Real Estate Information

We contacted Chris Simms for information on the New FHA Premiums, this is what he had to say:

FHA is one of the few ways that you can explore 100% financing and has been a benefit for a number of individuals who use this type of loan.  Yesterday, FHA released some new risk based pricing in regards to credit scores and loan to value.  In some cases the premiums are better than previously indicated for upfront premiums or better scores and worse for lower credit scores.  The triggers for the new premiums are:

• Loan Terms
• Credit Score
• LTV
• First Time Home buyer

Each situation is individualized so if you are considering an FHA loan talk to your loan officer or call us if you have questions or would like information on on obtaining financing for a home purchase.

Chris may be reached by calling 314.229.4242 or via email at csimms@pulaskibankstl.com

Chris Simms, Certified Mortgage Planner with Preferred Home Lending powered by Pulaski Bank of St. Louis provided the following about last weeks activity in the maret:

Just like and octopus on skates, so goes the volatile Bond market in recent days - and last week.  Bonds and home loan rates skated around, but ultimately closed out the week very close to where they had begun.

Bonds and home loan rates ended the week on a sour note, but had spent the early part of the week moving sideways and slightly higher on a blend of mixed economic news and action in the Stock market.  Grim news arrived from insurance giant American International Group (AIG), who reported an enormous first-quarter loss of $7.81 billion or $3.09 a share, compared with earnings of $4.13 Billion just a year ago.  The important part of this loss is due to write-downs on Mortgage Bonds, which tells us that the credit crissis is not yet entirely behind us.  On these negative headlines, Stocks moved lower and money flowed over into bonds, helping home loan rates improve.

By Thursday, bonds were looking good and holding their ground above several floors of technical support, as the weekly initial Jobless Claims numbers were reported at 365,000, slightly below expectations of 375,000.  The more closely watched four-week average of Claims edged higher to 367,500.  This not-so-hot read on the labor market helped bonds and home laon rates continue to improve.

But then on Friday, bonds gave back some gains on news of oil hitting $126 per barrel - and the inflationary effects of high oil prices is bad news for both Stocks and bonds.  Oil prices are reaching exceptionally high levels, and may get higher still.  Read on for where oil prices are forecast to go in the future - and what it means for some loan rates. 

AND IT'S NOT JUST FILLING UP THE TANK WHERE YOU'RE SEEING PRICE INCREASES. . . IT'S WHEN FILLING UP YOUR BELLY AS WELL!  THAT'S RIGHT, FOOD AND DRINK PRICES ARE ON THE RISE IN A BIG WAY. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME MONEY-SAVING TIPS

After last week's thin economic calendar, where Stock market action and technical factors had a big impact on bonds and home loan rates, this coming week brings a much jucier economic report agenda.

Retail Sales for April will be reported on Tuesday, followed by Wednesday's Consumer Price Index (CPI).  This widely watched measure of consumer inflation will take special significance, now that the Fed has signaled their current rate cutting cycle may be at an end.  On Thursday come a read on the new construction housing market with Housing Starts and Building Permits.  We will have to see if these reports can keep Bonds above their 50 and 100 Day Moving Averages . . . as see in the chart below.  If the raports are economically weak or negative, bond prices and home loan rates should hold their ground, and perhaps even ind some improvement.

Remember when Bond prices move higher, home loan rates move lower . . and vice versa.  And right now, there's an important story breaking that will be very important to stay turned in to.  Last Friday, oil prices reached a lofty $126 a barrel, and Goldman Sachs is forecasting that black gold could rise even ghigher, perhpas as high as $150 - $200 a barrell in the next twelve months.  If they are right, the inflationary effects of high oil prices could pressure Bond prices to move lower, causing home loan rates to move higher. This will be a story to watch carefully in the days andmonths ahead. 

If you have noticed your grocery bill getting bigger lately, you're not alone - and it's likely not because you're eating more.  According to Rising Foold Prices:  Policy Options and World Bank Response, global wheat prices have increased a whopping 181% over the past three years - and overall, food prices have increased by 83%!

