Colorado Mortgage Presents- The Best And Worst Cities For Commuters (2010 Edition)
According to the Census Bureau, 2.8 million people commute to work 90 minutes or more each day, in each direction.
Now, your daily commute may not be as long, but time spent in cars, trains and buses is time away from work and from family. Drive-time can affect a person’s Quality of Life and it’s one reason why Forbes Magazine’s Best and Worst Commutes is worth reviewing.
Measuring travel time, road congestion and travel delays in the 60 largest metropolitan areas, Forbes ranks city commutes from best-to-worst with Salt Lake City topping the list and Tampa-St. Petersburg finishing it.
The Top 5 Commutes, as compiled by Forbes:
- Salt Lake City, Utah
- Buffalo-Niagara Falls, New York
- Rochester, New York
- Milwaukee-Waukesha-West Allis, Wisconsin
- Albany-Schenectady-Troy, New York
The bottom 5 are Tampa-St. Petersburg, Detroit, Atlanta, Orlando, and Dallas-Forth Worth.
Long commutes shouldn’t deter you from moving to a particular city, but the potential commute should be consideration. Before making an offer on your next home, make a rush-hour commute to work from your potential new neighborhood. Then imagine doing it every day.
You can read the complete Forbes list of Best and Worst Cities for Commuters on its website.
Call Ben For Colorado Mortgage Rate Information.
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Colorado Mortgage Rates This Week : February 16, 2010
Colorado Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.
There wasn’t much hard data on which to trade last week, either, so momentum took markets farther than they otherwise might have moved on their own. It marked the first time in 5 weeks that rates rose for Colorado mortgage rate shoppers.
This week, data returns. Expect mortgage market movement.
Some of the week’s more important releases include:
- Housing Starts and Building Permits (Wednesday)
- The release of the last month’s FOMC Minutes (Wednesday)
- Business and consumer inflation figures (Thursday and Friday)
Inclement weather may have impacted last month’s Housing Starts reading so pay closer attention to Building Permits. Permits precede actual construction and can be more indicative of economic optimism. If permit readings are strong, it should be a negative for mortgage rates.
The same is true for the FOMC Minutes.
Last month’s FOMC post-meeting press-release was decidedly middle-of-the-road, but the statement is just a summary of the Fed’s 2-day meeting, boiled down to a few paragraphs. Wednesday’s release of the FOMC Minutes will reveal the deeper discussions among members of the Fed. Wall Street will mine it for clues about the future of the economy.
If Wall Street senses optimism coming from the Fed — again — mortgage rates should rise.
And, lastly, keep an eye on Thursday and Friday’s inflation data. Inflation is bad for mortgage rates so a higher-than-expected reading should spark a bond market sell-off.
Since mid-December, Colorado mortgage rates have moved within a tight range and there’s little reason for rates will break this range this week. However, we are near the top of the channel. If you know you’re going to need a rate locked soon, it’s probably best to do early in the week.
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How Rising Consumer Sentiment Is Linked To Higher Colorado Mortgage Home Prices
Consumer Sentiment has been on the rise since last February and it’s something to which Colorado home buyers should pay attention.
The affordability of your next home may hinge on consumer confidence.
As the economy recovers from a near-the-brink recession, many of the elements of a full recovery are in place. Business investment is returning, household spending is expanding, and financial systems are gaining strength.
Consumer confidence is at a 2-year high.
What’s missing from the recovery, though, is jobs growth. Another net 20,000 jobs were lost in January. Data like that hinders economic growth.
That said, twenty-thousand jobs lost is a much better figure than the several hundred thousand that were shed per month throughout early-2009, but it’s still a net negative number. Not only does household income drop when Americans lose jobs but so does the average American’s confidence in his or her own economic future.
This is one reason why jobs growth is so closely watched by Wall Street — jobs are linked to higher confidence levels which, in turn, is believed to spur consumer spending.
Consumer spending represents 70% of the U.S. economy.
As confidence rises, it could be good news for the economy, but bad news for home buyers. More spending expands the economy and, all things equal, that leads mortgage rates higher.
Same for Colorado home prices. More confidence means more buyers which, in turn, squeezes the supply-and-demand curve in favor of sellers.
Later this morning, the University of Michigan will release its February Consumer Sentiment survey. If the reading is higher-than-expected, prepare for Colorado mortgage rates to rise and home affordability to worsen.
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Colorado Mortgage In Pictures: The Severity Of The Foreclosure Crisis Depends On Where You Live
Foreclosures stories dominate the national housing news. It seems at least one foreclosure-related story makes its way to the front page or the nightly news every week.
