February Update

Happy February!

Does anyone else have at least a hesitation when it comes to spelling the month “February”? You would think as many times as I have spelled the month over my lifetime it would just roll off my tongue, but it doesn’t.

Markets come and go. We had a few weeks where mortgage interest rates dropped to within a few decimal points of 20 year lows. Now they seem to have moved back up, but still at very good (low) rates. The working assumption in the industry is that rates should hold in the 4% range for a 30yr fixed as long as the economy is not dealing with inflation. And currently there is no real inflation in the forecast, so expect interest rates to remain relatively low until we see inflation come into the economy.

Joann and I had a great day last Monday. For Valentines day my wife suggested we take a trip on the motorcycle over to Moss Landing and eat lunch at Phil’s Fish Market. This was the longest trip Joann has ever taken on a motorcycle with the round trip at just about 90 miles and she was much less nervous on the return trip. We had a great easy ride along Elkhorn slough, even if we did forget about it being cooler along the coast. Phil’s cioppino lived up to expectations and we bundled up a bit more before heading home. As we got close to home Joann even said we would have to buy her own helmet for next time. I’m ready.

Has anyone else noticed a recent uptick in LinkedIn connection requests. I am not very active on LinkedIn although I have been a member for at least 10 years now. I have noticed over the last six months a very marked increase in requests for links, some are clearly spam type requests from people I don’t know but have some sort of interest in connecting with a self employed mortgage broker (banking, finance, creditors, etc.). Just curious if anyone else is seeing the same thing.

I’m still a little amazed that adjustable rate mortgages (3/1, 5/1, 7/1 ARMS) make up less than 7% of all mortgage applications. The long term lowest mortgage interest cost is going to be on a variable rate loan because the consumer is taking on the unknown future market risk. And consider that most mortgages are either refinanced or paid off in seven years, then why should a consumer pay a higher interest rate to assure them of 30 years of protection against higher rates? Fixed payment security is the reason. If your income (and future income) can tolerate a changing mortgage payment, then it’s worth looking at an adjustable rate mortgage. It’s certainly not right for everyone, but it is something that should be considered.

Trivia for the month:
Today’s Question – What’s the temperature – We all get goofy hearing weather folk quote temps in Fahrenheit or Celsius (centigrade).  What temperature would it have to be to get the same reading on either scale??

Last month’s question: What am I missing – Here’s one that someone found in a puzzle book.  There is one letter (a vowel) missing from this series.  If you add the letter several times and separate the words to make a sentence.

Answer – “He greeted the eleven extremely well dressed gentlemen.”

We are seeing a growing number of homes for sale here locally, after a very tight market for the last quarter of 2014

Morgan Hill. CA Feb. 2015
71 homes on the market vs. 52 a month ago
34 median days on market compared to 81 a month ago
Morgan Hill median price: $897,932 (almost flat from a month ago)
Morgan Hill median size: 2,498 sq. ft.
This includes condo’s and single family homes. Data pulled from Movoto.com

Mortgage Interest rates are up about 0.20% over last month, still at very good rates. Long term expect some market pressure to move rates up a bit, but most likely the 30yr fixed is going to remain in the 4% range as long as we don’t see inflation in the economy.

Product    Today    1 yr Low     1 yr. High
30 Yr FRM    3.87     3.55     4.56
15 Yr FRM    3.14     2.95     3.55
FHA 30 Year Fixed     3.50     3.25     4.25
Jumbo 30 Year Fixed    3.85     3.58     4.38
5/1 Yr ARM    3.16     3.08     3.26
Updated: 2/17/15