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Brendan Fontaine's Blog

By Brendan Fontaine | Mortgage Broker
or Lender in Auburn, ME
  • Builder Confidence Hits Highest Level Since May 2010

    Posted Under: Market Conditions in Maine, Home Buying in Maine, Home Selling in Maine  |  October 19, 2011 3:43 PM  |  219 views  |  2 comments
    The National Association of Home Builders/Wells Fargo Housing Market Index rose four points to 18 in October, the largest one-month increase since April of 2010. The index measures builder confidence in the market for newly built, single-family homes on a scale where any number below 50 indicates more builders view the market as poor than good. David Crowe, NAHB’s chief economist, said the latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country. Each of the Indexes three components saw significant gains, with the component gauging sales expectations for the next six months rising seven points to 24. Regionally, the West increased nine points to 21, the highest level since August 2007, while the Midwest and South each recorded four-point increases. More here.
  • MAINE Mortgage Rates At Lowest Level Since The 1940s

    Posted Under: Market Conditions in Maine, Home Buying in Maine, Financing in Maine  |  October 5, 2011 10:14 PM  |  295 views  |  No comments
    Court Street, Auburn, ME 1940s
    According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.18 percent last week from 4.24 percent the week before. The 30-year rate for jumbo loan balances dropped to 4.49 percent from 4.53 percent the previous week. Despite the decreases, the Market Composite Index, which measures total mortgage loan application volume, was down 4.3 percent. Mike Fratantoni, MBA’s vice president of research and economics, said potential borrowers largely remained on the sidelines, despite the lowest mortgage rates since the 1940s. The refinance share of mortgage activity was 79.1 percent of total applications. More here.
  • Mortgage Rates Now Easily in Line With All Time Lows

    Posted Under: General Area in Maine, Market Conditions in Maine, Financing in Maine  |  October 3, 2011 7:22 PM  |  283 views  |  No comments
    by Matthew Graham
    Mortgage Rates Now Easily in Line With All Time Lows
    Oct 3 2011, 4:04PM
    Bond markets rallied heavily today and Mortgage Rates continued to improve.  Most of the gains were seen in the form of lower borrowing costs today, but some of you may see another eighth lower in rate.  On average, rates are in line with all time lows.

    Today's Rates: 
    • BEST EXECUTION 30YR FIXED -Firmly 3.875%, Some 3.75% availability
    • FHA/VA - still at 3.75% !!
    • 15 YEAR FIXED- 3.375%, 3.25% getting closer to viable
    • 5 YEAR ARMS - low to mid 3% range, variations from lender to lender.
    Ongoing Guidance: I'd lean more heavily toward locking when Best-Ex is under 4.0 these days. While I'm optimistic that there are a few more gains in store for MBS with the beginning of new Fed Buying, I'd hate to see 3.875 unexpectedly evaporate on some surprise headline out of Europe or turning point in economic data.

    New Guidance: At these levels, only those among you who don't NEED to refinance or are otherwise willing to accept locking at an eighth higher rate or at the same rate but with significantly higher costs should consider floating. The reason is in the Mortgage-Backed-Securities ("MBS") that govern lender's rates. Think of these like "buckets." Up until recently, there were two different buckets that conforming loans could end up in and this allowed for a wider range of volatility in rates. 
    But with the Fed's recently announced commitment to reinvest it's MBS profits BACK INTO MBS, the secondary mortgage market is now almost exclusively focused on ONE bucket. The thing about these buckets that is helpful to the person deciding whether or not to lock or float is that they only hold certain mortgage rates. In the current case, we have 3.5% MBS coupons dominating the secondary. 
    As long as that remains the case, conforming loans will mostly be falling into 1 of 4 different rates. These rates are expressed in the graphic below as well as a convenient "meter" of sorts, which should generally coincide with the lock/float leanings you'll find on this blog depending on which of the 4 rates is the current Best-Execution rate. Hopefully it makes sense. Let me know your thoughts/questions and I'll elaborate as much as necessary.
  • Home Prices Rise For Fourth Consecutive Month

    Posted Under: General Area in Maine, Home Buying in Maine, Home Selling in Maine  |  September 27, 2011 5:34 PM  |  222 views  |  No comments
    The S&P/Case-Shiller Home Price Indices though July 2011 showed its fourth consecutive month of increases, with both the 10- and 20-city composites up 0.9 percent in July over June. David M. Blitzer, chairman of the index committee at S&P Indices, said July’s data shows fairly broad improvement in the annual rates of change in home prices, along with anticipated monthly increases. Some price gains are expected during spring and summer due to seasonal demand. Still, 17 of the 20 cities tracked by S&P showed monthly increases and 14 of the 20 cities saw their annual rates of change improve in July. Blitzer said, despite four consecutive months of rising prices, home values would have to continue to climb through the end of the year before it can be called a sustained recovery. More here; www.reliantauburn.com
  • Encouraging Signs For Housing Despite Slow Economic Growth

    Posted Under: General Area in Maine, Market Conditions in Maine, Home Buying in Maine  |  September 16, 2011 7:45 PM  |  215 views  |  No comments

    The Mortgage Bankers Association’s chief economist Jay Brinkmann doesn’t foresee much improvement in the overall economy in coming months, though he sees rising home sales and further stabilization in the housing market’s future. According to Brinkmann, booming rental markets and rising household formation numbers are encouraging signs that people are back on a path that could ultimately lead them toward buying a home. He also cites stabilizing home prices, recent decreases in foreclosures, and historically low mortgage rates as reasons to expect gains in purchase activity and the overall dollar volume of loans to buy homes next year. 

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