Weekly Mortgage News from Castle Bank - Get Pre-Approved TODAY!

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Are you currently renting and have thought or are thinking of buying your dream home?  Call or text me at (630) 669-2401 and let me and my Dream Team help you.  IHDA still has a remaining catalog of home ownership programs that will  continue to be available, offering down payment assistance, lower credit score requirements, competitive interest rates and significant tax savings for first-time and repeat buyers throughout Illinois. Call or text me at (630) 669-2401 TODAY for more information.

Here's The Weekly Mortgage News from Kara Morris, Castle Bank.  Kara possesses the extensive knowledge and experience to find a financing option that best fits your needs. She offers the friendly customer service you deserve with the professionalism needed to close your loan on time. Whether you are buying or refinancing, Kara looks forward to working with you and assisting with your home financing needs.

Kara Morris is also on my Dream Team and has helped many of my clients get Pre-Approved.

You can call or text her at 630-877-4663.  Let her know Monica recommended you call.  

After she pre-approves you, call or text me at (630) 669-2401 so we can start this incredible journey of finding your Dream Home!  

If you have any questions or need additional information, please feel free to call or text me at (630) 669-2401.  My Dream Team and I are here for you!!!


Weekly Mortgage News



Today's Conventional Loan Rates

15 Year Fixed

3.250 %*

3.330 %* APR

30 Year Fixed

4.000 %*

4.046 %* APR

Today's FHA/VA Loan Rates

15 Year Fixed

3.375 %*

4.895 %* APR

30 Year Fixed

3.375 %*

4.895 %* APR



Kara Morris

Office: 630-466-5016

NMLS ID#: 852775
36 E Galena Boulevard 
Sugar Grove, IL 60554

Market Commentary

The Year That Was; The Year That Will Be

Our 2014 outlook for the housing and mortgage markets wasn't perfect, but it was close.

At the beginning of the year, we thought we would see a slowdown in home-price appreciation. That's been the case when you look at the national numbers. The rate of appreciation today compared to a year ago has slowed appreciably. The market has returned to single-digit year-over-year gains. This is good news, because we're returning to historical – and sustainable – appreciation rates. 

Twelve months ago we also thought we'd see a pick up in the labor market and in economic growth. That, too, has occurred. The economy continues to generate 200,000-or-more new jobs each month. This is no surprise when you consider that the economy itself has picked up pace and is growing at a rate unseen for nearly eight years. 

Lest we puff out our chest too much, mortgage rates were our big miss. That lending rates are this low given current job growth and economic activity seems implausible. Surely, strong growth would lead to rising rates, but it hasn't. Mortgage rates are lower today than they were a year ago. We were calling for 5% on the 30-year fixed-rate loan heading into the waning days of 2014. We are nowhere near that; sub-4% on the 30-year loan is the going rate. 

As for the future, we like what we see. 

We think price appreciation will continue to moderate in more markets, though we think price appreciation will prevail. Overall, the market will continue to push ahead. 

We are confident housing prices will continue to move forward because the economy will continue to move forward. Reasonable estimates have U.S. gross domestic product (GDP) growing just above 3% in 2015. Based on these estimates, we think job creation will continue at a robust pace – at least at a pace of 200,000+ new jobs per month through the first half of next year. 

Whether rising economic activity will lead to more sales activity is tougher to discern. We think it will... if we see more interest in the lower-price market segment. There is still a dearth of activity among the younger demographics. If younger buyers return, then 2015 could turn out to be the best year in sales volume since before the 2009 recession. 

But could rising mortgage rates spoil the party? 

They could, though given recent statements, the Federal Reserve is in no hurry to see rates rise. Therefore, we think rates will remain muted through at least the first quarter of 2015. 

Then again, we offer a caveat: Markets are anticipatory entities. Rates will start moving higher long before the Fed officially begins to raise rates. Scuttlebutt moves markets. 

A year ago, we were bullish on housing, and we were right to be so. Our stance hasn't change, and we don't expect it will for some time. Bottom line: we like this market, and we remain bullish. 

Economic Calendar


Date and Time



S&P/Case-Shiller Home Price Index (October)

Tues., Dec. 30, 9:00 am, ET

4.5% (Year-Over-Year Increase)

Important. Price growth is trending lower, and it should continue to do so into 2015.

Consumer Confidence Index (December)

Tues., Dec. 30, 10:00 am, ET

94 Index

Important. Rising confidence points to sustainable economic growth.

Mortgage Applications

Wed., Dec. 31, 7:00 am, ET


Important. Purchase activity remains muted, but new government initiatives could spur demand.

Pending Home Sales (November)

Wed., Dec. 31, 10:00 am, ET

103.5 Index

Important. Sales remain flat, and will likely remain flat into early 2015.

Real Estate or Stocks? 

The question of real estate or stocks was recently presented by CNBC. Unfortunately, they didn't get the answer right because they didn't get the question right. They compared residential owner-occupied real estate with publicly traded stocks. The two are not alike: one is an investment and one isn't. 

Though frequently referred to as an investment, residential owner-occupied real estate is really an asset. There is a distinction. An investment is expected to generate cash flow. An asset that is not an investment doesn't generate cash flow. Nevertheless, both can appreciate. 

That said, residential real estate can be an investment, and frequently is. If it is bought as rental property, it will generate periodic cash flow. It will also generate terminal cash flow, at the end of the holding period, such as when bought to flip. 

Returning to CNBC, they compared home prices to an S&P composite stock index dating back to 1890. Stock prices have increased 2.03% on average annually since then. Home prices have increased 33 basis point annually. It appears stocks win. 

The comparison is misleading. If the comparison were residential real estate investments – rentals and flips – real estate would compare much more favorably. When treated properly as an investment, residential real estate bought to rent holds up well compared to stocks. 

So residential real estate or stocks? 

It depends. If you need a home in which to live, the long-term return won't be as good as a broad-based index of stocks. Then again, we all need a place to live. The good news is that maintained owner-occupied real estate appreciates over time. The same can't be said for most other assets – cars, clothes, furniture, and jewelry. As for rent, it always goes up. 

The right answer is that it can be worthwhile to own residential real estate as an abode and as an investment. And, yes, it can also be worthwhile to own stocks.


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*Rate as of Monday, December 29, 2014. Approval and terms subject to credit qualifications, loan amount and property value. Rates will vary by term. Some limitations apply. See a Castle Bank Mortgage Loan Officer for details.

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Monica Mancano

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