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The U.S. Senate is scheduled to vote April 1 on a Democratic foreclosure relief bill that would provide $4 billion to communities to purchase foreclosed homes, increase disclosure requirements for subprime mortgage loans, and pay for debt counselors so homeowners can negotiate with lenders.
However, Republicans are likely to oppose the bill if it includes a provision to rewrite the bankruptcy code to allow judges to cut interest rates and reduce what borrowers owe on their home loans, which they say would limit what lenders can make on loans.
Democrats say the Federal Reserve recently came to the aid of Bear Stearns, in guaranteeing questionable mortgage-backed investments among other assets, and now something should be done for homeowners.
"The federal government has provided assistance to Wall Street, now Congress must turn its attention to Main Street," insists Senate Majority Leader Harry Reid (D-Nev.).
Tampa Fl Real Estate
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Yesterday, the Federal Reserve unexpectedly announced it was cutting the federal funds rate that effects consumer loans as well as the discount rate effecting bank loans by three-quarters of a percentage point each. This is a bold move which shows that Fed Chairman Ben Bernanke is following through on his promise to take “substantive action in a timely and decisive manner” to keep this country out of a recession. Rate cuts typically stimulate economic growth over time by making it cheaper to borrow money for consumption or investment after banks follow the Fed’s lead and lower their prime lending rate for their best customers. The Fed has now lowered interest rates by 1.75 percentage points since Sept. 18. Today’s emergency interest-rate cut is the first since September 2001, and according to former Fed governor Lyle Gramley is the “kind of forceful leadership the markets had been hoping to see since the credit crisis hit in August.” Are you looking for a home and need preapproval? Visit www.Homes4UinTampa.com for more information. Your source for Tampa Fl Real Estate
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On Dec. 6, Treasury Secretary Henry Paulson, with the support of President George W. Bush, unveiled a plan to aid certain homeowners who face the prospect of higher mortgage rates in the next few years. Paulson worked with banks and other mortgage companies to develop the initiative, and thanked them for their involvement. "We have worked through an evolving process to help minimize the impact of the housing downturn on homeowners, neighborhoods and the U.S. economy," he said. While the plan is ambitious and is designed to bring stability to the shaken economy, it will affect only a narrow slice of homeowners in the U.S. "This is not a silver bullet," said Paulson. Here are some answers to questions you may have. Can you get your mortgage payments lowered because of the bailout? It depends. If you've got an adjustable-rate mortgage, you may qualify under certain conditions. If you've got a standard mortgage with a fixed interest rate, you're not affected. Which adjustable-rate mortgage holders are affected? Only a small group. To qualify, you need to have received your loan sometime between Jan. 1, 2005 and July 31, 2007, and you need to be facing a reset of your interest rate sometime between Jan. 1, 2008 and July 31, 2010. If you're within this range, you may be eligible to have your interest rate frozen, so you can keep your current, lower rate for five years. Who qualifies within that range? The bailout is really designed for homeowners who could run into trouble if their mortgage payments are raised sharply and face the prospect of losing their homes. If you're well enough off that you can afford the higher mortgage payments after a reset, you won't qualify. And if you're in bad enough shape that you can't handle the current low interest rate, you won't qualify. For example, if you've already fallen behind on your mortgage payments, you're not eligible for the rate freeze. Do you need to live in your home to qualify? Yes. The plan excludes people who don't live in the homes for which they have mortgages so that speculators can't benefit. Why is there going to be a bailout? Bush, Paulson, and the Administration are concerned about the fallout from the housing slump. If many people fall behind on their mortgages and have to give up their houses, there will be a series of negative repercussions. First, tens of thousands of Americans could be forced to leave their homes. They would lose whatever equity they had. Consumer spending more broadly would likely slow, hurting the economy overall. In addition, home prices could fall even more quickly than they are now. That could hurt consumer confidence well beyond those people directly affected. Is the bailout going to be enough? It depends on your definition of enough. The deal will add some stability to the housing market, but it won't stop all the problems in the troubled sector. The same day Bush unveiled his plan, the Mortgage Bankers Assn. said that foreclosures had reached a record high in the third quarter. The share of mortgages that have entered foreclosure hit 0.78% in the quarter, up from the previous high of 0.65% set in the previous quarter. At the same time, delinquencies for all mortgages rose to 5.59%, from 5.12%, in the second quarter. None of the people who are delinquent or facing foreclosure will be helped by the plan. The deal almost certainly won't stop the decline in housing prices. Investors are betting that there will be double-digit declines in home prices in nine of 10 major markets over the next year. The only exception is Chicago, and there the estimate is for a 5.6% drop in home prices. So why not go further? Some Democrats are criticizing the Bush Administration on that exact point. Senator Hillary Clinton (D.-N.Y.), among others, is arguing for a more ambitious approach, including at least a seven-year freeze on interest rates. Who stands in the way of such an effort? Investors in mortgages and mortgage-backed securities. If homeowners are going to pay less on their mortgages than originally planned, then somebody is going to lose money. These aren't just fat cats on Wall Street—although many such firms have invested in these securities—they're also pension funds for teachers, firemen, and police, as well as mutual funds whose clients include all sorts of individual investors. They probably even include homeowners who are facing the prospect of higher payments on their adjustable-rate mortgages.
