from Where You Need to Go

How close is the grocery store? Will it add an extra thirty minutes to your commute time? If you use public transportation, are there easy stops nearby?

Connectivity

Does your cell phone work where the house is? Despite every cellular company claiming that they’re the best in the nation, there are still dead zones out there. If one company doesn’t work, would you be open to switching service providers? Also, if you like high speed internet, find out who the provider is for that home. If you’re used to fiber, and you’re moving to a cable solution, you may notice the difference.

Extra Costs

Before you make a home purchase, it’s a good idea to do your research and find out how much closing costs will be, how far property taxes will set you back and how much homeowner’s insurance is.

How to Buy a Home in One Market While Selling in Another

Someone being transferred for work or making a major move for personal reasons may end up selling in one market and buying in another. It would be ideal to sell in a seller’s market and buy in a buyer’s market, but that’s not always the case.

Here are some tips for buyers and sellers in any market.

Know before you go

Today, markets vary by state, town, city and even block by block. But most people don’t realize this. So it’s important to start by researching the hyper-local market of the town or neighborhood that interests you. Find a reputable real estate agent that is an expert in the neighborhood.

How to sell in a buyers’ market

If you need to sell in a buyers’ market, put your best foot forward from the start. Make sure your home is priced to sell.

How to buy in a buyers’ market

Take your time to see as many homes as possible to get the lay of the land. Focus on the most motivated sellers, as this is where you may uncover the best values.

How to sell in a sellers’ market

If you have the luxury of receiving multiple offers, focus on the best buyer and the best terms and not so much on the bottom line. You want the buyer who is going to close.

How to buy in a sellers’ market

When competing with other buyers, have your inspections and do as much due diligence as you can before making an offer. An offer with swift, few or no contingencies and a good price will often get the house.

Safety Tips for Open Houses

Whether you’re a Realtor or you’re a homeowner wanting to sell your own home, it’s important to be aware of your safety, and protect your property and identity as you go through the sales process. It’s easier to keep track of one or two people when you’re showing the home, but it can be difficult if you have more people wandering around. Although, you need to be careful of two people separating as one could be trying to distract you while the other is stealing items. Obviously not everyone is going to be a criminal, and it’s good practice to treat everyone with certain rules that they need to follow.

Open House Preparation

1. Park your car in a safe place. Make sure there’s no bushes near it, and ensure that no one can block you easily from leaving.
2. Make sure your wallet or purse are locked in your car.
3. Keep your cell phone with you in case you need to call the police. And make sure the battery is fully charged. Consider adding in the police department to your speed dials.
4. Ask the homeowner to remove or lock up any prescriptions and jewelry. Hiding it won’t be sufficient since professionals know where to look.
5. Remove kitchen knives, baseball bats, etc. Anything that can be used as a weapon against you should not be there.
6. Ensure that someone else is there with you during the open house.
7. Line up a few more friends who can show up if it gets really busy. They can just pretend to be looking around as well so it’s unobtrusive.

During the Open House

1. While you don’t want to hover, ensure that all guests are visible to you or your partner at all times.
2. Be firm in having people sign in with addresses, phone numbers, and email addresses.
3. If you give a tour, stay behind the visitor and point out where things are.
4. Don’t let yourself get trapped. Stay near the doorway, and do not go with them into the attic or basement area. Also, do not go in walk-in closets, bathrooms and laundry rooms.
5. Be especially aware of what’s going on, and who is around near the end of the open house. That is when the thieves usually arrive, and have one person do the distractions while the rest steal what they can.
6. Trust your instinct. If you feel uncomfortable around someone, engage them in conversation to find out more about them. Most thieves will get uncomfortable and leave.
7. Do not assume that everyone has left once the open house is complete. Do a complete walk through and look in closets, in the backyard, under the beds, etc.
8. Let the homeowner know when the open house is finished so they can return their items and do a quick walk through to verify that everything is there.

Showing the House

If you are just showing the house, but it’s not an open house, there are similar suggestions such as letting the visitor lead and not getting trapped. You’ve already gotten their personal information, and your office should know where you are. If you feel uncomfortable at any time, you can pretend to get a text message and state that another Realtor is on their way with clients, and you need to wrap it up.

