Mortgage Rates Hit Fresh Lows: 30-Year at 3.79%

Here we go again. The average fixed rate 30-year mortgage fell to 3.79% this week, yet another record low, according to data from Freddie Mac. That's down from 3.83% the week prior, and marks the third straight week of fresh lows.
The 15-year rate edged just slightly lower to 3.04%, from 3.05%, also a new record low.

The low rates come amid signs of improvement in housing -- declining foreclosures and delinquencies, and increases to housing starts and the NAHB housing index -- and would be a nice touch for those looking to refinance, although many have struggled to take advantage.

An array of weekly and monthly data have been closely watched as economists look for affirmation of a trend -- be it improvement or continued distress -- and as homeowners and prospective buyers wrestle with regional realities, which vary greatly. When it comes to rates, some of the factors hitting home are originating further away.  The economic turmoil in Europe, in particular, is having an effect, according to Freddie Mac vice president Frank Nothaft.

"The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week," said Nothaft, noting that industrial production saw its largest jump since December 2010 and consumer sentiment hit its highest level since January 2008.

The low rates are encouraging demand. Mortgage applications increased 9.2 percent last week from one week earlier, according to data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The refinance portion of that index jumped 13%, with refinancing demand now accounting for 74% of the mortgage application volume, according to the data.

Again, though, much to the frustration of many homeowners, not everyone has been able to take advantage of the low rates, in part because of backlog at large banks.

Thursday's data follow a report that foreclosure filings in the U.S. dropped to a five-year low last month as lenders upped efforts to avoid seizing properties. Bank of America (BAC), for one, said last week that it was rolling out new efforts to help keep homeowners out of foreclosure thanks to the robo-signing settlement. It began mailing 200,000 letters offering certain customers mortgage principal reductions, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages.

One improvement in the housing landscape: The delinquency rate for one-to-four-unit residential properties decreased by 18 basis points in the first quarter from the fourth quarter of 2011. At the end of the first quarter, there was a delinquency rate of 7.4% of all loans outstanding.

"Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve," said Michael Fratantoni, MBA's Vice President of Research and Economics.  "Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future."

Data on housing starts in April and the NAHB housing index in May, released earlier in the week, both increased more than expected.

Article Courtesy of Yahoo.

Shrinking Inventory and Rising List Prices: Continuing Signs of a Recovering Housing Market

Ted Jones, Senior Vice President and Chief Economist for Stewart Title, spends a lot of time keeping his finger on the pulse of the housing market.  We asked Ted to comment on what he sees happening in the residential market nationally -- across all price points -- and he has some up-beat observations to share.  Here are Ted’s comments:

There are positive signs spanning the spectrum indicating a turning real estate market, despite some weak spots across the country. 

Just a few days ago,  USA Today reported that the number of existing homes for sale had dropped 22 percent from a year ago and now totals just 2.37 million units.  This is down 41 percent from the peak reached in mid-2007.  That said, the National Association of Realtors® reported rising prices in 74 of the 146 markets they track in the first quarter of 2012 versus declines in 72 locales.  Even more significant is the dramatic decline in some of the hardest hit markets:

 

• March inventory in Phoenix declined 64 percent from a year ago according to Arizona State University real estate expert.
• NAR reports very tight inventories in Phoenix, Orange County, California, Naples, Florida, Seattle, suburban Washington, DC and North Dakota (driven by the energy boom being experienced in that state).
• While mortgage delinquency rates remain above average (with average being 2 percent), they dropped from 6.19 percent in Q4 2011 to 5.78 percent in Q1 2012 according to TransUnion  (based on a sample of 10 percent of US mortgage holders)  and are down from a 7 percent peak in Q4 2009 
• All-cash transactions in Q1 2012 made up 31 of all sales—and I doubt these people would be buying and paying cash if they thought property values would decline further
• 22 percent of all buyers were investors
• Condominium prices rose 3.4 percent when compared to Q1 2011
• Q1 2012 existing home sales were up 5.3 percent from the same period in 2011 and are now running at annualized rate of 4.57 million
• Total existing home sales in Q1 2012 were at the highest level since 2007
• Move.com reports that many of the hardest hit markets are now among the top recovering markets   

Article Courtesy of  Luxury Insights.

Bank of America offering up to $30,000 for short sales

NEW YORK (CNNMoney) -- Bank of America is offering some struggling homeowners payments of up to $30,000 if they sell their homes in a short sale and avoid ending up in foreclosure.

Under the plan, Bank of America (BAC, Fortune 500) will offer homeowners so-called relocation payments of between $2,500 and $30,000 if they sell their home in a short sale. In short sale deals, the sale price of the home is less than what the seller owes the bank.

The bank first tested the payments in a pilot program in Florida last fall. Under that initiative, Bank of America paid up to $20,000 to borrowers who sold their homes in short sales.

"This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home," said Bob Hora, an executive for the bank.