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WASHINGTON – Dec. 6, 2007 – The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments. The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry, would freeze introductory “teaser” rates on subprime mortgages, preventing them from resetting to higher rates for five years.
President Bush, who was scheduled to announce the agreement after a meeting with industry leaders at the White House on Thursday, has stressed that the deal is not a bailout because no government money is involved.
The effort is aimed at stemming a threatened wave of foreclosures in coming years as 2 million subprime mortgages, loans provided to borrowers with spotty credit histories, reset from their introductory rates of around 7 percent to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment.
The mortgage companies will offer to freeze the loans at the lower introductory rates as long as the borrowers did not miss any payments at the lower rate.
The program is the biggest effort yet to deal with a tidal wave of mortgage defaults, which have piled up billions of dollars in losses for big banks, hedge funds and other investors as well as roiling financial markets around the globe. The defaults are the latest economic blow from the worst housing slump in more than two decades. Some economists believe the housing bust could become severe enough to push the country into a recession.
Two Democratic presidential contenders, Hillary Rodham Clinton and John Edwards, complained Wednesday that, given the risks to the economy, Bush’s proposal did not go far enough. They put forward their own plans that would not only freeze mortgage payments but also declare moratoriums on further foreclosures for a period of time as a way of adding pressure on lenders to reach at-risk homeowners.
The financial services industry applauded the administration for negotiating a plan that will allow free-market forces to operate. The hope is that the five-year freeze will buy time for the housing industry to work down record levels of unsold homes and for sales and prices to start rising again.
A housing rebound would allow homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments.
The big sticking point in the lengthy negotiations was getting investors who have purchased the mortgages after they have been bundled into mortgage-backed securities to agree to accept lower interest payments. Critics have said even with a deal, there are likely to be lawsuits.
“The $64,000 question remains: will investors who might balk at going along with this be able to maintain legal roadblocks and prevent the plan from going into effect?” said Sen. Charles Schumer, D-N.Y.
But officials representing major players in the mortgage industry said they believed the plan would withstand any legal challenges and would help at-risk homeowners avoid defaulting on their mortgages.
Steve Bartlett, president of the Financial Services Roundtable, a trade group representing the country’s largest financial service firms, said the deal would benefit banks, investors and homeowners since there is a significant cost when a mortgage is foreclosed.
Under the administration plan, the rate freeze will apply to loans made at the start of 2005 through July 30 of this year and will cover loans that had been scheduled to rise to higher rates between Jan. 1, 2008, and July 31, 2010.
The plan represents an about-face for Paulson, who until recently had insisted the mortgage crisis could be handled on a case-by-case basis. However, he and other administration officials became convinced the tide of foreclosures threatened by the mortgage resets represented such a severe threat that a more sweeping approach was needed. www.Homes4UinTampa.com
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WASHINGTON – Sept. 28, 2007 – A top House Democrat’s plan to reform oversight of the mortgage sector would have a major impact on multiple levels of the $11 trillion industry, according to a draft summary of the bill obtained by Dow Jones Newswires.
The bill, expected to be introduced soon by House Financial Services Committee Chairman Barney Frank, D-Mass., aims to bolster consumer protection by creating a more uniform set of oversight principles that apply to everything from massive retail banks to local mortgage brokers.