Remember, crimes against Realtors can happen to men as well as women. Your safety and well being are more important than any items.

And you can read some of our prior posts on Realtor Safety:

1. Realtor Safety: New Clients

2. Touring Properties with Strangers

3. Marketing and Personal Information

Big Or Small: Which Size Home Is Best For You?

Written by Phoebe Chongchua

This can be a tricky question to answer. Partly because our needs change over the years and decades. After kids leave home, maybe smaller is better but prior to that, maybe a bigger home is what you’re seeking–room for the kids, dog, and tons of the kids’ sleepover friends.

The trends reflect our indecisiveness, too. Sometimes McMansions are on the rise and then there’s the complete opposite: tiny, tiny homes. In fact, you can watch fascinating shows online about families of four with a couple of dogs, moving into these tiny well-designed homes or homes on wheels.

While that small may be far too small, size is a big consideration. It’s also something you should think about before you go house-hunting for that perfect home.

Of course,while there are many personal reasons involved in choosing which size home is the best fit, there are also some very important considerations that can help you decide.

Here are few things to help you weigh your options.

The bigger the home, usually the higher the mortgage.

You pay for what you get. It’s likely the mortgage payments will be more. However, a smaller home with more amenities is sometimes not that far off in price from a larger home that gives you a bit more square footage.

Think about if you are planning to stay in the home a long time.

If so, getting a bit more square footage now might be better than having to move again in a short period of time when you may outgrow the home.

Decide how much home you’re willing to maintain.

For instance, do you want the responsibility of a big back yard or do you want to have something in a planned development, such as a town home, where there is limited yard space to decorate and maintain. That reduced yard size can give you a lot more freedom and leave you with more money in your bank account as opposed to paying for landscaping maintenance.

Do you work from home or might you someday?

This is a really important these days as more and more people are working from home and setting up desk space on the dining room table is not optimal. If you think you might be working from home someday, look for a home that will have enough space for you to work, even it it’s just a screened-off nook somewhere in the house. No doubt, you’ll find a good use for the space, whether or not you actually work from home

If you want a bigger home but aren’t sure you can afford it, consider your options. Can you get a roommate? Increase your income? Decrease your debt? Or maybe you can wait a little bit longer and save more to get into the home you really want.

The important thing is to think about the size and style of home you want before you start your house-hunting. This will help you target homes that are most suitable for your needs. Be sure to consult with experts to get the best advice and find out how much home you can really afford.

Market Commentary for the Week of October 20th

This week brings us the release of four pieces of economic data that are likely to affect mortgage rates. Only one is considered to be very important and even it fails to move the markets or mortgage pricing many months. But was we saw multiple days last week, we don’t necessarily need to have key data being posted to have havoc in the markets.

The National Association of Realtors will start the week’s activities with the release September’s Existing Home Sales data late Tuesday morning. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show an increase in sales from August to September, meaning the housing sector strengthened. That would be bad news for the bond market since a strengthening housing sector makes broader economic growth more likely and bonds less appealing to investors.

September’s Consumer Price Index (CPI) will be posted Wednesday at 8:30 AM ET. It measures inflationary pressures at the very important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see no change in the overall index and an increase of 0.2% in the core data. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

Thursday also has a single monthly report scheduled that is worth watching. September’s Leading Economic Indicators (LEI) will be released by the Conference Board at 10:00 AM ET Thursday morning. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.6% from August’s reading. This would indicate that economic activity is likely to increase over the next couple of months. That would be relatively bad news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a decline though.

The final report of the week is September’s New Home Sales at 10:00 AM ET Friday. This data covers the small percentage of home sales that Tuesday’s Existing Home Sales report didn’t include. It is expected to show a decline in sales of newly constructed homes, but regardless of its results I am not expecting it to have a significant impact on mortgage rates Friday.

Overall, Wednesday has the most important report but unless it shows some significantly strong or weak results, it should only have a minor impact on this week’s rates. Monday is the only day with nothing scheduled, so by default we can label it the best candidate for calmest day. However, if we see last week’s volatility carry into this week’s trading, all bets are off as any day could be extremely active for bonds and mortgage pricing. After what we saw last week, it would be extremely prudent to maintain contact with your mortgage professional if still floating an interest rate.

