Mortgage Rates May Be Low, But They're Tough To Pin Down -- Especially This Week

Mortgage rates are low right now but pinning them down this week could be a challenge. As Labor Day Weekend nears and Wall Streeters take their head-start on the holiday, trading volume will fall, which will cause mortgage rates in Oklahoma to get jumpy.

As mortgage rates change, so does the long-term cost of owning a home. Every 1/8 percent adjustment changes a household budget.

Meanwhile, the relationship between "vacation days" and mortgage rate volatility is an interesting one; based more in scarcity than market fundamentals.

Rates tend to get volatile near holidays because of two inter-related facts:

1. Conforming mortgage rates are based on the price of mortgage-backed bonds
2. Mortgage-backed bonds can't trade without a buyer and a seller at a specific price

So, as the week progresses and more traders leave for their respective "extended" 3-day weekends, there's fewer buyers and sellers left on Wall Street to connect for a trade. As a result, mortgage bond prices move across larger gaps than on a "normal" day which, in turn, translates into faster, larger changes in rates.

This phenomenon can be exaggerated during periods of economic uncertainty -- like what we're in now -- and, furthermore, there's a bevy of important data set for release this week including the FOMC Minutes, inflation data, and August jobs figures.

In other words, rates would have been volatile without the vacation week. The presence of Labor Day just piles on.

Mortgage rates may rise this week, or they may fall. Either way, if you have a chance to lock something favorable and within your budget, consider doing it. Rates are at all-time lows and likely won't last.

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Originally posted at Oklahoma City Real Estate Blog

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How To Reduce Home Energy Costs By Sealing Air Leaks

With Labor Day looming, the autumn and winter months aren't far behind. It's a good time to reflect on your home's heating and cooling costs, and take steps to lower your energy bills. Finding air leaks may be a perfect first project.

According to the U.S. Department of Energy, up to 30 percent can be cut from a home's energy costs just by reducing drafts. For example, a 1/16-inch gap unsealed gap around a window is equivalent to leaving the window 3 inches open.

That's a lot of wasted Oklahoma City air.

The good news is that air leaks are rather simple to identify, and simple to fix. The key is to know where to look. And, to make the job easier, the government offers a complete DIY Guide To Sealing and Insulating a home.

Some of the key tips include:

• Focus on the attic and basement, where most air is lost
• Locate problem areas on a chimney
• Check recessed lights which allow air flow between conditioned and unconditioned air

The government's website also provides a 13-page PDF with detailed images, instructions, and recommendation to help you with the work.

However, if the job is beyond your skill set, be sure to call a qualified contractor. Sealing your home from air leaks will reduce your monthly energy bill and the money spent to pay a professional will be just a fraction of what you'll save over time.

(Image courtesy: US Department of Energy)

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Originally posted at Oklahoma City Real Estate Blog

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Santa Fe Depot — Oklahoma City Historic Postcards

From my Oklahoma City postcard collection…

Just east of the Ford Center at the entry to Bricktown is the Santa Fe Depot. This is a magnificent art deco building is from the late 30’s. It’s still used today for Amtrak’s Heartland Flyer. It has also been restored and used for events such as a wedding reception I attended there.

As a small child I remember going there to catch the train to Houston to visit my aunt. It was a bustling place back then, and of course seemed gigantic to me. The train stopped running sometime during the 60’s or 70’s and the Santa Fe Depot sat abandoned. I recall thinking during the 80’s and 90’s that this would have be a great place to open a Oklahoma City Hard Rock Cafe!

Originally posted at Oklahoma City Real Estate Blog

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Robinson Street — Oklahoma City Historic Postcards

One of my hobbies is collecting historical postcards of Oklahoma City. I’ve wanted to include in the blog, images from my collection and perhaps add my own thoughts.

Today’s postcard is an artists rendering of North Robinson Street looking north from Sheridan. This is from the 1940’s. If you were the photographer here, the Cox Convention Center would be off your right shoulder and Myriad Gardens off your left. The building shown at the left is the Colcord Building, and the building on the right is now the Sheraton Century Center parking garage. This, to me, is one of the unfortunate effects of the urban renewal. We lost so many downtown treasures.

You can see the State Theater on the right. I still remember seeing movies at the State. The State Theater opened in 1937 and remained there until it was destroyed in the 1970’s. The State was one of the few theaters built to showcase Columbia Pictures.

Across the street, if you enlarge the picture, you can see the Liberty Theater. I subsequently became the Harber Theater from 1948 to 1953 when it became the Cooper Cinerama.

Finally the tall building in the back is the First National Bank Building.

Originally posted at Oklahoma City Real Estate Blog

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Are There Too Many Realtors In Oklahoma?

I read an interesting post this morning by Jay Thompson, The Phoenix Real Estate Guy. He was asked how many Realtors were in Arizona and how many per-capita.