For example, the bill would prohibit certain prepayment penalties, mandatory arbitration clauses, and single premium credit insurance for all originators, according to the draft summary.
One of the bill’s principles is to require lenders to match borrowers with loans that are in their customers’ best interests, which could prevent lenders from steering borrowers toward more expensive loans to bring in more fees for banks.
Many industry critics allege that such “steering” fueled many of the problems with subprime loans that have triggered record numbers of home foreclosures this year.
Frank is considering applying this new principle across the industry, according to the draft summary. This would include brokers, which connect borrowers with loans; originators, which finance the loans, and, in some cases, secondary market firms, which purchase the loans and package them into a security.
The bill is still in draft form and many of its features could change before it is ultimately introduced. Still, Frank and his staff have spent months conferring with industry executives, academics, regulators, and consumer groups about the legislation and it is likely to be pushed swiftly through his committee and the House floor.
Frank said Tuesday that he hoped to introduce the bill and have it passed out of his committee by the end of October.
The draft would require all brokers and other mortgage originators to be licensed, work to find the most appropriate loan for the borrower, and fully disclose relevant information to potential customers. If an originator is not state-licensed, he or she must be licensed by the U.S. Department of Housing and Urban Development.
The draft would also prohibit lenders from paying incentives to loan officers based on “a customers’ choice of mortgage terms.” This could potentially have a large effect on the mortgage industry, as many loan officers are paid commissions based on the optional fees and charges passed along to borrowers. Lenders would also have to disclose “any conflicts of interest that might sever the broker’s interest from the consumer’s.”
The bill, which is expected to be co-sponsored by Reps. Brad Miller, D-N.C., and Mel Watt, D-N.C., would create a uniform standard applying to all lenders. It would, for example, prohibit companies from making loans to a person who has “no reasonable ability to repay” the loan at the fully indexed rate for at least seven years. It would also prohibit refinancings that lack “a net tangible benefit” for borrowers.
The banking and securitization industries have argued that any new law should provide safe harbors, or a set of guidelines that would protect originators from possible penalty. The draft summary includes several examples of practices that would give lenders such protection.
There would also be penalties for secondary market investors that “failed to take sufficient steps to not purchase non-safe harbor loans,” the draft summary said. This liability would not, however, extend to bondholders or investors who purchase the loans from securitizers.
Frank has said all year that he plans to introduce comprehensive legislation that would overhaul regulation of mortgage lending, arguing that many lenders found ways to operate outside of the existing regulatory structure. But Frank, who frequently makes public appearances to discuss various legislative projects, has always been careful about not revealing the specific details of his much-anticipated mortgage lending bill.
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WASHINGTON – Sept. 28, 2007 – Rates on 30-year mortgages rose for a second straight week, a sharp rebound after hitting a four-month low. Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.42 percent this week, up from 6.34 percent last week. Two weeks ago, the nationwide average for 30-year mortgages had dipped to 6.31 percent, the lowest level since May 17. That decline reflected a flight to safety after the turbulence in credit markets, which had increased demand for Treasury securities. Those securities heavily influence mortgage rates. Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 6.09 percent this week, up from 5.98 percent last week. While rates on 30-year and 15-year mortgages rose this week, rates on five-year adjustable-rate mortgages and one-year ARMs declined for a fourth straight week. The Federal Reserve, which influences short-term rates, announced last week that it was cutting a key rate by a more-than-expected half point in an effort to make sure that a steep slump in housing and financial market turbulence don’t push the economy into a recession. The Commerce Department reported Thursday that sales of new homes fell by 8.3 percent in August to a seasonally adjusted annual rate of 795,000 units, the slowest level in seven years. Sales of existing homes were also down in August, dropping 4.3 percent to an annual rate of 5.5 million units, the slowest pace in five years. It marked the sixth straight month that sales of existing homes have declined as the housing market continues to suffer through its steepest downturn in 16 years. The share of the market for adjustable-rate loans continues to decline, hitting its lowest level since March 2003, according to the Mortgage Bankers Association. Borrowers facing the prospect of having their initial low “teaser” ARM loans reset to sharply higher rates are trying to avert that payment shock by refinancing into fixed-rate loans. Rates on five-year adjustable rate mortgages averaged 6.15 percent, down from 6.21 percent last week. One-year ARMs averaged 5.60 percent, down from 5.65 percent. It marked the fourth straight weekly decline for both adjustable-rate categories. The mortgage rates do not include add-on fees known as points. Thirty-year mortgages, 15-year and five-year mortgages all carried a nationwide average fee of 0.5 point while one-year adjustable-rate mortgages had an average fee of 0.6 point. A year ago, 30-year mortgages stood at 6.31 percent, 15-year mortgages were at 5.98 percent, five-year ARMS averaged 6.00 percent and one-year ARMs were at 5.47 percent. After a five-year boom, sales of both new and existing homes fell sharply last year. The slump has gotten worse this year as lenders have tightened standards amid soaring foreclosures. While the delinquencies began in the market for subprime loans, which are offered to borrowers with weak credit histories, they have now spread to other loan categories. For more information, to search home for sale Tampa FL, Luxury Homes Tampa, Wesley Chapel FL Real Estate and Lutz Fl Real estate, please feel free to visit our site.