Modern and Contemporary Architecture

Contemporary Architecture

Is there anything more confusing then wondering if something is modern or contemporary? Literally, contemporary means that which is being built right now. But the design esthetic is one looking forward and applying materials and designs in new and interesting ways.

Modern is a broader sense for homes that embraced the new industrial age with an minimal ornamentation, included structures of steel or concrete and large expanses of glass, and opted for open floor plans. We saw a version of this with the Eichler homes. Often, “modern” will get renamed to be “postmodern” or “neo-Classical,” etc.

Contemporary will often build upon Modern. Often, modern architecture was whitewashed over stucco. Contemporary will use metal or wood planks to act as siding, or paint with greys or adobe.

The bottom line is that there is no easy answer.

From Wikipedia:

The concept of modernism is a central theme in these efforts. Gaining popularity after the Second World War, architectural modernism was adopted by many influential architects and architectural educators, and continues as a dominant architectural style for institutional and corporate buildings into the 21st century. Modernism eventually generated reactions, most notably Postmodernism which sought to preserve pre-modern elements, while Neomodernism emerged as a reaction to Postmodernism.
Notable architects important to the history and development of the modernist movement include Le Corbusier, Ludwig Mies van der Rohe, Walter Gropius, Frank Lloyd Wright, Louis Sullivan, Oscar Niemeyer and Alvar Aalto.

The good news is that most modern homes were built to last if they were built prior to the 1960s.

Zillow notes that the common design elements of a modern or contemporary home are:

Following World War II, America experienced a boom in growth and innovation. Rather than seeking to reinvent home styles of previous years, architects were building sleek homes and experimenting with new shapes and materials. The development of post-and-beam construction allowed for exterior walls of glass and open floor plans.
Although many homes combine a mixture of architecture styles, there are few defining features of a true mid-century modern or contemporary home:

• low, over-sized flat roofs
• open-beamed ceilings
• open floor plans
• extensive, large windows and/or exterior glass walls
• simple, clean lines

We may see a resurgence of these modern design elements thanks to the popularity of AMC’s show Mad Men.

Clare from Projectphile put together a blog making fun of how poorly modern architecture would do in today’s safety conscious world. Hopefully it will bring back some memories of when you were a child.

What modern and contemporary design elements do you like?

Mortgage News Roundup - Must-Have Documents When Applying for a Mortgage

Can you believe we’re mid-way through October and two weeks away from Halloween? Do you buy your candy early or at the last minute so you don’t get tempted to eat it?

Real Estate Agents Get Creative In Drought Conditions

We all are aware of the severe drought in California. There are signs everywhere advocating people to let their lawns dry out. “Brown is the New Green.” But does that work when selling a property? Will potential buyers see that the homeowner is being a wise conservationist or will they see something that looks like a foreclosed home?

There was the incident in California where a homeowner was letting his grass go brown and he was slapped with a fine by his homeowner’s association. Well, good news. A law was quickly signed banning HOAs from fining homeowners who have brown lawns.

But are buyers really open minded?

Some real estate agents are using fake turf to make the grass look green. Others are recommending investing in some re-landscaping using xeriscaping techniques. This could increase the worth of the home considerably.

A fun idea could be to put a sign out that you’re intentionally saving water by letting the grass die out.

Must-Have Documents When Applying for a Mortgage

Trulia posted this nice reminder for what documents you will need when applying for a mortgage. That also includes getting pre-approved. Talk with your loan officer what is required for pre-qualifications. And this isn’t the be all, end all. You may be rquired to provide additional documentation depending upon your personal situation.

Tax Returns: The lender wants to be reasonably sure that your paycheck is high enough to allow you to meet the mortgage payments every month. They feel more confident if your salary has been relatively stable for the past few years. If you’re self-employed, you may need additional documentation to prove consistent income.

Pay Stubs: The tax returns prove what you income was last year and the year before, but your recent pay stubs tell the lender that you’re still earning the same amount or more.

Other Proof of Income: This can cover a wide variety of income including child support, structured settlements, or have another source of income that isn’t through an employer 1099 forms, copies of checks, and bank statements showing direct deposits all help to show the bank your income is reliable.

Employment Letters: A letter from your employer confirming your hire date, current employment status and salary as well as any time taken off for family or medical needs.

