With rates going up, many mortgage companies should find themselves in the enviable, or unenviable position depending on your perspective, of being over-staffed. Combine that with the seasonality of the real estate market, where January and February are typically the slowest months of the year, and it makes for the perfect recipe to being able to provide for a fast close of escrow on purchases.
For the month of February, my team averaged 19 days to go from application to final approval and 24 days to go from application to funding.
TRENDING Also- Condo financing coming back!
Supreme Lending is taking a very aggressive approach to Fannie Mae guidelines as it pertains to condo financing. What does it mean for the condo to be “Warrantable”? It means that Fannie Mae has deemed the project is acceptable. Supreme has a condo department where the entire focus is getting projects deemed “warrantable” by Fannie Mae. Typically it only takes 48 hours to get a particular project approved from the time it has all the necessary documents. If your listing or client has been declined by other lenders on condos, call me, we may be able to help!
The Dow Jones rally continues to march on, this Friday, closing at 21,005. The Dow is now up 15% since the election and up 5% in the past 30 days.
The Fannie Mae 3.5 coupon, which is what mortgage rates to the consumer are most closely tied to continues to sell off. When investors sell the instrument, the price of the instrument goes down, and mortgage rate to the consumer goes up. If you look closely at the graph, you can see that it was trading at around 102.5 on February 27th (a Monday) and by Friday, March 3rd, the price dropped to 101.5…This was a 100 basis point drop…This translates loosely to a .25% increase in the 30 year fixed mortgage to the consumer.
My advice has been lock in as soon as possible. My clients that received and accepted offer on Monday that locked in saved themselves .25% in rate by not holding on to hope that rates would get better. I am of the opinion that rates will continue to go up with the occasional “valleys” on the way up…
Southern Nevada Real Estate Related Data
Interesting mortgage volume data as it relates to purchase transactions. There were 36,130 purchase mortgages issued in 2016. This is down from the peak of 80,931 in 2006, but up from the bottom of 24,831 in 2013. 2016 marks the 3rd year in a row where mortgages for purchase transactions increased.
Zillow reported that the median priced home (not to be confused with median priced single family residence which strips out condos and town homes) was $216,400 for the month of January. This is up nearly 10% from January 2016. This makes sense considering the shortage of inventory. It also makes sense that sellers have been looking to get top dollar and we are seeing appraisals come in short. Nationally, the median priced home for January 2017 was $195,300, up over 7% from January 2016.