National News Confidence from 2 Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.” Derived from a monthly survey that NAHB has been conducting for the past 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder percep-
tions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. Following substantial increases in the
previous month, the HMI components measuring current sales conditions and sales prospects for the next six months each remained unchanged in October at 42 and 51, respectively. Meanwhile, the component measuring traffic of prospective buyers increased 5 points to 35, its highest level since April of 2006. Builder confidence continued to improve in three out of four regions in October. Looking at three-month moving averages, the HMI gained two points in
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the Midwest and West to 42 and 44, respectively, and three points in the South, to 39. A three-month moving average for the Northeast’s HMI held unchanged at 29. Editor’s note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at www.nahb. org/hmi. More information on housing statistics is also available at http://www. housingeconomics.com/. The above article has been provided to you compliments of the National Association of Home Builders.
Mortgage Rates from 1 jumbo deals having extraordinary credit criteria (i.e. very low loan-to-values and very high credit scores) hitting the market in the last two years. The FHFA has also directed the GSEs to eliminate the preferential pricing they used to give the large lenders in exchange for their volume commitments. Thus, smaller lenders will be on a more even playing field. The third factor has to do with proposed international banking standards known as Basel III. A goal of this agreement is to strengthen capital standards for banks. One of the proposals puts restrictions on how much mortgage servicing rights can count towards capital. Some of the larger national banks have huge mortgage servicing portfolios and therefore valuable servicing rights. The value of servicing is an important component in determining mortgage rates, so if the value of these is limited, it could affect future rates. So, while mortgage rates are at historically low levels, there are number of factors that could push them back up in the not too distant future. Then again, they might not depending on how the economy performs. There are many unknowns in the mortgage industry, and we all have to adapt to the continuous changes. As lenders, we can’t control what regulations we must adhere to, or what rates we’ll be given, but we can make sure we are upto-date on the latest changes. If you have a knowledgeable lender in your corner, your clients can rest assured they will be well-informed throughout the mortgage process. We might not be able to predict what rates we’ll see in the future, but we know that home ownership will always be a goal of most Americans. It’s our job to make sure our clients and members can realize that dream and have a positive, informed home buying experience along the way. Mr. Paukovich oversees the direction and management of mortgage lending, including loan servicing, at Ent Federal Credit Union. He can be reached at JPaukovich@ent.com
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October 29, 2012