30-Year Fixed Mortgage Rate Dips to 4.77%

By: Reuters

 

Rates on fixed mortgages dipped this week after rising steadily over the last two months.

Freddie Mac said Thursday the average rate on the 30-year mortgage dropped to 4.77 percent from 4.86 percent the previous week. It hit a 40-year low of 4.17 percent in November.


The average rate on the 15-year loan slipped to 4.13 percent from 4.20 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.

Rates have been rising since November. Investors have shifted money out of Treasurys and into stocks. Many expect the tax-cut plan will fuel economic growth and increase inflation. Yields tend to rise on inflation fears.

Mortgage rates tend to track the yield on the 10-year Treasury note. Those rates have been fluctuating in recent weeks.

Low mortgage rates did little to boost home sales last year and higher rates now could hamper a robust recovery.

The number of borrowers who applied for a mortgage in December was 10 percent below the same month in 2009, according to Capital Economics. Refinance activity has dropped off 44 percent since rates hit their lows. The number of purchase applications has been rising along with sales, but last year's sales pace was shaping up to be the slowest in 13 years.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage slipped to 3.75 percent from 3.77 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

The average rate on one-year adjustable-rate home loans fell to 3.24 percent from 3.26 percent.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year and 15-year loans in Freddie Mac's survey was 0.8 point. The average fee for the five-year ARM was 0.7 point, and the fee for the 1-year ARM was 0.6 point.

Published: Thursday, 6 Jan 2011,12:55 PM

Real Estate Outlook: Builders Regain Optimism

by Carla Hill

As we enter the new year, builders are seeing many area market conditions returning to normal.

National Association of Home Builder's chairman, Bob Jones, reports that "we are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward. But first they need access to financing to build, which remains scarce during this critical phase of the recovery.”
 
Additionally, single-family home sales have risen by 5.5 percent. Theses new figures from the U.S. Commerce Department showed a partial bounce-back from sales in October.
 
This rise is attributed to sales increases in both the South, the nation's largest housing market, which saw a 5.8 percent gain, and the West, which saw an impressive 37.3 percent rebound over October.
 
The inventory of new homes for sale is now at an 8.2-month supply, at 197,000 units. According to the NAHB, this is the first time in 42 years the inventory has fallen below the 200,000 level.
 
NAHB's Jones reports that "while builders continue to face a great deal of competition from short-sale and foreclosure properties, the improvement registered in new-home sales in November is a good sign."
 
He continues that "with consumer interest in new homes expected to continue to revive as the economy and job markets improve, and inventories of new homes for sale near record lows, our concern now is that a lack of construction financing will keep builders from being able to expand the selection of what they have to offer buyers heading into the spring.” 
 
In other news this week, the recently signed HR4853, otherwise known as the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, will extend Bush era tax brackets and a capital gains tax rate of 15 percent through 2011 and 2012.
 
It will also extend numerous energy efficiency credits through December 31, 2011 -- the Energy Efficient New Homes, Energy Efficient Existing Homes, and Energy Efficient Building credits.

Published: January 3, 2011

Massive Housing Data Dump Lends No Clarity - CNBC

Massive Housing Data Dump Lends No Clarity - CNBC

Realty Times - Curb Appeal Projects Remain Cost-Effective

Realty Times - Curb Appeal Projects Remain Cost-Effective

What Could Force More Short Sales

By: Diana Olick
CNBC Real Estate Reporter

Despite a government program designed to streamline and incentivize the process, short sales have not even come close to keeping up with foreclosure sales.

That may be about to change.

If banks see higher losses from foreclosures than from short sales, they may put more resources into approving these deals, where the borrower is allowed to sell the home for less than the value of the loan.

"Loss severities on distressed U.S. residential mortgage loans are likely to increase an additional 5-10 percent from current levels due to higher loss mitigation and foreclosure expenses and weakening home values," according to a report from Fitch Ratings.

Fitch: The anticipated increases for each sector’s average loss severities are expected to be as follows:

• Prime loans: currently 44%, increasing to 49%-54%;
• Alt-A loans: currently 59%, increasing to 64%-69%;
• Subprime loans: currently 75%, increasing to 80%-85%.

We are already seeing home prices double dip in many markets, and that is expected to continue at least through the first half of 2011. One way to mitigate the losses is through short sales. "Short sales generally experience recovery rates about 10 percent higher than foreclosure sales," according to Fitch.

Will this be enough to push the banks? Unclear.

Servicers actually rake in a lot of money from fees surrounding foreclosures, and so far the government's "Home Affordable Foreclosure Alternative," program, which pays servicers cash incentives for doing short sales, has had pretty poor results, really still in the hundreds of loans. Second liens pose a big problem, but many big bank servicers also hold the second liens.

It's all about where the math comes out. If home prices fall far enough, the equation may tip from foreclosure to short sale.

Published: Friday, 17 Dec 2010 | 1:02 PM ET

Realty Times - Most Say it's a Good Time to Buy

Realty Times - Most Say it's a Good Time to Buy

Unexpected Cities See More Homes Go Back to the Bank

TALK TO ME BEFORE THIS HAPPENS TO YOUR HOME - THERE ARE OPTIONS FOR YOU!

By: Diana Olick
CNBC Real Estate Reporter


Yes, the four states that we always talk about are still leading the nation in foreclosure rates. Okay, Florida, California, Arizona, Nevada...if you've been trapped under something heavy for the past few years. But for the past few months a new trend is emerging, and some numbers released today really put it into perspective.

Foreclosure "actions" in Q3, which include anything from default notices to bank repossessions, rose in 65 percent of the nation's top 200 housing markets.

In Seattle, they jumped 71 percent, in Chicago up 35 percent and big double-digit jumps in Houston and Atlanta too.

These are not cities that saw enormous price jumps during the housing boom (maybe Seattle, but not the others) and they definitely did not see the kind of investor activity that the fab four saw during housing's heyday.

Not in the general release, but in a little side-bar that Realty Trac sent me, you see really big jumps in bank repossessions, which are the final stage of foreclosure when the bank takes the house back and evicts you. Quarter to quarter, Seattle saw a 65 percent jump, Philadelphia a 38 percent jump, Boise, ID up 71 percent and even Richmond, VA taking a 28 percent leap. One word: Unemployment.

Of course the logical question next is, what happens to home prices in those cities, as foreclosures hit the for-sale inventory.

Sure, there are buyers out there looking for deals, but with the foreclosure robo-mess hanging over the market, some sales frozen, some not, there's not a whole lot of buyer confidence out there to take the leap into the "distressed" market.

That just means the prices on those homes have to go lower.

Published: Thursday, 28 Oct 2010 12:43 PM ET