Proof of Funds: The lender will want to verify that you have the money to cover the down payment and closing costs. They also want to know that you won’t be totally broke after the purchase, and that you have the money to weather a reasonable emergency. So you will want to print out recent statements from your banks, credit unions and investment companies. If you’ve recently received a big check recently, such as a gift from your family to help with a down payment, the lender may require you to supply a letter from the person who gave you the money explaining that it’s a gift and you won’t be required to pay it back.

Photo ID: A copy of your driver’s license is usually sufficient but your Costco membership card probably won’t be.

Real Estate Agent Safety: Touring Properties with Strangers

For the third installment of our real estate agent safety series, today’s focus is on showing properties alone. This is standard practice for Realtors, but things can go very, very wrong. It is important to remember that safety precautions could one day save your life.

Showing a property alone

THE RISK: You’re touring vacant properties with strangers.

SAFETY TIPS:

• Use the buddy system.

There’s always strength in numbers. Whether you bring a coworker, spouse, or even your German shepherd, avoid going alone.

• Don’t go into confined places.

Avoid basements and attics — it’s too easy to become trapped. Instead, know the selling points of these rooms and remain in the foyer on the first floor with the front door open as the buyer tours these areas, an agent suggests. If you must join them in each room, always stay by the door, leaving doors open so you can flee more easily if necessary, the Washington Real Estate Safety Council suggests.

• Walk behind.

Let potential buyers take the lead when exploring a home, with you always following behind.

• Let others know where you are.

Tell them where you are going, when you will be back, and who you’re with. Better yet: Share this information while the client is with you so they know someone else knows where you are.

• Have an excuse.

If you feel uncomfortable, tell the person your “cell phone or beeper went off and I have to call the office” or “another agent with buyers is on his way,” suggests the Washington Real Estate Safety Council in their tip sheets. Read agents’ personal stories of getting out of a situation like this.

What You Need To Do To Your House Before Fall

Written by Jaymi Naciri

As summer fades out and the first hints of fall arrive, thoughts start to turn to boots and sweaters and parkas and snowball fights. But before we start changing out our wardrobe and preparing for snowfall, there are a few things we should do to our home.

Air leaks throughout house

Air leaks are one of the primary sources for energy loss in a home, and energy loss means money loss. There are steps you can take to check for and eliminate them. “When checking your home windows and doors for air leaks, start with a detailed visual inspection from both the interior and exterior of your home,” said Lifehacker. “On the outside you should look for areas where the old caulking has failed, revealing the gap between the window or door frame and your home’s siding.”

They also recommend “inspecting the threshold under each door, looking for daylight or other obvious signs of an opening that is too big and needs to be sealed shut, making sure that the weather stripping around the windows and doors is in good condition, and checking old single-paned windows for damaged glazing, which can make the home “vulnerable to expensive heat loss.”

Once you’ve discovered the air leaks in your home, you can set about sealing them up. “More often than not, a fresh layer of exterior-grade caulking will adequately seal shut any gap or crack that is causing you problems. New weatherstripping or an adjustable threshold can help to seal shut the gaps around your home’s doors.”

Roof check

Summer storms caused problems in areas throughout the country, and in many cities, no roof was spared. If you have yet to have yours checked out, you may want to do so before winter comes and brings snow with it. A call to your insurance company should produce a free visit to come check its condition.

Filters


If it’s been awhile, you’ll want to do a check of your filters throughout the house to make sure they are clean so air can flow through them smoothly. “According to Energystar.gov, the filters on your home system likely need to be changed either once a month or once every three months, depending on the type you’re using,” said Allstate. “You should check the product information on the filters for the manufacturer’s suggested frequency of change. Depending on where you live, the time of year, and how much you’re using your AC or furnace, you may end up having to change your air filter more frequently. For instance, during a steamy summer when you’re running your system constantly, you may end up having to change the filter more often than if the weather is nice and you’re relying on open windows.”

Smoke detectors

It’s also time to change out the batteries in your smoke detectors. While you’re at it, check and clean out your dryer vent at the same time, clearing any buildup of lint since this can cause a fire.

Fireplace


Now to the place where you actually want a fire in the winter. To keep it safe, you’ll want to inspect this area as well. Woodburning fireplaces need to be cleaned because of the potential for buildup of soot and creosote. Gas fireplaces should also be checked for debris and to make sure the chimney structure is secure with no cracks or crumbling mortar joints.

