UCLA forecasts California housing recovery next year

'California real estate markets are either still in the trough or still declining towards it,' and unemployment won't hit single digits till mid-2013, UCLA report says.

Despite quickening home sales and rising prices in some parts of California, the state's housing market won't begin a full-fledged recovery until next year, economists at UCLA predict.

A dearth of residential construction remains a huge drag on the state's economy, according to the quarterly UCLA Anderson Forecast, while sales of distressed properties still dominate the market.

"The data is just not telling me that the market has turned or is on the verge of turning," said senior economist Jerry Nickelsburg. His report noted that "California real estate markets are either still in the trough or still declining towards it."

It's a big reason that UCLA predicts California's unemployment rate, which stood at 10.8% in May, won't hit single digits until the middle of next year.

The good news is that California's housing market is expected to pick up steam in the next few years. UCLA forecasts a dramatic rise in building permits in 2014 to 130,000 — double the U.S. rate.

"Twelve more months of solid gains in California and working through excess inventory, and we should be ready" to declare a housing recovery, Nickelsburg said.

The state's job outlook hasn't changed much from previous forecasts, despite 10 straight months of employment growth and a surprisingly strong May in which California employers added nearly 34,000 jobs. UCLA predicts continued slow and steady gains through the remainder of 2012, with faster growth beginning in 2013.

The unemployment rate is expected to average 9.7% next year, falling to an average of 8.3% in 2014.

The forecast also cast doubt on the possible economic impact of the proposed high-speed rail project that would run from San Francisco to Los Angeles.

The California High-Speed Rail Authority has contended the project would create 100,000 construction jobs and an additional 450,000 jobs in the broader state economy over the next 25 years.

To substantiate that, the UCLA economists looked to Japan, where high-speed rail has been in place for decades. They concluded that although development sprang up around new rail lines, much of the activity simply moved from other places.

"There may be good reasons to invest in [high-speed rail] but the economic argument, the jobs argument, does not seem to stand on very solid ground," the report said.

Nationally, the U.S recovery will continue its slow plod, according to the forecast. The U.S. will not regain all jobs lost during the Great Recession until the end of 2014, in part because so many workers have been permanently displaced, said Edward Leamer, director of the Anderson Forecast, in the report.

He said many jobs have gone overseas or havebeen automated, creating millions of excess workers in sectors including manufacturing, construction and retail.

Leamer said the solution is workforce development.

"Good jobs in the United States in the 21st century will require humans to do things that are not suited to the capabilities of faraway foreigners, robots or microprocessors. We need a workforce that can think creatively and solve the new problems, not merely recall the solutions to old problems," Leamer wrote.

UCLA projects GDP growth this year to be a sluggish 2.2%, and slightly higher next year, at 2.4%. They project the nation's unemployment rate will average 8.2% this year and 7.9% in 2013. ricardo.lopez2@latimes.com

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit First Capital Online or call: 310-458-0010

30-year fixed mortgage fell last week to record low

Rate on 30-year mortgage falls to record-low 3.66 percent

WASHINGTON — The average U.S. rate on a 30-year fixed mortgage fell last week to a record low for the seventh time in eight weeks. Cheap mortgages have helped drive a modest recovery in the weak housing market this year.

Mortgage buyer Freddie Mac said Thursday the average on the 30-year loan dropped to 3.66 percent. That’s down from 3.71 percent the previous week and the lowest since long-term mortgages began in the
1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.95 percent. That’s down from 2.98 percent the prior week and just above the record 2.94 percent reached three weeks ago.
The rate on the 30-year loan has been below 4 percent since December.

Low rates could provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

Still, the pace of home sales remains well below healthy levels. Sales of previously occupied homes dipped in May to a seasonally adjusted annual rate of 4.55 million, although they are up from the same month last year.

Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.

The U.S. economy is growing only modestly and job creation slowed sharply in April and May. U.S. employers created only 69,000 jobs in May, the fewest in a year.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increases, the yield falls.

And the yield will likely fall even lower now that the Federal Reserve has said it will continue selling short-term Treasurys and using the proceeds to buy longer-term Treasurys. That goal of the program is to drive long-term interest rates lower to encourage more borrowing and spending.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from the previous week. The fee for 15-year loans was 0.6 point, down from 0.7.

The average rate on one-year adjustable rate mortgages fell to 2.74 percent from 2.78 percent the prior week. The fee for one-year adjustable rate loans was unchanged at 0.5 point.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010

California Home Sales Continue to Rebound

-- Has the U.S. housing industry finally turned the corner?

