A Quick Note

In spite of the positive real estate news we've seen across the country over the past few months, some naysayers worry about shadow inventory - homes that should be for sale but are being kept off the market by owners or banks for one reason or another.

Real estate expert Brian Buffini dismisses these concerns. He counters that even if homes are being kept off the market, there is more than enough demand to go around. New home construction dropped precipitously over the last four years. Only 630,000 new homes are expected to be built in 2012 - the same number built in 1933 when our population was about one-third what it is today.

In 104 cities in the US it's more expensive to rent than to buy, and a recent Wells Fargo research study found that the #1 goal of Echo Boomers (those 18 - 32) is to own a home. 92% said they would buy even if the home does not appreciate or even declines in value. 16 million housing units would have to be built just to meet the need for this housing demand.

We think Mr. Buffini's points are well taken. While it's true our economy continues to heal at a sometimes painfully slow pace, we believe the housing recovery is well underway.

Market Update for San Francisco*
04/22/2012 - 04/28/2012

Mortgage Update

The Labor Department’s Jobs Report for April showed that fewer than expected jobs were created. The unemployment rate dropped to 8.1% — the lowest since January 2009. However, the decline was mainly due to the labor force shrinking, rather than by robust job growth. The bottom line is that it is tough to pay down debt when there are not enough people participating in the labor force.

What’s more, the debt drama in Europe continues to escalate, as both Italy and Germany reported higher than expected unemployment rates, while Spain has slipped into its second recession since the financial crisis.

The events in Europe and potential softening of our economy have resulted in home loan rates remaining near historic lows. That means now continues to be a great time to purchase or refinance a home.

This information is provided by Ephraim Schwartz, Partner, Mortgage Consultant, CMPS. Ephraim can be reached at the O'Dette Mortgage Group, (415) 931-2129, or email him at ephraim@omglenders.com.

Mortgage Rates

Mortgage Rates as of  Tuesday, May 8, 2012
Conforming Loan Rates
30 Year Fixed	3.995%	« calculate mortgage at this rate
15 Year Fixed	3.225%	« calculate mortgage at this rate
10/1 Year ARM	3.395%	« calculate mortgage at this rate
Jumbo Loan Rates
30 Year Fixed	4.371%	« calculate mortgage at this rate
15 Year Fixed	3.585%	« calculate mortgage at this rate
10/1 Year ARM	3.599%	« calculate mortgage at this rate
Rates change daily and vary by product. They are provided here to give you a general sense of current average California rates. Your rate will vary and depends on credit and other factors. Rates are not published on weekends. Source: Topix.com