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Long-term mortgage interest rates dipped again Tuesday, and the benchmark 10-year Treasury bond yield rose to 4.37 percent. The 30-year fixed-rate average dropped to 5.92 percent, and the 15-year fixed rate slipped to 5.58 percent. The 1-year adjustable stayed at 5.63 percent. The 30-year Treasury bond yield was up at 4.65 percent. Rates and bonds are current as of 7:15 p.m. Eastern Standard Time. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5. In other economic news, the Dow Jones Industrial Average jumped 180.54 points, or 1.38 percent, finishing at 13,308.39. The Nasdaq climbed 38.36 points, or 1.5 percent, closing at 2,597.47. Stock figures are current as of 7:30 p.m. Eastern Standard Time. For more information, to search home for sale Tampa FL, Luxury Homes Tampa, Wesley Chapel FL Real Estate and Lutz Fl Real estate, please feel free to visit our site.
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While several economists maintained in the early descent from the real estate boom that a "soft landing" was in store, the latest Anderson Forecast predicts a very bumpy ride for the housing market and a near-miss with a recession. David Shulman, senior economist for the quarterly University of California, Los Angeles, forecast, stated in his outlook that the nation's economic performance is expected to be "almost as close as you can get to avoid the technical definition of a recession." That means low growth in the nation's gross domestic product -- about 1 percent in fourth-quarter 2007 and in first-quarter 2008, according to Shulman's "A Near Recession Experience" report. There are dangers, too, that things could get worse. "When the economy slows to a 1 percent pace, it runs the risk of falling into an actual recession just as when an airplane's velocity dips down to its 'stall speed' and falls out of the sky," Shulman states in the report. "In that sense our forecast can be viewed as somewhat optimistic." Shulman told Inman News that the latest forecast was prepared prior to a federal report last week that showed lackluster employment numbers, and the dollar has also struggled in recent weeks -- both of these factors would likely have further diminished expectations in the forecast. While an earlier Anderson Forecast called for housing starts to bottom-out at an annual rate of 1.2 million to 1.3 million, the forecast report released today expects a range of 1 million to 1.1 million for housing starts "and perhaps more importantly we now believe that the recovery will be far more tepid with starts barely recovering to a 1.4-million-unit annual rate by the end of 2009." Housing starts are projected to experience a 55 to 60 percent peak-to-trough decline, Shulman said, with home prices falling 10 percent to 15 percent. The decline in housing starts would resemble a similar drop-off in 1986-91, he said. "I hope we're done lowering our numbers," he said. Home-price declines are expected to drop through the end of 2009 and perhaps further out, Shulman said. Florida, California, Arizona, Nevada and parts of the Northeast are probably most susceptible to larger price drops, he said. Credit tightening in the mortgage market has complicated property purchases in high-priced states such as California, he said, and the mortgage industry is moving toward "more full documentation, real cash down payments and more serious income standards -- and that's going to take a lot of people out of the market at the current price structure." The problems in the mortgage market could lead to some painful adjustments in home prices, he said. "I don't think lending standards were ever as lax ... and that's the cause of the problems," Shulman said. The national scope of the real estate foreclosure problem in some ways resembles the Great Depression, he said. Consumer spending is projected to drop, and auto sales, for example, are expected to hit the lowest level next year since 1998. "Although it has taken longer than what we had previously forecast, the effect of housing weakness has finally spilled over into consumer spending on durable goods," the report states. "Nevertheless, we are still sticking to our story that we will not have a classic recession." Shulman's report notes that the nation's trade sector is improving and a strong global economy should increase exports. But he also states that "'Star Wars' buffs would characterize the August seizing up of financial markets as 'a disturbance in the force,' " and mortgage defaults have spread to Alt-A and prime home loans. The Federal Reserve has taken steps to patch up the market, Shulman states in his report. "It seems to us that what the Fed is trying to accomplish is simultaneously restore liquidity to the financial markets without reinforcing the notion of what was called