According to the Mortgage Bankers Association’s Weekly Applications Survey, rates for 30-year fixed-rate mortgages fell to 4.91 percent last week, down from 5.01 the week before. With the Federal Reserve winding down its purchases of mortgage-backed securities, speculation has been that rates would begin rising. But the program, which has been credited with keeping rates near or below five percent, expires at the end of this month and rates remain near record lows. More here and here.
Both housing starts and building permits fell in February, reversing gains made in January. According to The Commerce Department, groundbreaking activity fell 5.9 percent, while permits dropped 1.6 percent. Paul Dales, an economist at Capital Economics, said severe winter weather may have contributed to the drop but, because the market is saturated with excess supply and millions of potential foreclosures, new homes will continue to face competition from distressed properties on the market at bargain prices. More here, here, and here.
After polling communities in North Carolina, Virginia, Florida, Texas, and California, Ticonderoga Securities analyst Stephen East says the spring selling season is showing signs of stability. In particular, East said that the lowest-priced floor plans, most attractive to first-time buyers, are no longer the most popular options in many areas. And because of uncertainty caused by the expiration of several government programs this spring, signs of activity at higher price points and among move-up buyers would seem to indicate the market is beginning to normalize. More here.
Mort Zuckerman, chairman of Boston Properties Inc., argues that the government should buy foreclosed mortgages from the banks as a way to keep people in their homes and avoid another major downturn in housing.
According to RealtyTrac’s February 2010 U.S. Foreclosure Market Report, foreclosure filings fell for the second straight month. The report, which measures the number of default notices, scheduled auctions, and bank repossessions, showed filings reported on 308,524 properties, down 2 percent from January, but up 6 percent from a year ago. James J. Saccacio, chief executive officer of RealtyTrac, said the year-over-year increase was the smallest annual increase since January 2006. More here.
According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages increased to 5.01 percent from 4.95 the week before. Loan application volume also increased slightly, up 0.5 percent from the previous week. There had been speculation that rates would rise one or two percentage points as the Federal Reserve ended its purchases of mortgage-backed securities. But with the program set to expire at the end of the month and rates still near historic lows, some analysts are now predicting rates rising as little as 0.3 percent. More here.
After announcing an additional $1.5 billion in federal funding aimed at helping struggling homeowners in states where housing prices have fallen more than 20 percent, the government is signaling that there’s more housing help on the way. Michael Barr, the Treasury’s assistant secretary for financial institutions, said that, although the administration’s housing policies have kept mortgage rates low and reduced the rate of price declines, there’s more work to be done. And while Barr didn’t announce any new programs, legislators, such as House Financial Services Committee Chairman Barney Frank have suggested focusing on principal reduction as a way to create sustainable mortgages. More here and here.
According to real-estate site Zillow.com, the number of sellers cutting their asking price fell slightly in February from 19.8 percent in January to 19.5. At the same time last year, more than a third of the homes on the market had a price reduction. Also, the median list price fell 1.4 percent in February, down 6.8 percent since last year, according to the report. More here.
Despite disappointing winter sales reports, Paul Bishop, vice president of research at the National Association of Realtors, argues that long-term trends indicate sales may be turning the corner and feels they’ll continue to stabilize, if not move up, during the coming months.
According to the National Association of Realtors, the Pending Home Sales Index fell 7.6 percent in January but remains 12.3 percent higher than it was during the same month last year. Pending sales, based on contracts signed during the month, typically lead existing sales by a month or two. Lawrence Yun, the NAR’s chief economist, expects near-term sales to be weak followed by a surge of existing-home sales in April, May, and June. More here.