Possibly, but don't bet your three bedroom ranch on it. At least not yet.

Recent indicators do point to a rebound. The latest positive data, from the California Association of Realtors, shows that pending home sales in the most populous state -- and one of the states hardest hit by the economic downturn -- rose by double digits from May 2011 to May 2012.

May was the fourth-straight month of double-digit housing sales gains in California, on a year-over-year basis.

California saw a 11.2% spike in home sales over the May-to-May time period, which is good news for homeowners. That's welcome news not just from San Diego to San Francisco, but all over the country. Why? Because California, given its huge population base, is widely considered a leading indicator for the entire U.S. housing market.

"Despite a slowdown in economic growth in recent months, sales in California remain strong as record low mortgage rates and favorable home prices continue to fuel demand in the housing market," said LeFrancis Arnold, CAR's president, in a release. "The strong results in pending sales -- double-digit year-over-year gains in the last nine out of 10 months -- suggest solid housing market performance for the state in the upcoming months."

California realtors aren't alone in taking a bullish stance on housing. 

The Commerce Department data on new home sales released on Monday showed a 7.6% rise in May from April, or 369,000 homes. It was the best month for new homes sales since April 2010 when the expiring first-time homebuyer tax credit was nearing expiration leading to increased, albeit short-term, buying.

Recent National Association of Realtors data and commentary has been similarly encouraging.

Year-over-year U.S. home sales were up 9.6% from May 2011 to May 2012, the NAR reported. A 1.5% decline in nationwide home sales from April to May that the NAR tracked might not be cause for concern, either.

"The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand," says Lawrence Yun, NAR's chief economist. "Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier."

One reason why home prices are climbing again is an interesting one -- "home for sale" inventories are low. There are two schools of thought on this trend. Either homeowners don't want to sell in a weak market, or banks and lenders are finally making a significant dent in home foreclosures, thus taking more of those homes off the market.

"Inventory shortages in certain areas have been building all year," adds NAR's Yun. "There are broad-based shortages of inventory in the lower price ranges in much of the country except the Northeast, and in the West supply is extremely tight in all price ranges except for the upper end. Realtors in Western states have been calling for an expedited process to get additional foreclosed properties onto the market because they have more buyers than available property."

Those are all good signs for the U.S. housing market, though the sustainability of the housing rebound will be more important than any individual, albeit encouraging, data point.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010

Home Sales Thrive In O.C.

(CBS News) LOS ANGELES - We learned this week that Americans bought fewer homes in May than in April. Since sales bottomed out in 2010, existing homes sales have struggled upward. They slipped again last month, by 1.5 percent. Still, there are some bright spots, as in the case of Orange County, California.

Something is about to happen on some weed-infested 389 acres in Orange County, California, that goes against everything the nation's housing market seems to be saying.

Developers are about to build 2,000 brand news homes on that land -- luxury homes no less. Why put new homes on the market when nationwide existing home sales are in the tank?

"There's a need," said Seth Ring of Toll Bros, Inc. "Interest rates are at historic lows and I think people are tired of waiting."

It's not a hard sell. Orange Country is one of the most desirable living locations. Picky buyers who've been waiting to buy want to buy here -- a far cry from inland California suburbs where many buyers overpaid and remain underwater.
But what happens in Orange County doesn't stay in Orange County, and that's what has the rest of California hopeful.
"Orange County does come out of the recessions faster and sooner than any other part of the nation, traditionally," said realtor Gail Martin. She's busy as she was at the height of the housing boom in 2005.

"I took a buyer out to a see a home," she said. "By the time I got there, half an hour after it was on the market, it was already sold."

But while that's good for her, there's a downside. The shortage of good homes, she says, is driving some potential buyers out of the market.

Many are going for far above the asking price, which is squeezing buyers like Morgann Perry who thought 2012 was her year to take the plunge.

"Every one that I've been on the verge of, 'Oh, I love this one,' it sells so quickly," said Perry. "So it's definitely competitive."

So far, she's been outbid every time by those with deeper pockets.

"Somebody with 20 percent down is never gonna get the house over somebody with cash," admitted Martin. "We have a tremendous amount of cash coming into Orange County right now."