Once you’ve checked off this list, your home should be in good shape to get you through another fall and winter.

Market Commentary for the Week of October 13th - Columbus Day

This week brings us the release of six economic reports for the markets to digest over four trading days. The bond market is closed today in observance of the Columbus Day holiday as are most banks, so there will not be an update to this report today. The stock markets will be open for trading though. This means that the lenders that are open for business will likely not be issuing new rates Monday, opting to use Friday’s pricing or not accepting new rate locks. The bond market will reopen for regular trading tomorrow morning.

September’s Retail Sales report will start off this week’s calendar early Wednesday morning. It measures consumer level sales and is very important to the markets because consumer spending makes up over two-thirds of the U.S. economy. If consumer level spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop Wednesday. Current forecasts are calling for a 0.1% decline in sales. Good news for the bond market and mortgage pricing would be a larger decline.

Also set for release at 8:30 AM ET Wednesday is September’s Producer Price Index (PPI). This index measures inflationary pressures at the manufacturing level of the economy and is also considered to be highly important to the bond market. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.1% in the more important core data reading. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

Wednesday’s final relevant report is the Federal Reserve’s Beige Book, which is named simply after the color of its cover. This report details economic conditions throughout the U.S. by Federal Reserve region. It is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. If it shows surprisingly softer economic activity since the last report, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing or rapidly expanding economic activity in many regions, we could see mortgage rates revise higher Wednesday afternoon.

Thursday’s only monthly data is September’s Industrial Production data at 9:15 AM ET, giving us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.4% increase in output from August’s level, meaning that manufacturing activity rose. A larger than expected increase in production would be negative for bonds and mortgage rates as it would indicate economic strength. A decline in output would be favorable for mortgage shoppers.

Friday has the two remaining reports. September’s Housing Starts will be released at 8:30 AM ET. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand by tracking construction starts of new homes, but is usually considered to be of low importance to the financial and mortgage markets. It is expected to show an increase in new home starts between August and September. I believe we need to see a significant surprise in this data for it to have an impact on Friday’s mortgage rates.

The last release of the week will be posted by the University of Michigan late Friday morning. Their Index of Consumer Sentiment for October will give us an indication of consumer confidence, which helps us measure consumers’ willingness to spend. If consumer confidence in their own financial situations is rising, they are more apt to make large purchases. But, if they are growing more concerned about their job security or finances, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 84.0, which would mean confidence slipped from September’s level of 84.6. That would be considered favorable news for bonds and mortgage rates because waning consumer spending translates into slower economic growth.

Overall, it appears Wednesday is an easy label for the most important day of the week. Tuesday could be the calmest but following a three day weekend in bonds we still may see some movement in rates. In addition to the economic data, there are many companies posting earning reports during the week, including some big names such as Citigroup, GE and Intel. If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

Living In A Ranch Style Home

The ranch architectural style is also known as California ranch, rambler, American ranch or rancher. It’s as American as apple pie and Chevrolet.

The style is known for its long, close-to-the-ground profile, and minimal use of exterior and interior decoration. The houses fuse modernist ideas and styles with the idea of a work ranches creating a very informal and casual living style.

They were first built in the 1920 but took off after World War II housing boom from approximately the 1940s through the 1970s. When people thought of tract homes, they usually meant ranchers.

The roots of the architecture were Spanish Colonial with a single floor, simple styling and using native materials. Roofs were low and simple, and usually had wide eaves to help shade the windows from the Southwestern heat (or Southern California). Buildings often had interior courtyards which were surrounded by a U shaped floor plan. Often the California homes would have pools in the back. Large front porches were also common.

Common Features

All ranch homes have some of these, but few have all. In typical tract home style, these houses were varied in certain areas but consistent in others. If you ever lived in a tract, you’d understand immediately. Often, the homes would vary by placement of the front door or garage.