Concerned?  You're not alone.  A recent poll showed that 73% of consumers cite higher grocery bills as a concern; with nearly half saying food inflation has caused a hardship for their households.  In fact, food prices ranked just below record-hgigh gasoline prices on the list of things people are worried about.

According to Gregory Karp, author of Living Rich by Spending Smart there are a number of ways to save.

Time Grocery Shopping by stocking up on sale items,

Make eating out a special treat - save time by cooking ahead when you do have time and you can convert two restaurant meals into frozen meals and could save up to $360 per year.

Don't buy bottled water - you could save $311 per year

Have comments or questions for Chris?  Call 314.229.4242 or email him at csimms@pulaskibankstl.com

Chris Simms, Certified Mortgage Planner with Pulaski Bank of St. Louis and Preferred home lending has this to say about the market activity this past week:

As you might have heard the Fed dropped the prime rate by .25 basis points leaving the Fed funds rate at 2% and the prime rate at 5%.  Usually that means the bond market is boinb to raise rates because of inflation concerns.  In this case it helped bonds move in the right direction on Thursday morning and lower rates.  Then Friday morning the jobs report came out and expectations were for a 75K loss in jobs.  Instead they came in at a 20K loss.  This is still not good news.  The economy needs to create about 150K jobs a month to keep up with the population growth but instead we still hsaw a loss, so why did the bond market knee jerk react this morning pushing rates back to 6% and in some cases 6.125%?  Simply emotions, stock investors are feeling that the worst is over and so shortly things are going to be turning around.  So a 20K loss is much better than expectations of 75K loss.  So needless to say they reacted and moved the market again.  Since the open this morning they have come back a little but they are still up and driving our rates up.  The good news with the Fed is that they don't see any reason to continue lowering rates meaning inflation will have a chance to come under control.  (May be gas will come down then).  The largest reason for our gas prices is the weakening dollar driven by the rate cuts.  The rest of the world doesn't have the inflation jump that we have had over the past six months with Gas and food.  That will help bonds gain some strength.  At the same time the market isn't out of the woods yet but that only provides more strength for investors to invest in bonds and lower our mortgage rates.

Hang in there we are feeling that the volatility we have been experiencing might settle down and bring some consistency.

If you would like to contact Chris with your questions he may be reached at 314.229.4242 or via e-mail at csimms@pulaskibankstl.com

Chris Simms, Certified Mortgage Planner had this to say about MDHC Funds:

It appears as though funds for the Down Payment Assistance programs may be hard to come by in the next few months.  The depressed market is making it difficult for MHDC to encourage investors to back a new ond issue for 2008.  As a result, the worse case prediction is that new funds may not ve available until October of this year.

A proposed new program, Show Me Home (program with a soft second, which was approved by FHA) and would have been offered in addition to their other programs, was voted down at the last MHDC meeting.  The program is going to try to be pushed through again in May.  Until then reservations for the backup list for funds from the Down Payment Assistance program are still being taken but no indication for how long.  Some loans have been moved from the waiting list to the reserved list as funds become available.

If you are a First Time Home Buyer and would like more information on this or other down payment Assistance programs, you may contact Chris at 314.229.4242 or via e-mail at csimms@pulaskibankstl.com.

Chris Simms, Certified Mortgage Planner shares information on last week in the mortgage industry:

Bonds have certainly weathered all kind sof days this spring, with ths past week being no exception.  Bonds did enjoy some high times starting with Monday's move to the upside after National City Corporation announced they would be receiving a $7 Billion cash infusion.  This move suggests that investors are seeing value in the battered financial sector, and perhaps are feeling that there is a bottom being reached inthe credit crunch.

In other headlines Existing Home Sales met expectations, but New Homes Sales numbers for March were worse than expected, possibly due to the large increase inthe costs for materials needed to construct a home.  But then there was a change in climate onFriday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates.  Overall, home loan rates ended the volatile week unchanged to slightly higher.

Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. 

