RealtyTrac's 2009 Foreclosure Report Gives Reason For Optimism

Like real estate, it appears that foreclosure activity is a local phenomenon, too.

As reported by RealtyTrac.com, more than half of all foreclosure-related activity in 2009 came from just 4 states:

1. California
2. Florida
3. Arizona
4. Illinois

More than 1.4 million filings made in 2009 are attributed to the above states. Furthermore, each ranks in the Top 10 for 2009 Foreclosures Per Capita.

The other states are Nevada, Utah, Georgia, Idaho, Michigan and Colorado.

Versus 2008, foreclosures are up 21 percent nationwide and that's a big number, but a deeper look at RealtyTrac's annual reports reveals a more positive undertone on the housing market.

1. 40 states fell below the national Foreclosures Per Capita average in 2009
2. Foreclosure activity fell on an annual basis in 10 states as compared to 2008

Foreclosures are still prevalent, though, and buying homes in foreclosure in Minneapolis continues to be big business.  First-time buyers, move-up buyers, and real estate investors each are bidding aggressively.

Distressed homes account for one-third of home resale activity, according to an industry trade group.

That said, buying foreclosures can be tricky.

First, properties are often sold "as-is" and the cost of repairs may unwind the home's status as a "value buy".  Furthermore, a lender may require specific fixes to be made prior to closing and that, too, costs money.

Second, buying a foreclosed home in Minnesota isn't as streamlined as buying a "normal" home. Closing on a foreclosure can be a 120-day process or longer. A 4-month time-frame may not fit your schedule.

And, third, finding foreclosures can be difficult. Despite the growth in foreclosure search engines, it still takes a good real estate agent to uncover the best homes at the best prices.

Read the complete foreclosure report and take a peek at RealtyTrac's foreclosure heat maps.  If you like what you see, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market -- you just have to know where to find them

Retail Sales Dropped In December And Now So Are Mortgage Rates

Mortgage rates are dropping this morning on weaker-than-expected Retail Sales data from December. Lower rates means more bang for your home-buying buck.

Excluding motor vehicles and parts, December's "ex-auto" sales receipts were down roughly $500 million from November. Analysts had expected receipts to grow.

The relevance of Retail Sales to home affordability isn't obvious, but it's definitely logical.

Retail Sales is directly related to consumer spending and consumer spending accounts for the majority of the U.S. economy. When consumer spending slows, the economy often does, too. It leads investors to seek out "safe" investments.

It's the reason why stock markets often drop on weak economic data -- stocks are among the riskiest investment classes available.

Conversely, the best place to find safety is in the market of government-backed bonds.  This world includes products like U.S. Treasuries and many of the mortgage-backed bonds that help set mortgage rates for people in Maple Grove.  Weak economic data puts mortgage bonds in demand.

For rate shopper, this is good news.  More demand for mortgage bonds causes mortgage rates to fall.  Mortgage rates are lower this morning because Wall Street is shedding some risk.

December's Retail Sales report closes out a year of generally-weak data.  2009 marks just the second time that Retail Sales fell year-over-year since the government started tracking it 40 years ago.  The other year was 2008.

For home buyers around the country, though, today may represent an opportune time to lock a mortgage rate.  Housing data is still improving and other economic indicators are showing strength.  Soon, Wall Street will shift from a "safe" mentality and move toward risk.

When it does, mortgage rates will rise.

10 Cities For Home Bargains

As the housing market improves across the country, certain cities are emerging as relative bargains.  Some areas, like Miami, were hit hard by the recession, and other areas are buoyed by good school systems and strong labor markets.

In this 5-minute video from The Today Show, 10 cities are highlighted for their home prices.  And they're not "small towns", either. 

Among the featured cities:

• Miami, Florida
• Akron, Ohio
• Tuscon, Arizona
• Minneapolis, Minnesota
• Trenton, New Jersey

Now, this piece is about finding gems on a national scale.  They exist locally here in Maple Grove , too.  You just need to know what to look for.

With mortgage rates low and tax credits available, it's not likely that bargains will last.

The Bad Jobs Report Wasn't All Bad -- Mortgage Rates Fell

Despite the headlines, it's important to remember that December's jobs report wasn't all bad news. 

Sure, the economy shed 85,000 jobs last month and the Unemployment Rate failed to dip below 10%, but for home buyers and rate shoppers in Minneapolis , the news was just fine.

The soft employment data led mortgage rates lower, making homes more affordable for buyers.

There is two sides to every economic coin.

Since early-2008, the U.S workforce has been closely tied to home financing. As the economy slowed and jobs were lost, Wall Streeters pulled money from the risky stock markets and moved it to of the relative safety of bond markets, instead.

Safe haven buying led mortgage bond prices higher which, in turn, caused rates to fall. Mortgage rates fell to 6 all-time lows in 2009. In a related statistic, 4.2 million jobs were lost last year.

And this is why Friday's non-farm payrolls report was so good for buyers.

See, in November, the economy added new jobs for the first time since 2007, housing looked strong, consumer confidence was growing.  The safe haven buying reversed and mortgage rates took off.  Analysts believed the nation's economic turnaround was complete.

But now, after December's jobs report returned to the red, Wall Street is forced to rethink its position. Safe haven buying is back and mortgage rates are lower because of it.

Over the next few months, expect a lot of this back-and-forth action in rates. In general, positive news for the economy will be met with higher mortgage rates and negative economic news will be met with lower mortgage rates.  There will be exceptions, but the general rule should hold.

What's Ahead For Mortgage Rates This Week : January 11, 2010

Data was sparse through 2010's first trading week last week, setting the stage for a week of momentum trading.

In up-and-down trading, mortgage pricing improved overall but the best rates of the week didn't last long.

Rates improved Monday and Tuesday as an oversold market corrected itself to better price points.  Then, in anticipation of the December jobs report, rates worsened Wednesday and Thursday.  Friday, after the jobs report was released, pricing proceeded to carve out a huge range before settling unchanged.

On average, lenders issued new rate sheets every few hours last week. It was a difficult week to shop for mortgages in Minnesota and elsewhere.

Unfortunately, this week doesn't figure to be much better. 

For the second straight week, the economic calendar is bare.  Traders -- like last week -- will be forced to rely on "gut feel" to make their trades.  That rarely bodes well for shoppers.  Especially because traders are facing a mortgage market in the midst of a terrible losing streak. 

Since reaching an all-time low December 1, 2009, 30-year fixed rate mortgages have worsened by 300 basis points, or 3 percent.

To a homeowner or rate shopper in Minneapolis , the math of 300 basis points looks like this:

• 5 weeks ago, a 4.625 percent mortgage rate required 0 points
• Today, the same 4.625 percent mortgage rate requires 3 points

1 point is equal to 1 percent of your loan size.

Last month's worsening is the worst 1-month deterioration in consumer mortgage rates from all of 2009.

If you're hoping for rates to fall back to early-December levels, know that it is possible. For this week, here's some things that could push rates in the right direction:

1. 3 Fed members are speaking. Each mention of economic under-performance in 2010 will be good for rates.
2. Retail Sales data is released Thursday. If the numbers are weak, mortgage rates should improve.
3. Consumer confidence surveys are released Friday. Lower confidence levels should help rates fall.

Be ready to lock at a moment's notice this week.  Rates may rise or fall, but markets are positioned toward the former.That's where momentum is pointing as of the Market Open today.

Keep an eye on rates and your loan officer on speed dial. Once the mortgage market starts breaking, it's expected to break quickly.