But for as much as the foreclosure filing statistics can be astounding — over 300,000 homes were served last month alone — the prevalence of foreclosures depends on where you live.
As reported by RealtyTrac, just 4 states accounted for more than half of the country’s foreclosure-related activity last month.
- California : 22.7 percent of all activity
- Florida : 14.9 percent of all activity
- Arizona : 6.7 percent of all activity
- Illinois : 5.7 percent of all activity
The other 46 states (and Washington D.C.) claimed the remaining 49.9%.
However, just because foreclosures are concentrated geographically, that doesn’t make them less important to homebuyers in Colorado and around the country. There’s been more than 1.4 million foreclosure filings in the last 12 months and that’s a figure that can’t be ignored.
Distressed properties now play a role in one-third of all home resales.
Therefore, if you’re in the market for a foreclosed home, here’s a few things to keep in mind.
- Properties are usually sold “as-is” and may not be up to living standards. Be sure to physically inspect the home before buying it.
- Buying a home from a bank is rarely as streamlined as buying from an individual Colorado homeowner. Be prepared for delays and long closings.
- Foreclosures aren’t always listed for sale publicly. Ask your real estate agent how to access the complete foreclosure inventory.
In order to use the federal homebuyer tax credit, you must be under contract for a Colorado home mortgage by April 30, 2010 and closed by June 30, 2010. That doesn’t leave much time to find a bank-owned home and make it to closing. If you’re serious about buying foreclosures, it’s probably best to start your search soon.
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Colorado FHA Mortgage Loans Separating Fact From Fiction : Mortgage Insurance Premiums
The Colorado mortgage lending landscape changes a lot. Rates and guidelines are in constant flux, and it creates preparedness challenges for buyers in Aurora that aren’t paying in cash.
The loan you get today won’t always be the loan you get tomorrow.
Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of “what’s coming next”.
Recently, we saw this with respect to Colorado FHA home loans.
January 20, 2010, the FHA issued a press release with new lending guidelines. Specifically, it announced 3 changes that will be effective starting April 5, 2010:
- Upfront mortgage insurance premiums increase from 1.75% to 2.25%
- Allowable seller concession reduced from 6% to 3%
- FICO scores of 580 or lower are subject to a minimum 10% downpayment
But, also in its official statement, the FHA announced it would ask Congress for permission to raise monthly mortgage insurance premiums. This is where the rumors started.
Nestled on page 348 of the Budget of the United States Government, Fiscal Year 2011, in a section titled Special Topics, there is a 1-paragraph notation that details the FHA’s petition.
- Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
- Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing
For now, the request is neither approved nor acknowledged by Congress. It’s merely a request. And in the event that Congress does approves it, that doesn’t mean that FHA has to stand by its initial projections.
Truth is, about the only thing we know about the future of Colorado FHA lending is that, come April 5, 2010, borrowing money is going to be tougher, and more expensive. These are the facts as we know them today.
Homebuyers should plan accordingly.
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What’s Ahead For Colorado Mortgage Rates This Week : February 8, 2010
Colorado Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates in Colorado improved for the 4th consecutive week.
Mortgage rates are now at a 6-week low but probably shouldn’t be. It underscores just how important global events can be to U.S. mortgage markets.
For example, corporate earnings continue to improve and key elements of the economy are strengthening. Even the Federal Reserve acknowledges this. In most circumstances, that would be a boon for the stock markets and bond markets would suffer, including mortgage bonds.
Last week, that wasn’t the case.
Early in the week, as (1) China tightened its monetary policy, (2) Greece did little to quell lingering default fears, and (3) Spain raised its deficit forecasts, global investors sought to reduce their collective risk exposure. For safety of principal, many sold some of their more aggressive positions and moved the cash proceeds into the U.S. bond market — which includes mortgage bonds.
On Wall Street, this type of trading pattern is called a “flight-to-quality”. Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe. Last week’s extra demand for bonds helped to push prices up and mortgage rates down.
And that was before Friday’s weak jobs report. Although the Unemployment Rate fell to 9.7%, the government reported a net loss of 98,000 jobs last month and this, too, helped mortgage rates tick lower.
This week, we’ll hope for momentum to continue.
There’s very little domestic news to move rates this week so keep an eye on the global market for similar stories like what we saw last week. Or, if you’re not sure what to look for, just give me a call or send me an email and I’ll be happy to watch the markets and Colorado mortgage rates for you.
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7 Ways To Protect Your Credit Score For Better Mortgage Rates
As mortgage lenders tighten approval standards in Colorado and nationwide, the importance of a good credit score is rising. Credit scores not only make the difference between a mortgage approval and mortgage turn-down, but they also play a large role in determining your actual mortgage note rate.