the 'Greenspan put' where aggressive market participants can lay off their pain on to the Federal Reserve. Simply put, the Fed wants to avoid the problem of what economists call 'moral hazard' by putting risk back into the system where risk takers are both rewarded and punished for their actions." The Anderson Forecast expects the Fed to cut the federal funds rate from 5.25 percent to 4.5 percent by the end of this year. "The cuts will be undertaken to support the economy, not specifically to bail out the financial markets," the report states. While some people are comparing the mess in the financial markets in August to the 1987 stock market crash or the 1998 Long Term Capital Management crisis, Shulman states in his report that "both analogies are wrong ... the economy in both 1987 and 1998 was much stronger than it is today." And because the crisis this time around has its origins in the domestic mortgage market, "we believe the impact on the real economy will be far greater this time than the prior two events." Given the approaching presidential election year, Shulman said the mortgage crisis will provide some high theater, including "clear heroes, clear villains and ... ritual sacrifices." He said, "A lot of people are going to be very embarrassed before this is over." And with all of the legislation in process now to address the mortgage problems, it's possible that the country will get "a whole new mortgage finance system when it's all over," he said. Shulman's report concludes, "We forecast that it will take years for the housing market to recover to 'normal,' and the situation will be exacerbated in the short-run by changes in legislation affecting the mortgage industry." A separate Anderson Forecast report focusing on California's economy predicts that the state is also expected to escape a recession, though the report's author states that the difference between a sluggish economy and a recessionary economy "is getting smaller all the time." That report also notes that mortgage defaults and foreclosures "continue to occupy center stage in any discussion of local housing markets," and that most mortgage defaults have occurred in owner-occupied homes. The California counties with the highest foreclosure rates are those with "middle-of-the-pack home prices, but extremely high usage of adjustable-rate mortgages -- exactly the combination we'd expect when working families stretch beyond their means to buy a home," the report states. 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NAR Says Homeowners and Buyers Will Benefit From FHA Reform Legislation and FED Rate Cut | WASHINGTON, September 18, 2007 - Today is a good day for housing, noted the National Association of Realtors®. On the same day that the Federal Reserve cut the discount rate by half a percentage point, the U.S. House of Representatives has passed the Expanding American Homeownership Act of 2007, H.R. 1852. The legislation will offer home buyers a safer alternative to risky mortgage products and help many homeowners who may be facing foreclosure, and the combination of efforts could have a positive impact on the housing market and consumer confidence. “NAR appreciates the efforts of House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Maxine Waters, D-Calif., for their leadership in protecting the interests of America’s homeowners and those who strive to own their own home,” said NAR President Pat V. Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “While some homeowners are faced with mortgage payments they can no longer afford as their adjustable subprime loans reset, a reformed FHA is positioned to offer borrowers a safer mortgage alternative and help bring stability to local markets and local economies.” “As the leading advocate for expanding homeownership opportunities, NAR has long supported FHA modernization legislation that increases loan limits, eliminates the statutory 3 percent minimum cash down payment, and gives FHA the flexibility to provide risk-based pricing. NAR also supports the continued availability of FHA loss mitigation programs,” said Combs. “We are pleased that this bill contains all of these important enhancements.” FHA’s loss mitigation program includes mortgage modifications, allowing borrowers to change the terms of their mortgage so that they can afford to stay in their home. The program also offers “partial claim” programs in which FHA lends the borrower money to cure the loan default. This no-interest loan is not due until the property is sold or paid off. “FHA can once again be a leader in providing safe loan products and preventing foreclosures by authorizing lenders to help borrowers who are in default. This will make a substantial difference for many families who may otherwise face foreclosure,” Combs said. Eliminating the 3 percent minimum down payment