Pending Home Sales Rise in April – Could be a Good Sign for Home Loans
Yesterday, a somewhat unexpected surprise was reported with the pending home sales report for April. Pending home sales surged by 6.7 percent for the month, which represents the largest jump in nearly eight years.
Now, we all know not to get too excited about home sales numbers for one month’s worth of data, but at least it is a positive sign.
The concern is that home sales will continue to increase into the summer, but that prices will continue to go down. Continued high jobless numbers is also a major concern and could be a barrier to any real short-term sales and pricing momentum.
Much of the jump in home sales is being attributed to the $8,000 first time homebuyer tax credit initiated by the Obama administration this past February. Since home purchases need to be completed by November 30 to claim the credit, we could experience better than expected home sales numbers into the summer.
There are still too many variables involved to call a bottom in the US housing market, but the near-term outlook does look better than it did even a few months ago.
How do home sales affect my home refinance plans? Well, home sales affect two major components of a refinance mortgage. Home value and interest rate. Generally speaking, the higher volume of home sales, the more the demand, and eventually the higher the price. This of course affects your home’s “appraised value” which is use to qualify your Loan-to-Value ratio (LTV). A home value difference of as little as $5,000 to $10,000 or so can change your qualified home refinance options significantly for mortgage rates. Also, you may fall into the “above 80 LTV” range and be required to pay monthly mortgage insurance. That relative small home value difference to the downside can result in a rather large increase to your monthly refinanced mortgage payment.
As far as mortgage rates go, a stabilized or increasing value for the housing market makes lenders feel a little bit better about lending funds. Their risk declines and they lower their mortgage-spread premium to remain competitive with all the other lenders that now want to make a more secure profit. So more liberal programs may be offered along with a decrease to offered mortgage rates.
So, even if you don’t care what home sales do because you already own your own home, keep an on the home sales numbers just in case you are considering a home refinance. The better the numbers, the better your deal may become when you are ready to get that new home loan.
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
Now, we all know not to get too excited about home sales numbers for one month’s worth of data, but at least it is a positive sign.
The concern is that home sales will continue to increase into the summer, but that prices will continue to go down. Continued high jobless numbers is also a major concern and could be a barrier to any real short-term sales and pricing momentum.
Much of the jump in home sales is being attributed to the $8,000 first time homebuyer tax credit initiated by the Obama administration this past February. Since home purchases need to be completed by November 30 to claim the credit, we could experience better than expected home sales numbers into the summer.
There are still too many variables involved to call a bottom in the US housing market, but the near-term outlook does look better than it did even a few months ago.
How do home sales affect my home refinance plans? Well, home sales affect two major components of a refinance mortgage. Home value and interest rate. Generally speaking, the higher volume of home sales, the more the demand, and eventually the higher the price. This of course affects your home’s “appraised value” which is use to qualify your Loan-to-Value ratio (LTV). A home value difference of as little as $5,000 to $10,000 or so can change your qualified home refinance options significantly for mortgage rates. Also, you may fall into the “above 80 LTV” range and be required to pay monthly mortgage insurance. That relative small home value difference to the downside can result in a rather large increase to your monthly refinanced mortgage payment.
As far as mortgage rates go, a stabilized or increasing value for the housing market makes lenders feel a little bit better about lending funds. Their risk declines and they lower their mortgage-spread premium to remain competitive with all the other lenders that now want to make a more secure profit. So more liberal programs may be offered along with a decrease to offered mortgage rates.
So, even if you don’t care what home sales do because you already own your own home, keep an on the home sales numbers just in case you are considering a home refinance. The better the numbers, the better your deal may become when you are ready to get that new home loan.
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
Labels: business, economy, finance, home loans, money, mortgage insurance, mortgage rates, refinance, refinance rates, refinancing
posted by Jim Bisnett at
10:25 AM
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