Buyers

Daily Real Estate News  |  May 27, 2011  |   Share

For the sixth straight week, fixed mortgage rates inched down, reaching new lows for 2011. The 30-year fixed-rate mortgage averaged 4.60 percent this week while the 15-year mortgage averaged 3.78 percent, Freddie Mac reports in its weekly mortgage market survey.

Meanwhile, the National Association of Home Builders reported this week that home affordability reached its highest level in 20 years, making the purchasing power for home buyers even better during this traditionally prime buying season.

Here's a closer look at mortgage rates:

• 30-year, fixed-rate mortgage: Averaging 4.60 percent this week, it was down slightly from last week's 4.61 percent average. Last year at this time, 30-year rates averaged 4.84 percent. The 30-year fixed rate mortgage hasn't been under this week's 4.60 percent average since early December 2010 when it fell to 4.46 percent.
• 15-year, fixed-rate mortgage: Averaging 3.78 percent this week, it also was down from last week's 3.80 percent average. Last year at this time, the 15-year fixed-rate mortgage averaged 4.21 percent. It has not been under this week's 3.78 percent average since late November 2010 when it fell to 3.77 percent.
• 5-year adjustable-rate mortgage: Averaging 3.41 percent this week, it was down from last week's 3.48 percent average. A year ago at this time, the 5-year ARM averaged 3.97 percent.

WASHINGTON - May 25, 2011 - Nationwide housing affordability during the first quarter of 2011 rose to its highest level in the more than 20 years it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.

The HOI indicated that 74.6 percent of all new and existing homes sold in the first quarter of 2011 were affordable to families earning the national median income of $64,400. This eclipsed the previous high of 73.9 percent set during the fourth quarter of 2010 and marked the ninth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

"With interest rates remaining at historically low levels, today's report indicates that homeownership is within reach of more households than it has been for more than two decades," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "While this is good news for consumers, homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."

Syracuse, N.Y., was the most affordable major housing market in the country during the first quarter of the year. In Syracuse, 94.5 percent of all homes sold were affordable to households earning the area's median family income of $64,300.

Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio.

Among smaller housing markets, the most affordable was Kokomo, Ind., where 98.6 percent of homes sold during the first quarter of 2011 were affordable to families earning a median income of $61,400. Other smaller housing markets near the top of the index included Monroe, Mich.; Cumberland, Md.-W.Va.; Elkhart-Goshen, Ind.; and Springfield, Ohio.

New York-White Plains-Wayne, N.Y.-N.J., led the nation as the least affordable major housing market during the first quarter of 2011. In New York, 24.1 percent of all homes sold during the quarter were affordable to those earning the area's median income of $65,600. This marks the 12th consecutive quarter that the New York metropolitan division has held this position.

Other major metro areas near the bottom of the affordability index included San Francisco-San Mateo-Redwood City, Calif.; Los Angeles-Long Beach-Glendale, Calif.; Honolulu; and Santa Ana-Anaheim-Irvine, Calif., respectively.

San Luis Obispo-Paso Robles, Calif., where 47.6 percent of the homes were affordable to families earning the median income of $72,500, was the least affordable of the smaller metro housing markets in the country during the first quarter. Other small metro areas ranking near the bottom included Santa Cruz-Watsonville, Calif.; Laredo, Texas; Ocean City, N.J; and Santa Barbara-Santa Maria-Goleta, Calif.

© 2011 Florida Realtors®

WASHINGTON - May 24, 2011 - U.S. banks and money lenders now own 872,000 homes, a number that could more than double in the coming years, real estate research firm RealtyTrac said.

The current number of properties owned by banks and lenders is nearly double what they owned in 2007, before the housing market began to collapse, The New York Times reported Monday.

Lenders frequently sell homes at a substantial discount and economists expect it will take three years for lenders to sell the properties they have taken over.

That means for the next three years at least, the sale of so-called distressed homes will continue to slow a recovery in the housing market.

"It remains a heavy weight on the banking system. Housing prices are falling, and they are going to fall some more," said Mark Zandi, chief economist of Moody's Analytics.

Moody's has predicted home values could drop an average of 5 percent by the end of 2011 before making a slight comeback in 2012.

A separate real estate research firm, Trepp, said lenders could lose $40 billion by selling homes at discounted prices.

Lenders are also aware that while they sell homes at discount prices, "We are contributing to the downward spiral in market values," said Eric Will, who manages distressed home sales at the Federal Home Loan Mortgage Corp.

"We want to make sure we are helping stabilize communities," Will said.

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