There's no shortage of serious buyers it seems -- just a shortage of something to buy. Which is why that empty field may be so full of promise.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010

9 Awesome Reasons to Buy a House !

Thinking about buying a house? Not sure if it's the right time for you? Buying a house is a huge decision and one that should not be taken lightly.

Many things should factor into your decision to buy a home, but if you are close to buying and just need a push in the right direction, we have compiled a list of the nine most beneficial reasons to buy instead of rent:

1. Tax Deduction Benefit - Did you know there are deductions you can claim when it comes to your home mortgage? Any interest paid on your mortgage can reduce your taxable income. At the end of every year, the company that owns your mortgage will send you a statement with how much interest you have paid on your loan for the year (Form 1098 - here is a sample of what it looks like). Bring your 1098 forms to your tax preparation professional and take advantage of the mortgage interest deduction afforded to home owners.

2. Aesthetics - Owning a home gives you the opportunity to make any changes without worrying about what your landlord would say. You can paint rooms a bright new color, change old carpeting to hardwood floors or even makeover your bathroom into spa heaven! Not only do you get to enjoy new surroundings and new things but the value of your home should increase. Building equity in your house is one the largest sources of household wealth for Americans.
3. Security - When you rent, you could be forced to leave in a year if the rent goes up or if you get noisy neighbors above or below you. With your own home, your rent won't go up (it actually could go down if you refinance) and you won't be sharing any apartment walls or ceilings with anyone noisy!

4. Better Neighborhoods - When the people you live by own their own properties, they are willing to invest more in the community, which makes it nicer and safer for families.

5. Better Economy - If more people buy homes, more money will be inserted in market. This helps create more jobs and more economic stability. Strengthening the housing industry will create many positive effects on the overall economy.

6. Higher Academic Achievement - According to HouseLogic, home ownership tends to bring about higher academic achievement in our children.

7. Improved Health - According to HouseLogic, homeowners and their families tend to be healthier than those families who rent.

8. Low Rates - Rates are at historic lows! Rates are hovering below 4 percent for 30-year fixed rate mortgages. According to FreddieMac, mortgage rates ten years ago were more than double what we are experiencing today! For information on the history of mortgage rates, click here.

9. Home Affordability - Home prices have fallen dramatically and will eventually begin to rise.  

Finance the home of your dreams - before home prices begin their inevitable ascent!

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010

Current Rates Move Lower On Today's News

Thursday's bond market has opened in positive territory due to a negative open in stocks and some weaker than expected economic news.

The stock markets are showing minor losses with the Dow down 15 points and the Nasdaq down 4 points. The bond market is currently up 13/32, but I don't believe we will see much of an improvement in this morning's mortgage rates due to weakness in trading late yesterday.

If your lender did revise their rates upward yesterday afternoon, then you should see a small improvement in this morning's pricing.

In other words, today's early rates should be very close to yesterday's morning pricing.

There were three pieces of economic data posted this morning, but none of them were considered to be highly important to the markets.

The Labor Department started them with the release of last week's unemployment figures early this morning. They announced that 387,000 new claims for unemployment benefits were filed last week, down slightly from the previous week's revised total of 389,000 initial claims. Analysts were expecting to see 380,000 claims, based on the 386,000 that was previously announced for the week before. This means that we saw a larger than expected number of new claims, indicating a weaker than expected employment sector last week. That makes the data good news for the bond market and mortgage rates.

The National Association of Realtors announced late this morning that sales of existing homes fell 1.5% last month. This was very close to analysts' forecasts, preventing it from influence mortgage rates. The fact that we saw a decline in home resales indicates a softening housing sector, which is favorable news for the bond market and mortgage rates. However, since the data nearly matched forecasts, its impact on this morning's pricing has been minimal.

May's Leading Economic Indicators (LEI) was the third and final report of the day. The Conference Board announced a 0.3% increase in the LEI, meaning it is predicting minor economic growth over the next several months. That was stronger than what many had expected, making the data negative for bonds and mortgage rates. Fortunately, this data is not considered to be highly influential, so it has had little effect on mortgage rates this morning.

Tomorrow has nothing of relevance scheduled, so look for the stock markets to influence bond trading. If we see minor losses or gains in stocks, I suspect the bond market will remain fairly calm, keeping mortgage rates close to today's levels. If stocks rally, bonds will probably suffer and mortgage rates will rise slightly. And we can expect the opposite if the major stock indexes show noticeable losses tomorrow morning. By James Brooks First Financial Services

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256

Visit FirstCapital Online or call: 310-458-0010