Sep 28, 2012

Average 30-Year Rate Sets New Record Low

Mortgage rates returned to record low levels yesterday, according to Freddie Mac’s latest weekly mortgage rate survey.

According to the Freddie Mac survey for the week ended September 20, 2012, 30-year fixed-rate mortgages averaged 3.49 percent, matching the record low set late in July.

Last week, 30-year fixed home loans were at 3.55 percent. A new historical low was set for 15-year fixed-rate mortgages; average rates tumbled from 2.85 percent last week to 2.77 percent as of yesterday. The previous record low was 2.80 percent, set at the same time as the record for 30-year fixed loans.

Last Thursday, the Fed confirmed that it would buy $40 billion a month worth of mortgage-backed securities, a move known as quantitative easing, or QE3, as this is the third implementation. QE3 is intended to drive further recovery for the country’s housing market and overall economy; this would lead to lower mortgage rates, thus better opportunities for homeowners to refinance.

Many analysts see this continuing trend as something that could potentially help the struggling U.S. housing market. Refinancing homes under these lower rates could help people reduce the amount of interest they spend on their mortgages.                                                                                                                                                       

However, home sales figures have been slow to recover, and in fact, have been lower in some categories month-on-month. Previously occupied home sales, for instance, dropped to 4.55 million for the month of May, yet still increased on a year-on-year basis.

Last year, mortgage rates were at 4.09 percent for 30-year fixed-rate mortgages, so borrowers can potentially save more than $1,000 annually if they would refinance now. Companies like PrivoCorp - the fastest contract mortgage processors in the country are the ones to look for by brokers. If you are a borrower, then go to companies like First Rate Mortgage Group ( for the lowest rates in the country.

Sep 1, 2012

Housing Starts Decline in July, Ending Winning Streak

Single-family housing starts fell 6.5% in July from the month prior while multifamily starts jumped nearly 10%.As per the Census Bureau reported Thursday morning that single-family starts fell to a 502,000 seasonally adjusted annual rate in July from a 537,000 rate in June.

Prior to July, single-family starts moved up four months in a row. Starts have risen 17% from a year ago.

The Wells Fargo Securities Economics Group reported that much of the building is “partially built-out developments where land prices have fallen and new homes can compete with foreclosures in neighboring areas.”

There is also demand for smaller land parcels near key employment centers, but not in the outskirts of major housing markets that are still plagued by foreclosures and depressed house prices. “The implication is that the upside for single-family construction has a relatively low ceiling at least until jobs and income growth improves and a large proportion of the foreclosure pipeline is cleared,” according to WFS economists.They expect builders will start construction on 510,000 single-family homes this year, up 18.4% from 2011. In July, construction of multifamily units rose to a 229,000 seasonally adjusted annual rate from a 209,000 rate in June.Total housing starts were at 746 thousand (SAAR) in July, down 1.1% from the revised June rate of 754 thousand (SAAR). Note that June was revised from 760 thousand. Single-family starts decreased 6.5% to 502 thousand in July.This shows the huge collapse following the housing bubble, and that total housing starts have been increasing lately after moving sideways for about two years and a half years.Total starts are up 56% from the bottom start rate, and single family starts are up 42% from the low.

This was slightly below expectations of 750 thousand starts in July, but the key is starts are up solidly from last year. Right now starts are on pace to be up about 20% from 2011. Also note that total permits were at the highest level since 2008.Overall, multifamily construction is up 30% from July 2012. “The multifamily sector is a bright spot for new construction,” the WFS report says. “The demand for apartments is expected to remain strong over the next several years.”

What this means for contract processing companies like Privo Corporation (PrivoCorp) is to be seen (positive obviously!) -