• Single story
• Long, low roofline
• Asymmetrical rectangular, L-shaped, or U-shaped design
• Simple, open floor plans
• Living areas separate from the bedroom(s) area
• Attached garage
• Sliding glass doors opening onto a patio
• Large windows, often decorated with shutters
• Vaulted ceilings with exposed beams
• Exteriors of stucco, brick and wood and glass
• Large overhanging eaves
• Cross-gabled, side-gabled or hip roof
• Simple and/or rustic interior and exterior trim

And because architecture styles evolve over time, a two-story ranch was created, but it didn’t have the standard second floor. Instead, the second level would be slightly elevated and to the side and the architecture was a split-level. These were often built into hills.

Commercial Buildings

Another interesting phenomenon that came out of the ranch style were strip-malls. Someone decided to use the open and elongated style to have drive-up malls rather then the standard enclosed malls with parking structures. They fit in well with the tract subdivisions. And people liked being able to go to the store they needed directly rather than having to park and walk. Supermarkets quickly followed. They commonly used the residential style with simple rustic trim, stucco or board and batten siding, exposed brick and shake roofs, and large windows.

The Decline

By the late 1970s, the ranch house was no longer the home of choice, and had been eclipsed by the neo-eclectic styles of the late 20th century. Very late custom ranch homes of the later 1970s begin to exhibit features of the neo-eclectics, such as dramatically elevated rooflines, grand entryways, and traditional detailing. These neo-eclectic homes typically continue many of the lifestyle interior features of the ranch house, such as open floor plans, attached garages, eat-in kitchens, and built-in patios. The neo-eclectic left behind the casual feel of the ranch in place of a more formal atmosphere.

The Revival

There’s been a great renewed interest in ranch homes over the last fifteen years. People aren’t building new ones but looking at remodeling existing ones. Younger house buyers find that ranch houses are affordable entry level homes in many markets, and the single story living of the house attracts older buyers looking for a house they can navigate easily as they age. Additionally, there will always be people attracted to a more casual atmosphere rather than the more formal ones of the neo-eclectic.

And yes, Eichler’s are a branch of ranch homes.

Did you grow up in a subdivision of tract homes?

Mortgage News Roundup - Don't Rake Your Leaves

Good news if you’re looking into getting a mortgage. Interest rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgages at 3.96 percent, down from 4.08 percent at this same time last week.

The 30-year fixed mortgage rate spiked to 4.30 percent on Wednesday, then hovered around 4.06 percent for most of the week before falling to the current rate.

The other good news is that while home prices are still increasing, the rate of increase has slowed down helping to improve affordability for would-be buyers.

Prices rose 6.4 percent in August compared with a year ago, Real estate data provider CoreLogic said Tuesday. That marks a decline from an annual gain of 6.8 percent in July. Home prices had been rising as much as 12 percent yearly toward the end of last year.

Prices rose 0.3 percent in August from July. But CoreLogic’s monthly figures aren’t adjusted for seasonality, such as buying that occurs in warm weather.

If you have any questions, contact an experienced loan officer. They will be happy to discuss your financial situation, and identify a plan for finding you a mortgage.

Don’t Rake Your Leaves

Yes, believe it or not, you don’t need to rake your leaves. Raking leaves wastes your energy and your community’s, which spends lots of tax dollars collecting and disposing of leaves each fall.

Instead of raking, U.S. communities are asking residents to mulch leaves in place. Mulching is easy. You can run the regular lawnmower over the leaves a few times or look into a special mulching mower. Once the leaves are pulverized, they’ll decompose, sink into and nourish your lawn.

Homeowners also can collect the shredded leaves in mower grass catchers, then scatter them around trees and flower beds as mulch, or add them to their compost pile.

Mulching also reduces the amount of water you need to use when watering your plants thus saving you money as well.

New financing deals are making solar more affordable for homeowners

Have you been thinking about switching to solar panels for your electricity?

A new financing offering could make home solar cheaper and more attractive to homeowners, and keep the adoption of home solar growing.

The offer, announced by SolarCity this week, is a loan that allows homeowners to install their own solar system on their roof for little or no money down, and pay less for electricity. Previous plans, while popular, turned off some because the solar company owned the system.

For the deals to work, your roof can’t be shrouded in shade and you have to be paying a relatively high price for power.

Your state also has to allow you to trade the solar power you generate but don’t use for the power you need at night or when the sun isn’t shining.

Have you been looking into switching?

