San Diego Moortgage Rates Update 03/04/2010

The NAR released  Pending Home Sales data this morning.

From the release:

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5.

As we all know a signed contract is just the first step in a long process these day. The hard part is qualifying and closing!

Since activity spiked over the seasonally supportive spring and summer months, before topping out in October, there has been a drastic drop off in sales contract signings. In all reality the index has returned to pre-stimulus levels.

NAR Chief economist  Lawrence Yun says he expects a turn around late this spring into early this summer.  The Pending Home Sales index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that closed existing-home sales generally lag the Pending Home Sales Index by two months.

Given the decline in signed sales contracts in January and expectations for another slow month in February (because snow was worse in Feb), Yun’s outlook for a pick up in activity sometime in late spring/early summer makes sense…especially when you add in an anticipated spike in buyer demand as the tax credit draws closer to expiration in April.

Meanwhile my wholesale lenders are issuing rates sheet in a 4.875 – 5% range for a 30 year fixed mortgage assuming 80% ltv, 740 FICO and 1 point discount.