From the Washington Post today we have this…
Mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks as concerns grow that the economy is weakening.
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From the Washington Post today we have this…
Homeowners who had mortgages modified recently are faring better than those who did so earlier in the housing crisis, according to a report released Tuesday, possibly debunking predictions of a huge wave of defaults to come.
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RISMEDIA, August 27, 2010—Mortgage rates moved lower this week, with the average conforming 30-year fixed mortgage rate now 4.59%, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.38 discount and origination points.
To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.
The average 15-year fixed mortgage retreated to 4.08%, and the larger jumbo 30-year fixed rate slipped to a new record low of 5.22%. Adjustable rate mortgages were lower this week, with the average 5-year ARM inching lower to 3.85% and the average 3-year ARM slipping to 4.13%.
A larger than expected decline in July home sales fueled more worries about the path of the economy and fears of deflation. Economic growth and deflation concerns are the two catalysts behind the notable declines in mortgage rates since Spring. From a refinancing or home purchase standpoint, fixed mortgage rates offer very affordable payments. Would-be borrowers are still reluctant given the weak job market, lack of home equity and higher down payment requirements.
The last time mortgage rates were above 6% was Nov. 2008. At that time, the average rate was 6.33%, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.59%, the monthly payment for the same size loan would be $1,024.09, a savings of $191 per month for a homeowner refinancing now.
Survey Results
30-year fixed: 4.59% – down from 4.63% last week (avg. points: 0.38)
15-year fixed: 4.08% – down from 4.11% last week (avg. points: 0.40)
5/1 ARM: 3.85% – down from 3.95% last week (avg. points: 0.31)
For a full analysis of this week’s move in mortgage rates, go to www.bankrate.com.
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From the Baltimore Sun today we have this…
Relief could be fleeting, as odds of double-dip recession mount
Fewer Maryland homeowners were behind on their mortgages or on the brink of foreclosure this spring, a welcome improvement but one that faces strong headwinds from an uncertain economy.
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From the Baltimore Sun today we have this…
Many things influence home prices. Demand or lack of it. Supply — too much, too little, just right. Building-material costs. Land values. Zoning rules.
When it comes to price averages, though, it’s useful to remember that they can move in mysterious ways that don’t necessarily reflect what any actual homeowners are seeing in their own values.
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Washington, August 24, 2010
Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors®.
Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.
Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.
The national median existing-home price2 for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.3
“Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”
Total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply4 at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said there are great opportunities now for buyers who weren’t able to take advantage of the tax credit. “Mortgage interest rates are at record lows, home prices have firmed and there is good selection of property in most areas, so buyers with good jobs and favorable credit ratings find themselves in a fortunate position,” she said.
A parallel NAR practitioner survey shows first-time buyers purchased 38 percent of homes in July, down from 43 percent in June. Investors accounted for 19 percent of sales in July, up from 13 percent in June; the balance were to repeat buyers. All-cash sales rose to 30 percent in July from 24 percent in June.
Single-family home sales dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 percent below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. The median existing single-family home price was $183,400 in July, which is 0.9 percent above a year ago.
Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago.
Existing condominium and co-op sales fell 28.1 percent to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 percent below the 605,000-unit level in July 2009. The median existing condo price5 was $176,800 in July, down 1.7 percent from a year ago.
Regionally, existing-home sales in the Northeast dropped 29.5 percent to an annual pace of 620,000 in July and are 30.3 percent lower than a year ago. The median price in the Northeast was $263,800, up 4.8 percent from July 2009.
Existing-home sales in the Midwest fell 35.0 percent in July to a level of 800,000 and are 33.3 percent below July 2009. The median price in the Midwest was $151,600, down 2.8 percent from a year ago.
In the South, existing-home sales dropped 22.6 percent to an annual pace of 1.54 million in July and are 19.8 percent below a year ago. The median price in the South was $156,300, down 3.3 percent from July 2009.
Existing-home sales in the West fell 25.0 percent to an annual level of 870,000 in July and are 23.0 percent below a year ago. The median price in the West was $224,800, up 3.3 percent from July 2009.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for 20 select metropolitan statistical areas, which is posted with other tables at: www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3Distressed sales, first-time buyer and investor data are from a survey for the Realtors® Confidence Index, scheduled to be posted September 2.
4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).
5Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for August will be released September 23. The next Pending Home Sales Index is scheduled for September 2; release times are 10 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
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RISMEDIA, August 24, 2010—Bolstered by favorable interest rates and low house prices, housing affordability remained near its highest level nationwide for the sixth consecutive month since the series was first compiled nearly two decades ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
The HOI indicated that 72.3% of all new and existing homes sold in the second quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the second quarter was slightly more affordable than the previous quarter and almost equaled the record-high 72.5% set during the first quarter of 2009. Until 2009, the HOI rarely topped 67% and never reached 70%.
“Homeownership is within reach of more households than it has been for almost a generation,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery.”
Syracuse, N.Y., was the most affordable major housing market in the country, edging out Indianapolis-Carmel, Ind., which had held the top ranking for nearly five years. In Syracuse, 97.2% of all homes sold were affordable to households earning the area’s median family income of $64,300.
Also near the top of the list of the most affordable major metro housing markets were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; and Buffalo-Niagara Falls, N.Y.
