Archives for August 2011

Freddie Mac: Interest rates increase, following bond yields

Mortgage rates increased slightly during the previous week.According to Freddie Mac's Primary Mortgage Market Survey, interest rates for the nation's mortgages increased during the week ending August 25, after dipping to record lows the previous week.The average interest rate for 30-year fixed-rate mortgages during the week was 4.22 percent, which is up from 4.15 percent the previous week, but down from 4.36 percent during the same week the previous year. The rate for 15-year FRMs averaged 3.44 percent, which was up from 3.36 percent during the week prior, but below the average of 3.86 percent recorded in the previous year.”Fixed mortgage rates followed Treasury bond yields higher this week while data reports suggest an improvement in the housing market,” said Freddie Mac vice president and chief economist Frank Nothaft. “The Federal Housing Finance Agency national House Price Index rose for the third straight month in June bolstered by a 3.3 percent gain in the East North Central Census Division.”The average rates for adjustable-rate mortgages went in different directions, according to the report. The rate for five-year ARMs settled at 3.07 percent, which is down from 3.08 percent the week prior and 3.56 percent from the previous year. However, the interest rate for one-year ARMs averaged 2.93 percent, an increase from the 2.86-percent average recorded the week before the recent period, but down from 3.52 percent the previous year.With rates still affordable and the local job sector improving, the Houston real estate market may continue to record more sales throughout August and into the winter season.Courtesy of 2M Realty News

MBA: Mortgage application volume declines

THe number of mortgage applications declined recently.In its weekly report, the Mortgage Bankers Association revealed the total volume of home loan applications declined during the week ending August 19, as its Purchase Index fell to its lowest level in 15 years.The MBA's Market Composite Index declined 2.4 percent compared to the previous week on a seasonally adjusted basis, while unadjusted, it was down 2.9 percent. The Refinance Index declined as well, dropping 1.7 percent on an adjusted basis. The Purchase Index, which has continued to decrease in recent weeks, was an adjusted 5.7 percent below its previous week's level, now residing at its lowest point on record since December 1996. Unadjusted, the Purchase Index was down 7.3 percent from both the previous week and the same period during the previous year.”Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines, with purchase applications falling to a 15-year low,” said Michael Fratantoni, MBA vice president of Research and Economics.The four-week moving average for the Market and Refinance Indices were up 6.9 percent and 9.9 percent, respectively, both on an adjusted basis. The four-week average for the Purchase Index was down, however, falling an adjusted 2.6 percent.With a healthy job sector and home prices remaining relatively steady, the Houston real estate market may continue to see more mortgage applications as an increased number of consumers attempt to become homeowners.Courtesy of 2M Realty News

Existing-home sales decline during July

Existing-home sales were down in July.According to a recent report conducted by the National Association of Realtors, the monthly total of existing-home sales during July declined from the previous month, as transactions in the South and West fell.Overall, the nation's total existing-home sales declined 3.5 percent, settling at a seasonally adjusted annual rate of 4.67 million units in July, down from 4.84 million in June. However, the rate is 21 percent above the pace of 3.86 million in July 2010, which was the first month following the expiration of the federal homebuyer tax credit.”Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR chief economist Lawrence Yun.Regionaly, the Northeast recorded 2.7 percent more existing-home sales during the month, followed by the Midwest with a 1 percent increase. However, the South experienced 1.6 percent fewer sales, while existing-home transactions plummeted 12.6 percent in the West.The Houston real estate market bucked the region's trend during July, however, as a recent report from the Houston Association of Realtors showed monthly improvements in both home sales and price.Courtesy of 2M Realty News