Real Estate Agent Safety: Marketing and Personal Information

Don’t set yourself up to be victimized because of excess personal information in your marketing.
Flashy personal marketing can be a great tool, but beware of the information you include in these materials. Some predators target real estate agents, especially females, they find through the agent’s marketing.

THE RISK: Marketing materials that contain photos of yourself may attract the attention of criminals. Police have found criminals circling real estate professionals’ photos in newspapers and marketing materials (Read one agent’s account of this.)

SAFETY TIPS

• Avoid provocative photos in your marketing. Low-cut blouses, full-body photos, and looking over your shoulder in a sexy pose can send the wrong message to criminals. “Why do you have to have photos anyway? What are you selling?” asks one Realtor, who advises against ever using a photo for business reasons; she uses a caricature.

“You make a living meeting complete strangers in empty houses. They see your photo and if you’re exactly what they’re looking for — whether that be an older or younger agent, blonde hair, blue eyes, whatever — they know all it takes is one phone call to meet you in a house. A picture can be dangerous.”

• Watch what you wear. Only wear shoes that you can run in. Avoid short skirts, low-cut tops, and expensive jewelry. “Predators don’t have the same boundaries as you do. They look at you like that and say ‘She’s asking for it,’” according to a personal safety expert.

• Protect your personal information. Use your cell phone number and office address in your marketing so it can’t be tracked back to your home address. Never use your home address or home phone number. Also, don’t reveal to your client personal information about your children, where you live, and who you live with — you can still build a relationship with clients without revealing all of your personal information, recommends the Washington Real Estate Safety Council.

How to Compare Homeowner Insurance Companies

Home insurance is as unique as the property it protects. You’ll be surprised what you learn when you comparison shop. It’s the best way to find a policy you can afford that gives you the most protection for your money.

Start shopping for homeowner’s insurance as soon as you sign the purchase contract so you’re not stuck if the insurance carrier you choose refuses to insure your home. Some insurance carriers, for example, won’t insure homes that are built on slopes or have shake roofs or antiquated electrical systems

Compare statewide costs

Insurance companies are regulated by the state. Step one should be to visit California’s Department of Insurance website to learn the typical cost of home insurance in different areas of your state. The site should also provide a rating for each home insurance company licensed to conduct business in your state, as well as any consumer complaints lodged against the insurance company.

Do a company health check

Investigate home insurance companies you’re considering via ratings on such websites as those of the National Association of Insurance Commissioners, J.D. Power, A.M. Best and Weiss Research. These sites track consumer complaints against the companies as well as general customer feedback, the processing of claims and other data. In some instances, these websites also rate a home insurance company’s financial health to determine whether the company is able to pay out policies in the event you need to file a claim. An A rating or higher from Standard & Poor’s or an AA ranking or better from Moody’s Investor Service is a good indicator of strength.

You can also research through sites like Consumer Reports.

What do you need and who do you know

Who do you already do business with? If you’re happy with your auto insurance, find out if they do homeowner’s.

They may have worksheets to help you figure out how much insurance you will need since every home is unique. To ensure you find the right coverage for your property, list characteristics and specifics such as jewelry, art and anything unique that you want covered. You’ll also want to note whether the property is a vacation or second home, if it’s located in an area prone to natural disasters, if you have a pool or separate structures such as sheds that you want covered, how many chimney’s, any additional brickwork, and the type of foundation.

Then, you will want to figure how much you want for a deductible.

Finally, you’ll need to ask yourself if you want your insurance to be replacement cost or cash value. You’ll want to talk to the insurance agent about the benefits of both.

Get multiple quotes

Request quotes from at least four carriers. Companies like State Farm and USAA that deal directly with consumers without using independent agents are called “direct writers.” In theory, they can pass on their savings by eliminating the middleman. So it’s useful to get multiple quotes from a variety of companies to identify things you may not have known were possible with homeowner’s insurance.

Don’t look solely at price. “No two insurers use the same policy forms and endorsements, and policy wording can be very different,” says Noah J. Bank, a licensed insurance broker with The B & G Group in Plainview, N.Y. “Even when you think you’re comparing apples to apples, there’s usually more to it, so you need to compare at coverages and limits.”

Be sure you understand what each policy you’re considering truly covers as well as what limits or exclusions are attached to it.