After last week's relatively slow economic news calendar; things will heat up this week with several events that have the potential to move the market.  On Wednesday, the Fed will announce their interest rate decision . . and then the very next day . the Fed's most favored guage of inflation will be released, the Personal Consumption Expenditure Index (PCE).  It will be interesting to play armchair quarterback to the Fed's decision, and wath what the inflation numbers reveal!  And let's not forget, on Friday we will see the important Jobs Report, where early estimares are for a net loss of 80,000 jobs.

Should you have questions for Chris he may be contacted at 314.229.4242 or e-mail csimms@pulaskibankstl.com.

Chris Simms, Certified Mortgage Planner with Pulaski Bank, has provided us with an update on the market:

"It Requires a Grat Deal of Boldness and a Great Deal of Caution to make a Great Fortune." - Ralph Waldo Emerson.  And a great deal of caution was definitely important last week, as "earnings season" began on Wall Street.  First quarter earnings for Stocks got off to a bit of a rought start with disappointing news from aluminum company Alcoa - always the first in line to report.  And General Electric surprised to the downside on Friday, with worse than expected earnings and comments on future earnings, cautioning they'd likely be lower than previously thought.  The Stock market didn't like the negative tone and lost some ground, while Bonds moved both up and down during the week - hurt by some inflationary fears, but helped by cash coming over from Stocks.  For the week overall, home loan rates ended up close to where they began. 

In other news last week, "Meeting Minutes" from the March 18th Fed meeting revealed that infamous Fed Presidents Richard "Loose Lips" Fisher and Charlie Plosser both dissented from the recent decision to cut the Fed Funds Rate, stating that "inflation expectations could potenttially become unhinged, if the Fed continues to lower the Fed Funds Rate in the current environment."  Bold comments from two who clearly believe caution regarding inflation is of the utmost importance.

And caution, rather than confidence, seens to be the word of the moment, as Consumer Sentiment for April was reported far below expectations, representing a 26 year low for the index.  This very ugly reading suggests that consumers may be hesitant to make large purchases, which does not bode well for future economic prospects.

Despite the dark cloud cast from the negative economic news, the silver lining is that home loan rates are once again near levels not seen since mid-2005.  But remember, these low rates can change quickly.  To see how you may benefit from the current market conditions, feel free to contact me.

You can contact Chris at 314.229.2424 or by e-mail csimms@pulaskibankstl.com.

Chris Simms, Certified Mortgage Planner with Preferred HOme Lending Powered by Pulaski Bank had this to say in regard to upcoming Mortgage Trends:

"I KNEW THE RECORD WOULD STAND UNTIL IT WAS BROKEN." - Yoggi Berra A record was broken on the job front last Friday as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - the greatest jobs loss reported in five ears.  In addition, revisions to both January and February's Jobs Report delivered an additional loss of 67,000 jobs - that's on tope of the previously reported loss of 85,000 jobs for that two-month period.

And . . the story might be even a bit gloomier than it already appears.  The Labor Department uses a lot of averaging to help it come up with its numbers more quicky, but this practice can skew the current picture significantly.  This of it this way - and because it's now baseball season here's a Baseball analology - let's say that mid-way throught he season, a red-hot hitter with a batting average of 340 declines into a bad slump for several weeks.  While he now can't even hit a basketball thrown underhand to him, his average - while lower to 300 - is still very strong due to his previous hot performance.  so someone looking at just the statistics my think that this batter is still absolutely terrific, but he is really someone the fans are booing as he approaches the plate.  This is not very different from current numbers being reported by the Labor Department - previous averaging is likely causing an understating of the ACTUAL number of job losses...which somewhat masks how bad the job market really is.

This bleak Jobs Report greatly boosts the odds of not only a first-quarter recession, but perhaps a worse economic downturn than many economists fear.  The Federal Reserve may respond to this increasing trend in job losses with additional interest rate cuts when they next meet to determine monetary policy on April 30 and June 25.  As we've seen in the past though, such rate cuts do not translate into lower long-term rates for mortgages, so there is no better time than right now to refinance an existing mortgage or to structure a new one.  Let's work together to make sure your current financning is a home run!

Questions for Chris may be directed to CSimms@PulaskiBankStl.com or you may call him at 314-229-4242.