The answer he came up with surprised me somewhat. Arizona has over 43,000 licensed Realtors. With there population that works out to be 1 agent for every 153 people in the state. Wow, that’s a lot. In fact, out of the top 10 states of Realtor population, Arizona has the lowest per-capita.

This report naturally got me curious as to how Oklahoma would compare. Per the National Association of Realtors Monthly Membership Report of July 2010, Oklahoma has 9,084 Realtors. Our 2009 population estimate is 3,687,050. This works out to 406 per Realtor in Oklahoma.

So there you have it. If you’ve thought there are too many Realtors, Oklahoma is better off than most!

The Complete List

Photo credit: Flickr/nationallibrarynz

Originally posted at Oklahoma City Real Estate Blog

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Oklahoma City Market Update

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Originally posted at Oklahoma City Real Estate Blog

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Oklahoma City Ranked 68th Out of 225 In Home Affordability Index

With home prices holding firm and mortgage rates still dropping, home affordability is reaching new heights.

According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between April-June 2010 were affordable to families earning the national median income.

It's a slightly higher reading as compared to last quarter, and the second highest reading in the survey's history.

As with all aspects of real estate, however, home affordability varies by locale.  Oklahoma City ranked 68th out of 225 cities. The cities are ranked by comparing median family income with median home prices.

For example, 97.2% of homes sold in Syracuse were affordable for families making the area's median income, earning the New York city its first "Most Affordable Major City" designation.  Indianapolis was the first quarter winner.

On the opposite end of the spectrum, the "Least Affordable Major City" title went to the New York-White Plains, NY-Wayne, NJ area for the 9th consecutive quarter.  Just 19.9% of homes are affordable to families earning the local median income, down 1 percent from last quarter.

The rankings for all 225 metro areas are viewable on the NAHB website but regardless of where you live, buying a home is as affordable as it's ever been in history. Furthermore, because home values are in recovery and mortgage rates may rise, the market is ripe for home buyers in Oklahoma City.

All things equal, buying a home may never be this inexpensive again. If you were planning to purchase later this year, you may want to move up your time frame.

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Originally posted at Oklahoma City Real Estate Blog

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New Home Sales Drop In July -- Just Like Existing Home Sales

One day after the National Association of Realtors released the softest Existing Home Sales report since 1995, the U.S. Census Bureau released a similarly-weak New Home Sales report.

Americans bought just 276,000 newly-built homes in July. That marks the fewest units sold since the government started keeping records in 1963.

In addition, although new home inventory actually dropped 2,000 units in July, the slowing sales pace still managed to push the national supply higher by 1.1 months.  At July's rate of sales, the nation's new home inventory would be exhausted in just about 9 months.

None of this news should surprise you, though. It's all been foreshadowed for weeks.

First, Single-Family Housing Starts have dropped in every month since April.  A "housing start" is a when a home starts construction and, because fewer homes are under construction, we should expect fewer homes to be sold.

Second, Building Permits are down.  The number of new permits peaked in March and have fallen 23 percent since.

And, lastly, home builder confidence ranks at its lowest levels since early-2009. A contributing factor in that pessimism is dwindling buyer foot traffic.

Regardless, there's two sides to the story. Although the New Home Sales data looks bad for builders, it can be terrific  for you. This is because new homes are more likely to be discounted when the sales cycle favors buyers.

Coupled with ultra-low mortgage rates, the cost of buying a newly-built home in Oklahoma City may have just become cheaper.

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Originally posted at Oklahoma City Real Estate Blog

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Existing Home Sales Plummet In July; Home Buyers Gain Leverage

The number of home resales plunged by 1.4 million units in July, according to the National Association of Realtors®' Existing Home Sales report.

It's a drop of 27 percent from June; single-family home resales are at the report's lowest levels since May 1999.

Furthermore, because of the sharp drop in sales volume, home inventories are spiking.

Homes for sale nationwide fell just short of 4 million units in July and, at the current sales paces, it would take 12.5 months for the existing inventory to be absorbed.

Home supply was just 8.9 months in June.

For home sellers in Oklahoma City , the Existing Home Sales report is a bit of bad news.  Fewer sales and larger inventories put negotiation leverage in the hands of the buyers which, in turn, creates downward pressure on home prices.  It may also increase time-on-market.

For home buyers, however, the data is decidedly welcome. After a stimulus-driven spring buying season that favored sellers, the summer and early-fall market seem to favor buyers. More choices and more leverage is a positive.

It helps that home affordability is up, too.

Although there's reports that home values are rising, their modest gains are more than countered by the ongoing rally in mortgage rates. Freddie Mac says that 30-year fixed rate mortgage rates are at their lowest levels in history and, at today's rates, every one-eighth drop in mortgage rates roughly offsets a 1.5% increase to home price.

Mortgage rates are down 0.75 percent since mid-April.

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Originally posted at Oklahoma City Real Estate Blog

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