New-home sales forecast to increase during July

New-home sales were forecast to rise during July.A recent survey of economists conducted by FactSet revealed an optimistic outlook for new-home sales during July.The panel of housing experts predicted the nation's level of new-home sales would increase to a seasonally adjusted annual rate of 315,000 during the month. Actual figures will be released by the Commerce Department on Tuesday, August 23.During June, new-home sales slipped 1 percent from the previous month to an annual rate of 312,000. This total is less than half the amount that economists believe healthy markets should be able to sell in a given month.On record, 2010 was one of the worst-performing years in terms of new-home sales, marking the fifth-straight year that sales declined, which followed a five-year period of record highs. However, year-to-date sales for 2011 currently trail the pace set at this time last year.While new-home sales only represent one-fifth of the housing market, they have a sizable impact on the economy. The National Association of Home Builders reports that for every new home built, an average of three jobs are created and close to $90,000 is generated in taxes.The Houston real estate market could stand to gain from new homes, as the region lost a number of public-sector jobs recently, according to reports.Courtesy of 2M Realty News

MBA: Mortgage delinquencies slightly up during second quarter

The national volume of mortgage delinquencies rose slightly during the second quarter.According to a recent report from the Mortgage Bankers Association, the national volume of homeowners behind on their mortgage payments slightly increased during the second quarter.Overall, the total number of delinquent mortgage loans for one-to-four-unit homes rose to 12.87 percent from 12.84 percent in the first quarter. The total is down from 14.4 percent last year, however. The quarter's percentage of delinquent home loans represents more than 6.3 million mortgages, MBA reports.The rise follows rate declines in recent quarters, which many experts attribute to the shaky economy. This now marks the second consecutive quarter recording an increase in home loan payments more than 30 days past due.MBA chief economist Jay Brinkmann cites the nation's troubled job market as the main contributor to the rising delinquency rate.”It's troubling,” said Brinkmann, who stated the quarterly increased showed “the ultimate impact of the inability to get sustained growth in the jobs market.”According to Brinkmann, the first step to fixing the nation's housing market, which is full of foreclosures causing home prices to drop, is to “stop the bleeding … [which] in this case is the delinquencies.”The Houston real estate market, which has been helped by a steady job sector, has conducted a number of foreclosure sales this summer. According to a recent report from the Houston Association of Realtors, foreclosures represented 19.6 percent of all property sales in July.Courtesy of 2M Realty News?

‘Long, cold winter’ ahead for nation’s housing sector

The national housing market may face a tough winter period, based upon weak summer statistics.According to a recent report from Altos Research, the nation's housing sector did not perform well during the summer, which may be a signal for an underwhelming winter season.The report explains that, despite record-low interest rates for home loans and an increased inventory nationwide, property sales did not show major improvements. Now, based upon these summer statistics, as well as the current state of the economy, the country may be in for a “long, cold winter” in terms of home sales.Altos' Mid-Cities Report showed home prices during July rose in 14 of the 20 metro areas it analyzed, while inventory increased in 12 markets.”This is the first time we have experienced the current combination of low interest rates, high unemployment, and a glut of inventory hiding in the shadow,” Altos stated. “The housing market in the United States is in a constant state of flux. Volatility is the norm and the rules of yesterday's market no longer apply.”The median price for these cities during July was $256,120, which was slightly up from June. By comparison, the median price for Houston properties during July was $224,110, which was an all-time high for the month, the Houston Association of Realtors reports.Courtesy of 2M Realty News

Report: National shadow inventory decreasing

The nation's shadow inventory is showing improvements.A recent report from Standard & Poor's revealed the nation's shadow inventory decreased during the second quarter, which presents a ray of optimism for the country's housing market.Between the first and second quarter of the year, the amount of time it would take banks to purge the shadow inventory declined from 52 months to 47 months. Banks do so by conducting foreclosure sales, mortgage modifications and other measures.In addition, the report discovered the dollar amount of non-agency loans, which are those not backed by the Federal Housing Administration, Freddie Mac or Fannie Mae, fell to $405 billion. This figure is down from $433 billion, recorded in the first quarter.”It's good news that things are starting to slow down and we're getting closer to the end of the problem,” said Diane Westerback, managing director of Global Surveillance Analytics for S&P. “It could mean a gradual recovery for the market.”The Houston real estate market received aid from foreclosure sales during July, as transactions involving distressed properties accounted for 19.6 percent of all home sales. The median price remained the same from June to July, however, settling at $84,000, the Houston Association of Realtors reported.Courtesy of 2M Realty News?