will help many buyers into homes, as will increasing FHA-insured mortgage loan limits, which will help first-time home buyers, minority buyers and others who cannot qualify for conventional mortgages. People who live in high-cost areas will benefit as well, since low limits currently preclude many of these buyers from using FHA-insured mortgages. “NAR believes that the amendment offered by Chairman Frank, and Reps. Gary Miller, R-Calif., and Dennis Cardoza, D-Calif., truly represents a meaningful increase in loan limits, which will help strengthen and secure the mortgage market and make homeownership more attainable for many. We applaud their effort,” Combs said. “The universal and consistent availability of FHA loan products has made mortgage insurance accessible to individuals regardless of their race, ethnicity or social status during periods of prosperity and economic depression, allowing higher risk, yet creditworthy borrowers to get prime financing,” Combs said. “A strong and viable FHA is important to a robust and vital housing market. The House took the right step today, and we hope that the Senate will quickly follow suit.” “Along with today’s FHA legislation, we believe that the Federal Reserve Board made the right move today in lowering the interest rate,” said Combs. “Making borrowing more affordable will make money more available, and this could go a long way in helping turn around the sluggish housing market.” The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. For more information, to search home for sale Tampa FL, Luxury Homes Tampa, Wesley Chapel FL Real Estate and Lutz Fl Real estate, please feel free to visit our site. |
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Daily Real Estate News | June 29, 2007
Stalling a recent upward trend, long-term mortgage rates dipped slightly for the second week in a row. According to Freddie Mac, the average interest on 30-year fixed loans was down to 6.67 percent this week from 6.69 percent a week earlier.
About two weeks ago, the rate had climbed to an 11-month high of 6.74 percent. It has come back down a little in the past couple of weeks, analysts say, due to reduced concerns about inflation and the prolonged slump in the U.S. housing market.
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A bill in the works by Reps. Patrick McHenry (R-N.C.) and Al Green (D-Texas), both members of the House Financial Services Committee, would make changes to the Real Estate Settlement Procedures Act in order to simplify mortgage disclosures.
Under the proposal, lenders would have to provide a one-page disclosure form to borrowers, replacing documents currently in use that McHenry deems "increasingly complex, convoluted, and cumbersome."
Based on a form created by American Enterprises Institute resident fellow Alex Pollock, lenders would have to spell out the introductory interest rate, the fully indexed rate, the "maximum possible" rate, prepayment penalties and their triggers, and balloon payment amounts and due dates. Due to borrowers three days prior to closing, McHenry believes the form is a suitable alternative to banning loan practices.
Source: American Banker, Joe Adler (06/18/07) For more information, to search home for sale Tampa FL, Luxury Homes Tampa, Wesley Chapel FL Real Estate and Lutz Fl Real estate, please feel free to visit our site.
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Daily Real Estate News | June 21, Mortgage rates broke a 7-week streak of increases, with the average 30-year fixed mortgage rate falling back to 6.76 percent, according to Bankrate’s weekly national survey of large lenders.
The national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
The average 15-year fixed rate mortgage, popular for refinancing, dropped by an equal amount, to 6.45 percent, Bankrate said in its report. With larger loans, the average jumbo 30-year fixed rate dipped back below the 7 percent mark to 6.99 percent. Adjustable rate mortgages were no different, with the average one-year ARM inching lower to 6.18 percent and the 5/1 ARM sinking to 6.58 percent.
After rising significantly in the preceding three weeks, mortgage rates responded to signs that core inflation was moderating as the Federal Reserve has forecast, Bankrate said.
“Any indication that inflation is less of a threat is good news to bond investors that fear its erosive effects on the purchasing power of a bond's fixed payments," the report said. "The resulting increase in bond prices pushed both bond yields and mortgage rates lower. Mortgage rates are closely related to yields on long-term government bonds."
Fixed mortgage rates remain nearly one-half percentage point higher than at the beginning of May. At the time, the average 30-year fixed mortgage rate was 6.28 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,019.16.
