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June 12th, 2011

Weekly Recap (06/06/11-06/11/11)



Flipping CalenderSaturday

A natural disaster destroyed my home…What do I do?”

Between the massive flooding, the devastating tornadoes and the wildfires, natural disasters have taken an extreme toll on American homes so far this year, and we’re only halfway through 2011.

“Few states are immune to natural disasters,” writes HSH.com contributing writer Marcie Geffner, “and each event affects thousands of homeowners who are forced to cope with the physical and emotional damage, as well as the prospect of perhaps not being able to manage their mortgage payments.”

Unfortunately, natural disasters don’t guarantee mortgage relief.


We were right about mortgage rates remaining ‘fantastic’

Some two months ago when I blogged about our last Two-month forecast for mortgage rates, this is what I wrote:

…The truth is, if you can qualify for mortgage financing, mortgage rates are expected to remain “fantastic” through the spring. The “bad” news: They’re not expected to remain at unprecedented levels (buyers will have to settle for fantastic).


Two months later, current mortgage rates are “fantastic” to say the least.


Higher mortgage rates would be better

The most recent jobs report has upset Wall Street and caused stock prices to tumble. But was the higher unemployment rate anything but unexpected?

If you keep your eye on the mortgage and real estate markets, then the employment news seemed both logical and predictable. There’s little chance of increasing home sales to any great degree when millions of Americans remain unemployed or underemployed.


HSH.com discusses ARMs and serial refinancers on CNBC

HSH.com VP and resident expert Keith Gumbinger visited CNBC yesterday to discuss the role adjustable-rate mortgages are playing in “serial refinancing.”

Click here to watch the video

Many Americans are taking advantage of the ongoing low-rate environment by refinancing multiple times. This, of course, only tends to happen when mortgage rates are falling, and keep falling.


Yet, what has made this phenomenon of serial refinancing even more pronounced is that more homeowners are seeking to refinance into adjustable-rate products which are currently hovering around 3 percent.


It’s not a double dip; it’s just one long slide

There’s a lot of talk these days about a double dip recession, an idea which is surely puzzling.

In terms of housing, economic data from the Federal Housing Finance Agency shows that real estate prices reached a bottom in the first quarter of 2009, rose and are now headed down again.


So, yes, there’s a factual basis for double-dip claims.

But such charts don’t tell the whole story.


Mortgage rates love slow economic times

The economy continues to exhibit very little forward traction, and we are likely to start the summer with a bit of an economic swoon. Optimism about future growth still remains, but high food, energy and commodity prices have definitely trimmed forward momentum to a considerable degree. For whatever it has contributed to growth, the Federal Reserve’s program of purchasing an additional $600 billion worth of Treasuries comes to a close by month’s end, and that could exacerbate the slowness somewhat.

Mortgage rates, of course, love slow economic times, since that lessens both demand for credit and the potential for inflation. We do have an inflation problem, but it is not yet of the nature which causes overall price spirals; rather, we have the kind which acts like a tax on the economy, putting the brakes on economic growth — and at a time when it is least welcome.

One Response to “Weekly Recap (06/06/11-06/11/11)”

  1. Bob Van Gilder Says: June 12th, 2011 at 3:23 pm

    The worst is yet to come. Sahdow inventory still not on market. Accounting scandals. Increased unemployment rate. Not that having 30 year fixed rates in the 2’s is going to help the masses though.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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