Among smaller housing markets, the most affordable was Springfield, Ohio, where 96.6% of homes sold during the second quarter of 2010 were affordable to families earning a median-income of $56,800. Other smaller housing markets near the top of the index included Mansfield, Ohio; Bay City, Mich.; Monroe, Mich.; and Lansing-East Lansing, Mich., respectively.
New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation as its least affordable major housing market during the second quarter of 2010. There, 19.9% of all homes sold during the quarter were affordable to those earning the New York area’s median income of $65,600. This was the ninth consecutive quarter that the New York metropolitan division has occupied this position.
The other major metro areas near the bottom of the affordability scale included San Francisco-San Mateo-Redwood City; Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; and Honolulu, all metro areas that have lingered among the bottom rankings for several quarters.
San Luis Obispo-Paso Robles, Calif., was the least affordable of the smaller metro housing markets in the country during the second quarter. Others near the bottom included Santa Cruz-Watsonville, Calif.; Ocean City, N.J; Santa Barbara-Santa Maria-Goleta, Calif.; and Napa, Calif.
For more information, visit www.nahb.org.
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RISMEDIA, August 24, 2010—(MCT)—Just as the housing market recovery has stalled, so has President Barack Obama’s main program to ease home foreclosures.
Only 36,695 homeowners received permanently lowered mortgage payments in July 2010 through the much-criticized Home Affordable Modification Program, the smallest increase since December, administration officials said recently.
And the number of people dropping out of the program continued to soar. Overall, nearly half the homeowners who entered the program since it launched in March of last year have dropped out.
Many had hoped the $75 billion program would be a silver bullet to the foreclosure problem, but it’s turned out to be a dud, said independent banking analyst Bert Ely. That’s not surprising, he said, given the depth of the housing market crash and recession, combined with a slow recovery.
“Even with a substantial reduction in mortgage payment and even some reduction in principal, you still have people who are over their head financially because of their reduced financial circumstances,” Ely said. “Isn’t it time to just rethink this whole business of modification and let the market clear through foreclosures and short sales?”
So far, 434,716 homeowners nationwide have received permanent modifications since the program began last year. The pace had picked up significantly starting in December after administration officials began pressuring mortgage servicers to convert more three-month trials under the program into permanent modifications.
The number of permanent modifications nearly tripled from January to May. Even in June, the administration reported that more than 50,000 new permanently modified mortgages were added. July’s slowdown in the program’s growth comes amid a struggling real estate market.
During the second quarter of the year, there were a record 269,952 home foreclosures, up 38% from the same period a year earlier, according to Irvine research firm RealtyTrac.
“While there has been some stabilization in the housing market, it remains clear that we have more work ahead,” said Raphael Bostic, an assistant secretary at the Department of Housing and Urban Development.
The Obama administration program provides cash incentives to servicers to modify mortgages. Homeowners who qualify first get a three-month trial modification with lower payments. If they make those payments, the modification can be made permanent. Only at that point does the servicer get the incentive payment.
The administration’s stated goal was to modify 3-4 million mortgages through 2012.
The pace of new, temporary mortgage modifications under the program slowed in July, increasing just 1.3% to 1.3 million. Overall, about 47% of trial modifications started since the program began have been canceled. In addition, 12,912 permanent modifications have been canceled, mostly because the homeowner missed at least three straight payments.
Increasing numbers of cancellations were the latest problem for the administration’s modification program, which has been plagued by complaints from homeowners of bureaucratic runarounds by servicers, including lost paperwork and unreturned phone calls.
Herbert M. Allison Jr., the Treasury Department’s assistant secretary for financial stability, said the administration expected cancellations to continue as mortgage servicers work through earlier modifications that were made without documentation. Those stated-income modifications were needed last year because so many people were in need of quick foreclosure assistance, he said.
Many of the homeowners who got those early modifications under the program were removed because it turned out they “did not meet the qualifications for various reasons, such as income levels or the fact that they were not in the home itself,” Allison said.
But many of those who were canceled out of the program have been helped by modifications made outside of the Obama administration program.
For the eight largest mortgage servicers, including Bank of America, CitiMortgage and Wells Fargo Bank, 45% of homeowners whose trial modifications were canceled received an alternative modification. Wells Fargo reported recently that 87% of the 520,399 active modifications it had done from Jan. 1 to July 31 were through its own programs.
Administration officials said the housing market had stabilized significantly since Obama took office in January 2009, and stressed that homeowners with permanent modifications had a median payment reduction of 36%, or more than $500 a month.
But Bostic said administration officials are not “in happy land” and that the market was not yet “out of the woods.”
Ely said one flaw with the administration’s modification program is that it does not adequately take into account all the other debts faced by homeowners. “There’s been this hype that you could wave a magic wand, change a few things with the mortgage payment and everything would be hunky-dory,” Ely said. “It’s not playing out this way.”
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From the Washington Post today we have this…
Q: I’m starting to hear about lenders that are offering 3.85 percent and even 3.75 percent on a 15-year mortgage, which makes me think it might be time to refinance. How do I find a good and trustworthy lender?
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From the Washington Post today we have this…
Mortgage rates fell this week to the latest in a series of record lows amid concerns about the state of the U.S. economy, according to a survey released Thursday by Freddie Mac.
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