Mortgage Rates Hit an All-Time Low
Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.
Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.
Source: Washington Post, Dina ElBoghdady (06/25/10)
Fed: Interest Rates to Stay at Record Low Levels
In the wake of a slowing real estate market, the Federal Reserve said Wednesday that the economy is “proceeding” and pledged to hold interest rates at record low, near zero rates.
One piece of good news, released simultaneously with the Fed’s report, was a survey of CEOs of large U.S. companies, 39 percent of whom said they expect to increase the number of people on their payrolls in the second half of 2010.
Source: Associated Press, Alan Zibel (06/23/2010)
Some experts are saying that the next big real estate problem could be a shortage of homes.
Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.
In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.
"The decline in household formation is artificial," says James Gaines, a real estate economist with Texas A&M. "The young are moving in with their parents. There's even doubling up among working-class people. There's a pent-up demand coming if and when the economy recovers."
Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.
Source: CNNMoney.com, Les Christie (06/15/2010)
It’s true. Men aren’t looking for exactly the same things women are when they go home shopping.
ZipRealty surveyed 1,000 home shoppers and concluded that while about an equal number of men and women sought green features – about 27 percent – and 35 percent of both sexes put a high priority on a home office, there is disparity in the desire for other features.
Both sexes did agree on the biggest turn-offs: structural damage, bad odors, a busy street, and an awkward floor plan.
Here are the top 10 features most desired by men:
1. Garage or designated parking space, 85.5 percent
2. Master suite, 79.8 percent
3. Ample storage space, 71.2 percent
4. Guest bedroom, 70.2 percent
5. Large closets, 64.2 percent
6. Outdoor entertainment area, 63.4 percent
7. Gourmet or updated kitchen, 59.1 percent
8. Breakfast room or eat-in kitchen, 55.2 percent
9. View, 44.5 percent
10. Large yard, 43 percent
Here are the top 10 features most desired by women:
1. Garage or designated parking, 87.7 percent
2. Master suite, 77.8 percent
3. Ample storage space, 72.7 percent
4. Large closets, 68.7 percent
5. Outdoor entertainment area, 64.2 percent
6. Guest bedroom, 63.9 percent
7. Gourmet or updated kitchen, 61.8 percent
8. Breakfast room or eat-in kitchen, 56.1 percent
9. Large yard, 43 percent
10. Wood floors, 40.9 percentSource: ZipRealty.com (06/10/2010)
Fewer Borrowers Fail to Pay Their Mortgages
The number of U.S. borrowers failing to pay their mortgages has fallen significantly in the last few months, according to RBS Securities Inc.
Of borrowers with subprime loans wrapped into bonds issued in 2007 who had never previously missed a payment, an average of 2.6 percent failed to pay at least once in March, April or May. That’s a drop from 3.7 percent in February and a 15 percent decline after seasonal adjustments, RBS calculates.
“We believe that the last few months’ performance points to a fundamentally positive shift in borrower behavior,” Paul Jablansky, Desmond Macauley, and Ying Wang, analysts at the Royal Bank of Scotland, wrote in a June 8 report.
Source: Bloomberg, Jody Shenn (06/10/2010)
Survey: Economists Forecast Growth
Economists surveyed by The Wall Street Journal forecast slow but steady economic growth through the middle of 2011.
The key to economic growth will be increased employment, but economists say that the decrease in joblessness will be slow, falling from an employment rate of 9.7 percent now to 8.6 percent by the end of December 2011.
Meanwhile, Federal Reserve Chair Ben Bernanke, speaking to the U.S. House Budget Committee, wouldn’t deny the possibility of a double-dip recession, but he said that it appears to the Fed that “the recovery has made an important transition from being supported primarily by inventory dynamics and by fiscal policy toward a recovery being led more by private final demand."
Source: The Wall Street Journal, Phil Izzo (06/09/2010)
Will Technology Hurt Buy-Side Practitioners?
Visual marketing tools entrepreneur Alex Zoghlin, CEO of VHT Inc., asks real estate professionals a tough question: Do buy-side practitioners really deserve half of the commission paid by the seller if buyers are doing most of their research online?
“[Equally splitting the commission] worked great 15 years ago," Zoghlin says. However, he maintains that buy-side practitioners have been overshadowed by technology that leads sellers to properties and helps them make decisions.
VHT is testing a search-engine optimization platform that will allow a potential buyer to type a few key search terms — three bedrooms, big yard. The results that pop up will link to local real estate brokerages instead of aggregator site like Trulia or Zillow. The software also returns local results when an exact address is typed in.
Source: Chicago Tribune, Mary Ellen Podmolik (06/11/2010)
30- and 15-Year Rates Move Down
Home-mortgage rates fell this week along with bond yields, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.72 percent, down from 4.79 percent a week ago; while rates on 15-year fixed-rate mortgages fell to another record low of 4.17 percent from 4.2 percent.
Also, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.92 percent, down from 3.94 percent last week. Finally, one-year Treasury-indexed ARMs fell to a new six-year-low of 3.91 percent, compared with 3.95 percent a week ago.
Source: Wall Street Journal, Nathan Becker (06/11/10)
How to Buy a Home in Under an Hour
The next technological trend in the real estate world will be the ability to buy property in little more than an hour, predicts Pat Lashinsky, CEO of ZipRealty.
Lashinsky foresees it working something like this:
1. A home shopper drives by a property and calls a practitioner on his cell phone.
2. The practitioner qualifies the buyer through banking contacts, then sends him an electronic key that allows him to tour the home.
3. An electronic tracking system monitors his tour while the practitioner answers questions via cell phone.
4. Closing will be managed through an electronic meeting.
Lashinsky believes the real estate industry has been slow to embrace change, but customers will demand it. “Those [practitioners] who don’t make it happen are going to fall by the wayside,” he says.
Source: Orange County Register, Jeff Collins (06/08/2010)
FHA Delinquencies Decline for Third Month
For the third consecutive month, the number of delinquent home mortgages insured by the Federal Housing Administration has declined.
The delinquency rate is still high – 8.5 percent in April – but that is down from 9.4 percent in January.
The FHA was unwilling to applaud this as good news. "We're not declaring victory by any stretch," says David Stevens, the FHA's commissioner. "There's plenty of room for caution."
But outside analysts were more positive. "It's a very important trend to the extent that we're not continuing to get worse," says Thomas Lawler, an independent housing economist in Leesburg, Va.
Source: The Wall Street Journal, Nick Timiraos (06/07/2010)
Mortgage Rates Close in on Record Lows but may not be Low for Long...According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 4.78 percent for the week ending May 27, down from the week earlier when it averaged 4.84 percent.
Last year at this time, the 30-year rate averaged 4.91 percent. Rates have not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.
“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively."
Nothaft says the latest information from Freddie Mac’s repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end.
Meaning the record-setting low mortgage rates may not be around long.
Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgages, said Stephen Stanley, chief economist at Pierpont Securities LLC.
The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared to a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.
In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.
“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” said Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who formerly worked at the Fed in Washington.Source: Freddie Mac
Source: Bloomberg, By Bob Willis and Anthony Feld (05/28/2010)
Mortgage Rates Hit an All-Time Low
