Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.03 percent with an average 0.7 point for the week ending October 29, 2009, up from last week when it averaged 5.00 percent. Last year at this time, the 30-year FRM averaged 6.46 percent.
The 15-year FRM this week averaged 4.46 percent with an average 0.6 point, up from last week when it averaged 4.43 percent. A year ago at this time, the 15-year FRM averaged 6.19 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, up from last week when it averaged 4.40 percent. A year ago, the 5-year ARM averaged 6.36 percent.
The one-year Treasury-indexed ARM averaged 4.57 percent this week with an average 0.6 point, up from last week when it averaged 4.54 percent. At this time last year, the 1-year ARM averaged 5.38 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971," said Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year," according to Freddie Mac's survey.
"Economic data releases this week offered mixed signals as to the current state of the housing market. For example, total existing home sales jumped 9.4 percent to an annualized rate of 5.57 million homes in September, the strongest pace since July 2007, according to the National Association of Realtors ®. However, new home sales unexpectedly fell 3.6 percent to 402,000 houses, the weakest since June of this year, based on figures from the Department of Commerce. Nonetheless, stronger housing demand has lowered the inventory of unsold existing homes in September to the lowest since January of this year and for new homes the lowest since November 1982, which should help stabilize falling house prices."
Source: Freddie Mac
Friday, October 30, 2009
Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum
Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®.
Existing-home sales - including single-family, townhomes, condominiums and co-ops - jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. "Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," he said. "We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery."
Even with the improvement, Yun said the market is underperforming. "Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet," he said. "We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history."
Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. "Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market," he said.
"Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average," McMillan said.
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.
"The current housing supply is the lowest we've seen in two and a half years," Yun said. "If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.
Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.
Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
Source: National Association of Realtors
Existing-home sales - including single-family, townhomes, condominiums and co-ops - jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. "Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," he said. "We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery."
Even with the improvement, Yun said the market is underperforming. "Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet," he said. "We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history."
Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. "Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market," he said.
"Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average," McMillan said.
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.
"The current housing supply is the lowest we've seen in two and a half years," Yun said. "If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.
Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.
Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
Source: National Association of Realtors
Friday, October 23, 2009
Homes: About To Get Much Cheaper?
National home prices are forecast to shrink another 11%. Miami, Las Vegas and Phoenix will record steep declines, but a few cities will actually post gains.
If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years -- though it underestimated the scope.
Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said.
In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years.
If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.
In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.
Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.
Prices had stabilized
The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.
Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however.
"I'm afraid Case-Shiller may be just a temporary reprieve," he said.
He pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors. But the market assistance ends when the credit expires on Dec. 1.
Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.
Winners
A handful of metro areas will buck the trend, according to Fiserv. Six markets will remain flat, and 33 will actually post gains. The biggest winner will be the Kennewick, Wash., metro area, where home prices have ramped up 8.9% over the past three years and are expected to increase another 3.4% by June 2010.
Fairbanks, Alaska, prices are anticipated to rise 2.5%, while Anchorage will climb 2.1%. Elmira, N.Y., prices may inch up 1.8%.
The nation's biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.
Home values in the nation's second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. Chicago prices, which have fallen 25.2% to $227,000, will drop only 4.1% over the next 12 months and then starting to climb.
The Detroit metro area now has the dubious distinction of having the lowest home prices in the country. Prices have dropped 51.7% to a median of $50,000. They're expected to fall another 9.1% and then stabilize.
Source: CNN-Money Magazine
If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years -- though it underestimated the scope.
Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said.
In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years.
If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.
In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.
Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.
Prices had stabilized
The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.
Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however.
"I'm afraid Case-Shiller may be just a temporary reprieve," he said.
He pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors. But the market assistance ends when the credit expires on Dec. 1.
Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.
Winners
A handful of metro areas will buck the trend, according to Fiserv. Six markets will remain flat, and 33 will actually post gains. The biggest winner will be the Kennewick, Wash., metro area, where home prices have ramped up 8.9% over the past three years and are expected to increase another 3.4% by June 2010.
Fairbanks, Alaska, prices are anticipated to rise 2.5%, while Anchorage will climb 2.1%. Elmira, N.Y., prices may inch up 1.8%.
The nation's biggest metro area, New York City, will underperform the nation as a whole over the next two years, according to Fiserv. Prices, which have already fallen 21.7% to a median of $375,000, are expected to fall 17.4% by June 2011.
Home values in the nation's second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. Chicago prices, which have fallen 25.2% to $227,000, will drop only 4.1% over the next 12 months and then starting to climb.
The Detroit metro area now has the dubious distinction of having the lowest home prices in the country. Prices have dropped 51.7% to a median of $50,000. They're expected to fall another 9.1% and then stabilize.