Independent Agents vs. Captive Agents

Look beyond traditional “captive” insurance agents who work for just one home insurance company. Working with an independent agent or broker who works with multiple insurers lets you compare price, coverage, etc., at multiple companies to see which one works best for you.

Make sure you talk to a Real Person and they’re fine when you ask lots of questions.

Will they be there when you have a claim?

No discount in the world will make up for the annoyance and inconvenience of slow claim processing so make sure you know how well their customer service is.

Are Service Plans and Home Warranties Worth the Cost?

Written by Blanche Evans

Extended warranties, or service plans, offer consumers longer terms of coverage on service, repair and replacement for their home’s appliances than the standard out-of-the-box warranty from the manufacturer.

These warranties are highly profitable for retailers, as they deliver 50% profit, but they also run up the total cost of your washer, dryer, or or refrigerator by as much as $118, according to Consumer Reports.

Are service plans actually worth it? You can argue the benefits both ways.

In the fast-paced world of home electronics, future technology will far outclass today’s products by the time the extended warranty expires. Digitaltrends.com states that household electronics have seen great improvements in product reliability, making the price of most extended warranties about the same as a repair bill. The same is true with most appliances today too.

Consumer Reports data concludes that products “usually don’t break during the two-to-three-year period after the manufacturer’s warranty expires and the service plan is in effect.” And if they do break, the repairs, on average cost only $16 more than the service plan. Most defects will reveal themselves within the first year of use, while the manufacturer’s warranty is still good.

If you’re tempted to buy a service plan, follow this rule — the cost of the warranty should be no more than 10% of the purchase price. That said, extended warranties should be purchased for some items, including those that are difficult to repair or high-priced items that would be painful to replace.

Or you could buy a home warranty for about $500. Explains Amy Hoak, correspondent for MarketWatch, “A home warranty is a service contract that commonly covers the repair or replacement of your home’s appliances and systems, including your heating and air conditioning systems.”

No matter which appliance breaks, you make one call and the service plan call center dispatches the appropriate repairperson. The problem is that service providers pay for these leads, which means they make less money, so be prepared to be upsold to a “cleaning” or more expensive repairs.

In addition to the annual fee, you’ll also pay a $60-$75 service fee when a contractor is dispatched to your home.

Home Warranties are ideal for rental properties and as incentives for homebuyers, and they come in handy when multiple appliances break down, saving an average repair bill of $840 or a replacement at an average of $1,200, says Hoak.

Ultimately the choice and risk are yours to assume. Extended warranties or home warranties can be worth the cost in terms of peace of mind, but only if it’s for a product you don’t intend to change for a few years.

And if you decide to skip the warranty, be prepared to shoulder the cost for assessment (service calls), repair (time in labor plus parts) and shipping.

Consumerreports.org says you shouldn’t have to pay extra to get manufacturers or retailers to stand behind their products, but sometimes, you have to. If you have older products and systems, a home warranty may be your best bet.

Real Estate Agent Safety Tips: New Clients

While new clients are a great thing, it is important to trust your instincts and stay on the safe side when meeting someone for the first time. Real estate agents have been tricked and hurt because they walked into dangerous situations, thinking it was a simple showing of a property to a new client.

THE RISK: Meeting with people you don’t know can put your safety at risk. You don’t know whether this person could potentially be a criminal, stalker, thief, or worse.

SAFETY TIPS

• Meet at the office first. Get them on your territory before you visit any property with them so you can learn more about them and collect personal information about them for your files.

• Ask for identification. The public is used to having their identification checked, so don’t be reluctant to ask because you’re scared you’ll offend someone, Siciliano says. Tell clients it’s company policy that all clients’ driver’s licenses are photocopied. “This will significantly reduce your risk because the bad guys don’t want to give you their I.D. or get their picture taken,” Siciliano says.

• Have all clients fill out a customer identification form. You can find an example of this at REALTOR.org. Click on “Prospect Identification Form” under the Office Safety Forms heading. The form asks for car make and license number, contact information, and employer information, and also requests a photocopy of the driver’s license.

• Introduce them to a coworker. When you meet them at the office, introduce them to at least one other person in your office. Criminals won’t like that others have seen them for identification purposes, according to tip sheets provided by the Washington Real Estate Safety Council.