In the 3-minute piece, the NBC Today Show talks about 7 ways that homebuyers ruin their credit — often by accident. Some of the highlighted mistakes include:
- Closing open credit cards
- Making appliance buys on credit prior to closing
- Asking creditors to lower credit balances prior to closing
In general, a 740 FICO will insulate a borrower from the higher costs and/or rates associated with low credit scores. Below 740, though, every 20 points adds to the damage. Watch the video and apply what you can to your own situation. The more you know, the more you can save.
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The January 2010 Jobs Report May Lead Colorado Mortgage Rates And Home Prices Higher
On the first Friday of every month, the U.S. government releases its Non-Farm Payrolls data from the month prior. The data is more commonly known as “the jobs report” and it swings a big stick on Wall Street.
Especially now — many analysts believe job growth is tightly linked to the future of the U.S. economy.
Therefore, when January’s jobs report hits the wires at 8:45 AM ET tomorrow, Aurora, Colorado home buyers would do well to pay attention. A net job reading that is much higher (or lower) than Wall Street’s expectations can make a serious change in home affordability.
Wall Street expects that the economy added 13,000 jobs last month. It would mark the second time in 3 months that the jobs report showed a net monthly gain.
In November 2008, the economy added 4,000.
Jobs matter to the economy for a lot of reasons, but one of the biggest is that when Americans are working, Americans are buying and consumer spending accounts for 70 percent of the economy.
Job growth spurs the economy and draws money to the stock market. Unfortunately for rate shoppers, that kind of stock market growth happens at the expense of the bond market which is where Colorado mortgage rates are made.
Good jobs data usually means higher mortgage rates.
Also, job growth can lead to higher home prices. This is because working homeowners are less likely to default on a mortgage versus non-working homeowners. In this way, job growth helps hold foreclosures to a minimum which, in turn, suppresses the housing supply.
Less supply means higher prices for home buyers.
Mortgage rates are idling this morning in advance of tomorrow’s data. If you’re shopping for a mortgage rate, the prudent play may be to lock your rate before the jobs data is released. A jobs figure that’s higher than the 13,000 expected could cause rate to rise sharply.
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Simple Colorado Real Estate Definitions : Short Sale
A “Short Sale” is when a Colorado home seller sells his home for a lesser amount than what is owed on his mortgage, and the mortgage lender agrees to accept the lesser amount in lieu of a full payoff.
By way of example, a Short Sale may be appropriate for a Denver, Colorado home seller whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000. Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.
Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a Colorado mortgage loan. Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.
For this reason, Short Sales are sometimes considered “the economical alternative” to default.
The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start. And sellers should be aware of how a Short Sale on their credit can impact future borrowing.
Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.
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What’s Ahead For Colorado Mortgage Rates This Week : February 1, 2010
In a news-heavy week, Colorado mortgage markets improved last week, adding to a 3-week rally.
But, given last week’s data and domestic story lines, it’s surprising that rates actually fell.
- The Federal Reserve said the economy continues to strengthen
- Consumer Confidence pushed to a 2-year high
- 4th Quarter domestic output exceeded Wall Street’s expectations
Usually, events like these draw money away from the bond markets and into the stock markets and Wall Street preps for better corporate earnings. The movement pressures mortgage rates to rise.
Last week, however, different stories trumped the headlines including a report from Standard & Poor’s that said U.K. banks are no longer counted among the world’s most stable. This research, in particular, triggered a flight-to-quality among investors that pumped the U.S. dollar and sparked new demand for mortgage bonds.
It’s one reason why we ended the week on a rally and it just goes to show how unpredictable mortgage rates can be.
This week figures to be a challenge, too.
First, we start the week with key inflation data. When inflation runs hot, it’s usually bad for mortgage rates. Inflation is expected to be tame, however — a point the Fed made several times in its press release last week. That said, inflation data is closely watched by markets and can make a big impact on rates.
Then, on Wednesday, ADP releases its private sector job report. The ADP data is a precursor to the government’s own Non-Farm Payrolls report which is due to hit Friday. ADP is expected to show a net loss of roughly 85,000 jobs. Depending on where the actual numbers comes in, mortgage rates could wiggle a bit.
If the ADP report shows much fewer than 85,000 jobs lost, expect mortgage rates to rise. The same is true for Friday’s job report. A miss on expectations will cause Denver mortgage rates to ratchet higher.
Since peaking on the last day of December, Colorado mortgage rates took a slow, steady descent through January. They’ve have taken back close to two-thirds of December’s overall losses. This week, rates could fall some more, or they could bounce back up. The most prudent time to lock would be prior to Tuesday’s closing.
After that, the respective jobs reports will take over and rates could go either way with force.
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