Did you ever think how important photography is to real estate?  Especially today with all of the ability to advertise through the internet on numerous portals whether it is Craig's List, or Realtor.com, or Trulia etc.  So the questions is "why would the Realtor want to take the pictures?"  RISMedia recently reported that there are several study's and/or surveys that found the number of photograph's directly links to the days on market, sale price etc.  If you want a quality picture most Realtors need to use a professional photographer.  We certainly do.   Check out the difference on our featured listings at www.Trails2OpenSpaces.com.

Here in St. Louis it has been flooding due to all the rains.  Homes that have never flooded before or had any water in the basement are beginning to see water trickle in one way or another.  With Spring breaks going on and many families leaving town for warmer, dryer weather you need to be sure you have a battery back-up on your sump pump.  You need a back-up in the event the electricity goes out.  Before you leave for the beach, make sure you have a back-up plan to ensure your basement stays dry. 

As a service to our sellers we check on their homes when they are out of town.

It's that time again for our weekly update from Chris Simms, Certified Mortgage Planner with Pulsaki Bank:

Last Week in Review -

"JUST WHEN I THOUGHT I WAS OUT . . THEY PULL ME BACK IN."  Al Pacino in the 1990 film The Godfather II and if Bonds and home loan rates thought they were out of the days of volatility . . .they got pulled right back in, as last week brought daily price savings of almost historic proportions.  For the week overall, fixed home loan rates improved by about .25%

What led to the dramatic action this week?  The bipolar emotional state of the markets began deeply depressed on Monday, but then were filled with joy Tuesday when the Fed made an interesting move by announcing the creation of the new Term Securities Lending Facility (TSLF)  The TSLF wil provide borrowng banks with $200 Billion to draw on to help inject liquidity into the credit markets, and further, will accept some mortgage-backed securities as collateral, which effectively may helpt to "upgrade" the value and perception of battered Mortgage Bonds.

But in the meantime. . . struggles are still being played out related to the downgrade and losses experienced by companies holding massive amounts of mortgage-backed securities.  Headlines hit on Thursday about The Carlyle Group, which manages a portfolio of mortgage-backed securities, not being able to meet a margin call and being forced to sell off large amounts of mortgage paper into the markets at great financial losses.  Then on Friday, the news broke that financial brokerage and investment banking giant, Bear Steams had suffered enormous losses, and their lack of liquidity endangered them from going out of business . . or "sleeping with the fishes?.  The new aforementioned TSLF is designed to help this type of liquidity problem, but it will not go into effect for a few weeks, and Bear Stearns would not last that long.  Coming to the rescue with loans were both the NY Fed and JP Morgan Chase.  These sure are exciting times.

One bright spot for the financial markets was a low consumer inflation reading.  The Overall and Core Consumer Price Index (CPI) figures were reported unchanged, far cooler that the expected increases of 0.3% and 0.2% respectively.  These tame inflation numbers give the Fed a green light to cut the Fed Funds Rate by another .76% at Tuesday's meeting. .. but read on to understand exactly how this cut may impact YOU.

Forecast for the Week

So if you love all the excitement, drama, intrigue and crazy volatility of late. ...you'll love the week ahead, as it is loaded full with market movers.  We'll get the latest readings on the health of the manufacturing and housing sectors, but the main event will take place on Tuesday when the Federal Reserve announces its latest interest rate decision and Policy Statement.

The Fed is expected to cut the Fed Funds Rate by another .75%.  However, as we've seen following every Fed rate cut in the recent cycle, chances are very good that Bond pricing will worsen following the cut...which results in higher home loan rates.  This happens because Fed rate cust help to stimulate the economy, by makeing it less expensive to financne personal and business purchases...and this is turn fuels inflation, the arch-enemy of fixed return assets like Bonds, which home loan rates are based on.

So a word to the wise - if you or someone you know has been ready to move forward on a purchase or refinance, there's no time like the present.  Be sure to get in touch with me, so I can explain your options and help plan a great strategy for your home loan.

For questions contact Chris at csimms@pulaskbankstl.com or call 314-229-4242.