Mortgage Rates Bounce Off All-Time Lows; The Start Of A Trend?

Low mortgage rates are terrific -- if you can get them.

One week after posting its lowest mortgage rate in 50 years, Freddie Mac reports that the 30-year fixed rate mortgage rose by an average of 7 basis points nationwide this week to 4.22%. To get the rate, you'll pay an average of 0.7 "points".

This week's rise in the 30-year fixed rate mortgage pulled rates off their all-time lows so either you locked last week's rock-bottom rates, or you missed it.

Mortgage rates are rising.

As a refinancing homeowner or home buyer in Minneapolis , rising mortgage rates are something to watch. This is because, as mortgage rates rise, so do the long-term interest costs of giving a mortgage, increasing your homeownership costs.

For example, if you failed to lock a rate last week when rates were bottomed, and then decided to lock-in only after rates had climbed 0.25 percent, at the new, higher rate, over the life of your loan, you would have responsibility for an extra $5,300 in interest costs for every $100,000 you borrowed.

Rising mortgage rates can be expensive.

For home buyers, rising mortgage rates pose a second problem -- they erode your purchasing power. A home that fits your budget at today's rates may not fit your budget at next week's rates. And because mortgage rates change quickly, you can sometimes feel ilke you're racing the clock.

The hard part about mortgage rates, though, is that we can never know what they'll do next. On some days they rise, on some days they fall, and on some days they stay the same. Instead of trying to "time the bottom", therefore, a good strategy can be to lock the first, low rate that fits your budget. Then, if rates are lower in the future, you can look to refinance at that time.

Mortgage rates remain at historical lows. It's a good time to lock a rate.

Ranking The Best Places To Live In The U.S. (2011 Edition)

CNNMoney recently released its Best Places To Live 2011 list.

The annual survey is based on data from Onboard Informatics. Using Quality of Life factors such as education, crime and "town spirit", and focusing on towns with between 8,500 and 50,000 residents, the CNNMoney survey ranks the country's best "small towns".

To be eligible, towns must be have a median household income greater than 85 percent, and less than 200 percent of the state median income; must not be a categorized as a "retirement community"; and must be racially-diverse.

From a list of 3,570 eligible towns nationwide, Louisville, Colorado was ranked #1.

The complete Top 10 Best Places to Live as cited by CNNMoney, and their respective average home listing prices :

1. Louisville, Colorado ($383,569)
2. Milton, Massachusetts ($577,008)
3. Solon, Ohio ($291,162)
4. Leesburg, Virginia ($486,018)
5. Papillion, Nebraska ($218,520)
6. Hanover, New Hampshire ($643,500)
7. Liberty, Missouri ($177,678)
8. Middleton, Wisconsin ($347,770)
9. Mukilteo, Washington ($345,487)
10. Chanhassen, Minnesota ($418,607)

Rankings like these can be helpful to home buyers nationwide, but it's important to remember that the Best Place To Live survey is subjective. You may find none of the above towns to be to your liking.

You may also find the lowest-ranked city to be your favorite.

In other words, before making a decision to buy, connect with a real estate agent who has local market knowledge. That's the best, most reliable way to make sure you get the housing data that matters to you.

Ranking The Best Places To Live In The U.S. (2011 Edition)

CNNMoney recently released its Best Places To Live 2011 list.

The annual survey is based on data from Onboard Informatics. Using Quality of Life factors such as education, crime and "town spirit", and focusing on towns with between 8,500 and 50,000 residents, the CNNMoney survey ranks the country's best "small towns".

To be eligible, towns must be have a median household income greater than 85 percent, and less than 200 percent of the state median income; must not be a categorized as a "retirement community"; and must be racially-diverse.

From a list of 3,570 eligible towns nationwide, Louisville, Colorado was ranked #1.

The complete Top 10 Best Places to Live as cited by CNNMoney, and their respective average home listing prices :

1. Louisville, Colorado ($383,569)
2. Milton, Massachusetts ($577,008)
3. Solon, Ohio ($291,162)
4. Leesburg, Virginia ($486,018)
5. Papillion, Nebraska ($218,520)
6. Hanover, New Hampshire ($643,500)
7. Liberty, Missouri ($177,678)
8. Middleton, Wisconsin ($347,770)
9. Mukilteo, Washington ($345,487)
10. Chanhassen, Minnesota ($418,607)

Rankings like these can be helpful to home buyers nationwide, but it's important to remember that the Best Place To Live survey is subjective. You may find none of the above towns to be to your liking.

You may also find the lowest-ranked city to be your favorite.