National mortgage delinquencies rise during July

Mortgage delinquencies nationwide increased during July.According to a report conducted by Lender Processing Services, the national rate of mortgage delinquencies grew during July.LPS' First Look Mortgage report revealed 8.34 percent of the nation's mortgages in July were at least 30 days past due, an increase of 2.4 percent from June. Compared to the previous year, the rate is down 10.4 percent, however.Of the 40 million loans the Jacksonville, Florida-based company surveyed, 4.4 million were at least 30 days past due, while 1.89 million of this total were more than 90 days late. Incorporating foreclosures, the total number of delinquent mortgages rose to 6.5 million.Florida, Mississippi, Nevada, New Jersey and Illinois had the most delinquent loans during the month, while Montana, Wyoming, Alaska and South and North Dakota had the fewest.The report also showed the national pre-sale inventory rate rose to 4.11 percent during July, which is a 9.7 percent surge from last year, but a decrease of 0.4 percent from June.A recent report from the Houston Association of Realtors the total number of foreclosed Houston properties pushed the region's inventory to 7.6 months worth of supply.Courtesy of 2M Realty News

Residential construction numbers fluctuate during July

Housing starts were up during July, according to reports.According to a recent report from the U.S. Department of Housing and Urban Development, residential construction figures showed fluctuations during July.The report revealed the seasonally adjusted rate of permits issued for privately owned units settled at 597,000, which is 3.2 percent below June's rate and 3.8 percent above the pace set in July 2010. The adjusted rate for single-family authorizations was 404,000, which is 0.5 percent higher than June's figure of 402,000 permits.The seasonally adjusted rate of starts for privately owned homes fell to 604,000, 1.5 percent below the figure recorded in June. However, the pace is 9.8 percent greater than the previous year's rate. In addition, an adjusted rate of 425,000 single-family homes began construction during the month, which was 4.9 percent below June's pace.The monthly pace of housing completions, however, showed several increases. For privately owned homes, completions settled at an adjusted rate of 636,000, which is 11.8 percent higher than June and 9.5 percent above July 2010. The pace for single-family units was 470,000, representing a 6.1 percent increase from June's rate.The greater number of completions may allow for more sales nationwide. In the Houston real estate market, more home sales and greater prices were recorded during July, the Houston Association of Realtors recently reported.Courtesy of 2M Realty News

Mortgage rates hit 50-year lows

Mortgage rates fell to 50-year lows during the week ending August 18.Freddie Mac's most recent Primary Mortgage Market Survey for the week ending August 18 revealed continued declines for the nation's home loan interest rates. Some rates averaged their lowest level in 50 years, while others hit all-time lows.According to the report, the average rate for 30-year fixed-rate loans settled at 4.15 percent, which passes the previous low of 4.17 percent, set during the week of November 11, 2010. The rate is down from an average of 4.32 percent last week and 4.42 percent during the same period last year. The interest rate for 15-year FRMs averaged 3.36 percent during the week, down from 3.50 percent the previous week and 3.90 percent last year.”The Federal Reserve's policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows,” said Frank Nothaft, Freddie Mac's chief economist and vice president. “For instance, 30-year fixed mortgage rates are now the lowest in over 50 years.”The average rates for adjustable-rate loans also declined. Five-year ARMs averaged 3.08 percent, down from 3.13 percent the week before and 3.56 percent last year. One-year ARMs settled at 2.86 percent, which was lower than the prior week's average of 2.89 percent and last year's 3.53 percent.With home loan rates continuing to reach new lows, more prospective homeowners may enter the market. A recent report already showed that more homes were sold in the Houston real estate market than the previous year.Courtesy of 2M Realty News

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