Source: CNN-Money Magazine
C.A.R. President on California Real Estate Forecast
2009 has been a thought-provoking year for the real estate industry in California, both for REALTORS® and for our clients. In many instances, it has been a year without precedent. Like most of you, I’ve wondered what 2010 will bring. Many of my questions and concerns were addressed at the opening luncheon during CALIFORNIA REALTOR® EXPO 2009. C.A.R. Vice President and Chief Economist Leslie Appleton-Young deftly navigated her way through the Association’s official forecast for the 2010 housing market, putting today’s market into historical perspective and setting the stage for the future.
The upshot is that, statewide, we can expect the median home price to rise 3.3 percent to $280,000 in 2010, while sales will moderate to a more sustainable pace, posting a 2.3 percent decrease next year. 2010 should mark the beginning of a “new normal” for California’s housing market, and likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.
C.A.R.’s forecast was widely reported in the news media, and we’ve posted our news release online.
The 2009 market presented a unique opportunity for first-time home buyers. Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide.
Unfortunately, the federal tax credit for first-time home buyers is set to expire next month on Nov. 30. Yet research shows that the First-time Home Buyer Tax Credit arguably has been the most successful component of the federal government's efforts to stimulate the U.S. economy. According to a study conducted by C.A.R. to gauge the role the federal tax credit played in the California market, nearly 40 percent of first-time home buyers reported they would not have purchased a home without the tax credit. Nearly 70 percent of recent first-time home buyers surveyed said the tax credit was "the most important" or a "very important" factor in their decision to buy a home.
Source: James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
The upshot is that, statewide, we can expect the median home price to rise 3.3 percent to $280,000 in 2010, while sales will moderate to a more sustainable pace, posting a 2.3 percent decrease next year. 2010 should mark the beginning of a “new normal” for California’s housing market, and likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.
C.A.R.’s forecast was widely reported in the news media, and we’ve posted our news release online.
The 2009 market presented a unique opportunity for first-time home buyers. Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide.
Unfortunately, the federal tax credit for first-time home buyers is set to expire next month on Nov. 30. Yet research shows that the First-time Home Buyer Tax Credit arguably has been the most successful component of the federal government's efforts to stimulate the U.S. economy. According to a study conducted by C.A.R. to gauge the role the federal tax credit played in the California market, nearly 40 percent of first-time home buyers reported they would not have purchased a home without the tax credit. Nearly 70 percent of recent first-time home buyers surveyed said the tax credit was "the most important" or a "very important" factor in their decision to buy a home.
Source: James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
Friday, October 16, 2009
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Housing Upturn Occuring In Some Parts of Southern California
The median sales price in some areas rose last month for the first time since the market crashed in 2007, according to MDA DataQuick.
Source: LA Times
Push On To Expand $8,000 tax credit
Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time home buyers—potentially applying it to all but the wealthiest home buyers.
Source: CNN money
Source: CNN money
Talking Points
The federal government is offering some financial incentives in the form of a tax credit to homeowners making home improvements. The credits can be claimed on income taxes for the year in which the improvements were purchased - either 2009 or 2010. With a tax credit, the amount is deducted from the taxes owed.
Upgrades such as insulation, windows, doors, roofing, heating and air-conditioning systems, and water heaters qualify for a federal tax credit of 30% of the purchase price of the product, up to $1,500. More-costly improvements, including solar water heaters, solar panels, small wind-energy systems and geo-thermal heat pumps, offer a credit 30% of the purchase price, but with no cap.
Details of which products qualify can be found on the Environmental Protection Agency's Energy Star program web site at www.energystar.gov/
Source: Environmental Protection Agency
Upgrades such as insulation, windows, doors, roofing, heating and air-conditioning systems, and water heaters qualify for a federal tax credit of 30% of the purchase price of the product, up to $1,500. More-costly improvements, including solar water heaters, solar panels, small wind-energy systems and geo-thermal heat pumps, offer a credit 30% of the purchase price, but with no cap.
Details of which products qualify can be found on the Environmental Protection Agency's Energy Star program web site at www.energystar.gov/
Source: Environmental Protection Agency
Saturday, October 10, 2009
Long-Term Mortgage Rates Ease Further This Week
Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.87 percent with an average 0.7 point for the week ending October 8, 2009, down from last week when it averaged 4.94 percent. Last year at this time, the 30-year FRM averaged 5.94 percent. The last time the 30-year FRM was lower was the week ending May 21, 2009, when it averaged 4.82 percent.
The 15-year FRM this week averaged 4.33 percent with an average 0.7 point, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 5.63 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.35 percent this week, with an average 0.5 point, down from last week when it averaged 4.42 percent. A year ago, the 5-year ARM averaged 5.90 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in 2005.
The one-year Treasury-indexed ARM averaged 4.53 percent this week with an average 0.5 point, up from last week when it averaged 4.49 percent. At this time last year, the 1-year ARM averaged 5.15 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Long-term mortgage rates eased further this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates for 30-year fixed-rate loans were the lowest since mid-May; 15-year FRMs were at a record low since data were first collected in 1991 and 5-year ARMs also hit an all-time record starting in 2005. Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing.