With the average 30-year fixed rate now at 6.76 percent, the same loan originated today would carry a monthly payment of $1,071.28.
Source: Bankrate.com For more information, to search homes for sale in Tampa or Tampa Real Estate, please feel free to visit our site.
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Mortgage rates increased for the fifth consecutive week, with the average 30-year fixed mortgage rate rising to the highest point since August, according to Bankrate.com's weekly national survey of large lenders. The average 30-year fixed mortgage rate is now 6.47 percent and has an average of 0.26 discount and origination points.The average 15-year fixed rate mortgage, popular for refinancing, increased by a similar amount, to 6.21 percent. With larger loans, the average jumbo 30-year fixed rate climbed to 6.68 percent. On adjustable rate mortgages, the average one-year ARM nudged higher to 6.09 percent while the 5/1 ARM jumped up to 6.37 percent.“Mortgage rates often show short spurts of volatility and prolonged periods of little movement,” Bankrate says in its survey report. “Mortgage rates had been confined to a narrow range of approximately one-third of a percentage point for nearly seven months — including weeks on end with virtually no movement. But they broke out of that range with this week's move, as hopes for a Fed interest rate cut continue to wane.”Fixed mortgage rates have increased nearly one-third percentage point since mid-March. At the time, the average 30-year fixed mortgage rate dipped to 6.16 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,006.30. With the average 30-year fixed rate now 6.47 percent, the same loan originated today would carry a monthly payment of $1,039.66. Fixed mortgage rates still remain a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.For more information, to search homes for sale in Tampa or Tampa Real Estate, please feel free to visit our site.
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Housing activity this year will be somewhat lower than in earlier forecasts, with clearer analysis of the effects of stricter lending standards and a decline in subprime mortgage origination, according to the latest projections (PDF 136K) by the National Association of Realtors®. Lawrence Yun, NAR senior economist, said one benefit for the market is the disappearance of speculative behavior, which contributed to abnormal price growth. “Home buyers today are purchasing for the long-term, generally with a realistic expectation of modest gains over time,” Yun said. “Housing first and foremost is shelter. Second, it’s a long-term investment that slowly builds the greatest amount of wealth for most families. It’s good that we’re getting beyond the tendency of some buyers to view housing as a temporary asset to accumulate short-term wealth, which is not to be expected in a normal market.” Existing-home sales are likely to total 6.29 million this year and 6.49 million in 2008, compared with 6.48 million last year. New-home sales are projected at 864,000 in 2007 and 936,000 next year, lower than the 1.05 million in 2006. Housing starts should total 1.46 million units this year and 1.52 million in 2008, down from 1.80 million last year. “If it weren’t for a favorable economic backdrop, housing would probably have a hard landing. As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later,” Yun said. The 30-year fixed-rate mortgage should rise slowly to 6.5 percent by the fourth quarter. Last week, Freddie Mac reported the 30-year rate was 6.16 percent. The national median existing-home price is forecast to slip 1.0 percent to $219,800 this year, and then rise 1.4 percent in 2008. The median new-home price is expected to be essentially unchanged at $246,400 in 2007, and then rise 2.2 percent next year. The unemployment rate will probably average 4.6 percent this year, unchanged from 2006. Inflation, as measured by the Consumer Price Index, is estimated to decline to 2.5 percent in 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is projected at 2.1 percent in 2007, lower than the 3.3 percent growth last year. Inflation-adjusted disposable personal income should rise 2.6 percent in 2007, the same as last year. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. Click here for more information and for Tampa FL Real Estate, Wesley Chapel Fl Real Estate and Lutz FL Real Estate.
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The Federal Reserve left its key interest rate at 5.25 percent yesterday — the level where it's been since June 2006.
The decision means that credit cards, home equity lines of credit and other loans will stay at 8.25 percent, and 30-year home mortgages are likely to remain where they are now, hovering around 6.25 percent.
Some investors have been craving an interest rate cut, but many economists believe the Fed will keep rates where they are now for the rest of the year.
In assessing economic conditions the Fed used the same language that it has at previous meetings, saying any future rate change will depend on growth and inflation. It renewed its waning that underlying inflation — which excludes food and energy prices — remains “somewhat elevated.”
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