In other words, before making a decision to buy, connect with a real estate agent who has local market knowledge. That's the best, most reliable way to make sure you get the housing data that matters to you.

New Home Supplies Remain Flat; Builders Not Over-Extending

Sales of newly-built homes slipped in July, falling 1 percent as compared to June. Home buyers closed on a seasonally-adjusted, annualized 298,000 units, the lowest reading since February.

The supply of new homes, however, remained flat.

July's 6.6 months of supply equaled June's tally and remains near the multi-year low of 6.5 months set in May of this year. The figures suggest a new home market that's finding its balance.

Builders are building to meet demand, and not much more.

The New Home Sales report may have read differently if not for the Northeast Region which doubled its sales units in July. The gains buoyed the broader data, re-affirming the importance of looking past national data and focusing on what's local; the national market is not reflective of any given town

Broken down by region, July New Home Sales fared as follows:

• Northeast Region : +100.0% from June 2011 
• Midwest Region : +2.4% from June 2011 
• South Region : -7.4% from June 2011 
• West Region : -5.9% from June 2011 

However, as with most months, it's important that we recognize the New Home Sales data's margin of error.

Although New Home Sales showed a 1 percent drop in July, the reported margin of error was ±12.9%. This means that the actual reading could have been as high as +11.9 percent, or as low as -13.9 percent. Because the range includes both positive and negative values, the Census Bureau assigned its July data "zero confidence".

New Home Sales appear to be stable, despite falling sales figures. Supplies remain flat and builder confidence does, too. The good news for buyers in Maple Grove , then, is that lower mortgage rates are making homes more affordable.

Mortgage rates are currently at 50-year lows.

Existing Home Sales Slip In July

Home resales slipped in July.

According to the National Association of REALTORS®, Existing Home Sales nationwide fell to 4.67 million units on a seasonally-adjusted annualized basis last month. It's the fourth straight month below the 5 million mark, and the report's lowest reading since November 2010.

An "existing home" is a home that's been previously occupied or owned.

In addition, the Existing Home Sales report showed home supplies rising nationwide. At the current pace of sales, in other words, the complete, national "For Sale" inventory would be exhausted in 9.4 months. This, too, is the worst reading since November 2010.

On a units basis, however, the number of homes for sale actually fell in July. As compared to June, home resale inventory dropped 65,000 units to 3.65 million.

From these figures, we can infer that, despite low mortgage rates and lagging home values, buyer activity is slowing in Minnesota and nationwide. This may be seasonal, or it may be a long-term trend.

Either way, there's opportunity for today's home buyers.

With mortgage rates at all-time lows, home affordability is peaking. More households can afford housing payments than during any time in history and with the fall season approaching, buyers in Minneapolis may find contracts negotiations to be more "friendly".

This can mean lower sale prices and larger concessions from sellers -- the hallmark of a Buyer's Market.

It's a good time to look at your options. Talk to your real estate agent and see what's out there for you. Low home prices may persist, but low mortgage rates likely won't.

What's Ahead For Mortgage Rates This Week : August 22, 2011

Mortgage markets improved again last week, pushing mortgage rates in Minnesota to an all-time low; lower than the lows set last November, even.

Last week's low mortgage rate drivers are primarily European. Joining the debt concerns that have dogged Europe since March, a fresh wave of doubt has surfaced about the health of some Eurozone banks. The fears sparked a new wave of safe haven buying.

Global equities were socked last week and the Dow Jones Industrial Average fell for the 4th straight week. For home buyers in Minneapolis , though, the timing may be perfect. As stock markets lose, bond markets gain and when bond markets gain, mortgage rates drop.

According to government-group Freddie Mac's weekly mortgage rate survey, the average 30-year fixed rate mortgage fell to 4.17% last week with 0.7 points. This is the lowest rate-and-points combination in history.

The 5-year ARM fell to 3.08 with 0.5 points.

As mortgage rates fall, though, be wary of trying to "time the market". It's impossible to know when rates have bottomed and mortgage rates tend to spike without notice. That's what happened in May 2010. And then again in November 2010. And then a third time in April 2011.

When rates rise, they could tack on 0.500% or more overnight.

This week, there is a lot that can move mortgage rates. With housing data set for Tuesday release, the Eurozone stories still unfolding, and three Treasury auctions planned, it's best to be ready for locking.

If you're floating a mortgage rate or still shopping, consider locking your rate as soon as possible. Rates trended higher to close out last week and will be riding that momentum forward. Rates are lower than they've been in history.

Take advantage of it.