"Such low rates are spurring mortgage demand. Mortgage applications surged to a 19-week high over the week ending on October 2nd, according to the Mortgage Bankers Association. Moreover, applications for home purchases were at the strongest pace since the beginning of this year."
Source: Freddie Mac
The 15-year FRM this week averaged 4.33 percent with an average 0.7 point, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 5.63 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.35 percent this week, with an average 0.5 point, down from last week when it averaged 4.42 percent. A year ago, the 5-year ARM averaged 5.90 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in 2005.
The one-year Treasury-indexed ARM averaged 4.53 percent this week with an average 0.5 point, up from last week when it averaged 4.49 percent. At this time last year, the 1-year ARM averaged 5.15 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Long-term mortgage rates eased further this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates for 30-year fixed-rate loans were the lowest since mid-May; 15-year FRMs were at a record low since data were first collected in 1991 and 5-year ARMs also hit an all-time record starting in 2005. Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing.
"Such low rates are spurring mortgage demand. Mortgage applications surged to a 19-week high over the week ending on October 2nd, according to the Mortgage Bankers Association. Moreover, applications for home purchases were at the strongest pace since the beginning of this year."
Source: Freddie Mac
Thursday, October 8, 2009
California House Prices Forecast to Rise in 2010, Realtors say
This week, the CALIFORNIA ASSOCIATION OF REALTORS® released its annual housing forecast. C.A.R.’s annual housing forecast details what consumers, REALTORS®, and the real estate industry can expect to happen next year in terms of median prices and existing home sales. C.A.R.’s forecast is closely followed by the news media, and the Association’s leadership and economists often are called upon to discuss the forecast. This year, coverage by the news media produced nearly 200 newspaper articles, Web stories, and blog entries, in addition to extensive television and radio coverage. The 2010 California Housing Market Forecast was presented Wednesday at CALIFORNIA REALTOR® EXPO 2009 in San Jose.
MAKING SENSE OF THE STORY FOR CONSUMERS
· The median home price in California is expected to rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
· “After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” said C.A.R. President James Liptak. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
· “Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.”
· “Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” said Leslie Appleton-Young, Vice President and Chief Economist for the CALIFORNIA ASSOCIATION OF REALTORS®. “The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government.”
Source: Bloomberg
MAKING SENSE OF THE STORY FOR CONSUMERS
· The median home price in California is expected to rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
· “After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” said C.A.R. President James Liptak. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
· “Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.”
· “Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” said Leslie Appleton-Young, Vice President and Chief Economist for the CALIFORNIA ASSOCIATION OF REALTORS®. “The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government.”
Source: Bloomberg
Tuesday, October 6, 2009
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Friday, October 2, 2009
Fast Facts
Calif. Median Home Price – Aug. 09: $292,960
Calif. Highest Median Home Price by C.A.R. Region August 09: Santa Barbara So. Coast - $828,750
Calif. Lowest Median Home Price by C.A.R. Region August 09: High Desert $111,770
Calif. First-Time Buyer Affordability Index – Second Quarter 2009: 67%
Mortgage Rates – Week Ending 9/24/09:
30 Year Fixed - 5.04% Fees/Points - 0.6%
15 Year Fixed- 4.46% Fees/Points - 0.6%
1 Year Adjustable – 4.52% Fees/Points - 0.6%
Source: California Association of Realtors and Freddie Mac
Calif. Highest Median Home Price by C.A.R. Region August 09: Santa Barbara So. Coast - $828,750
Calif. Lowest Median Home Price by C.A.R. Region August 09: High Desert $111,770
Calif. First-Time Buyer Affordability Index – Second Quarter 2009: 67%
Mortgage Rates – Week Ending 9/24/09:
30 Year Fixed - 5.04% Fees/Points - 0.6%
15 Year Fixed- 4.46% Fees/Points - 0.6%
1 Year Adjustable – 4.52% Fees/Points - 0.6%
Source: California Association of Realtors and Freddie Mac
Case-Shiller Index Improves For Sixth Consecutive Month
Although still in negative territory, the annual rate of home-price decline improved last month in the 10-City and 20-City Composites tracked as one of the S&P/Case-Shiller Home Price Indices released yesterday. The 10-City and 20-City Composites declined 12.8 percent and 13.3 percent, respectively, in July compared to the same month last year. All 20 metro areas showed an improvement in the annual rates of decline in July compared with the previous month.
“The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “We do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-time Buyer’s Tax Credit in November, anticipated higher unemployment rates, and a possible increase in foreclosures.”
Source: Standard and Poor”s
“The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “We do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-time Buyer’s Tax Credit in November, anticipated higher unemployment rates, and a possible increase in foreclosures.”
Source: Standard and Poor”s
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