Report: National home prices drop, but changes in patterns are seen

Report says prices dropping nationally.Purchase prices for U.S. homes dropped by 3.9 percent in the fourth quarter of 2010, according to research released this week by S&P/Case-Shiller, but some large urban markets began to exhibit different trends.

The chairman of the company's index committee, David Blitzer, said in a statement that the trajectories of some major housing sectors have begun to diverge.

"Unlike the 2006 to 2009 period when all cities saw prices move together, we see some differing stories around the country. California is doing better with gains from their low points in Los Angeles, San Diego and San Francisco. At the other end is the Sun Belt – Las Vegas, Miami, Phoenix and Tampa. All four made new lows in December," he said.

Although Houston real estate was not specifically studied in the report, experts say the general trend for the area is good. Other recent studies – while not revealing any skyrocketing property values – showed generally positive movement and definite signs of an ongoing recovery from the housing crash.

Mortgages rates remain steady as applications bounce back

Mortgage rates have remained low and steady.The Mortgage Bankers Association (http://www NULL.mbaa NULL.org/NewsandMedia/PressCenter/75572 NULL.htm) says mortgage rates have continued to remain historically low, while mortgage volume has picked back up following a drop the week before.

The group says that 30-year fixed-rate mortgages during the week ending January 28 had an average interest rate of 4.81 percent, up just slightly from 4.8 percent the week before.

The MBA's weekly report also showed a sharp increase in applications compared to the previous week, which was skewed by the influence of the Martin Luther King holiday. Purchase applications gained more than 9 percent while refinancing numbers increased by nearly 12 percent.

"Applications increased this week relative to the holiday week," said Michael Fratantoni, MBA's vice president of research and economics. "Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent."

However, interest rates aren't expected to stay low forever. The MBA's recent forecast for 2011 predicted that rates would be 5.3 percent by the end of this year, which would increase the cost for people looking to buy Houston homes.

Federal Rate Cut felt Globally

How do you think that the USA will react over the Federal Reserve cutting the rates by 0.5 percent to its all time lowest level of 1.5 percent in over four years. This drop is an attempt to try and improve the lending that keeps the U.S. economy moving forward.

Bank of America, Wells Fargo and other banks cut their prime rate by half a point to 4.5 percent, also the lowest in more than four years, after the Fed announced its decision early Wednesday.

For millions of Americans, the Fed’s cut means borrowing money becomes less expensive. Home equity loans, credit cards and other floating-rate loans all fluctuate depending on what the Fed does.

Following in step with USA, Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank, South Korea, Hong Kong and Taiwan also cut rates.

Today, the market (Wall Street) closed at its’ lowest since 2003 even though the Fed cut rates on Wednesday. Globally people are hoping for an upward change in the markets on Friday.

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