Average rate on 30-year mortgage at 4.22%







WASHINGTON (AP) – Nov. 22, 2013 – Average U.S. rates on fixed mortgages declined this week after two weeks of increases, keeping home buying affordable.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.22 percent from to 4.35 percent last week. The average on the 15-year fixed mortgage dipped to 3.27 percent from 3.35 percent.

Rates had spiked over the summer and reached a two-year high in July on speculation that the Federal Reserve would slow its bond purchases later this year. But the Fed held off in September and now appears poised to wait at least a few more months to see how the economy performs. The bond purchases are intended to keep long-term interest rates low.

Mortgage rates tend to follow the yield on the 10-year Treasury note. They have stabilized since September and remain low by historical standards.

Still, mortgage rates are nearly a full percentage point higher than in the spring. The uptick has contributed to a slowdown in home sales. The National Association of Realtors said sales of existing homes fell 3.2 percent in October, the second straight monthly decline.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage held at 2.61 percent. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 2.95 percent from 3.01 percent. The fee rose to 0.5 point from 0.4 point.



Trends: The top issues that will impact real estate



According to an industry expert at the “Top 10 Issues Affecting Real Estate” session at the 2013 National Association of Realtors® (NAR) Conference and Expo, interest rates will rise and capitalization rates will too. Those two issues topped the list of upcoming changes that will impact the real estate industry.

Scott Muldavin, president of The Muldavin Company Inc., a consulting firm in San Rafael, Calif., shared his insights into the top issues that could potentially impact homeowners, real estate markets and the industry in the coming years.

According to Muldavin, historically low interest rates have driven the economy and real estate markets in recent years; but as rates start to rise, it could raise capitalization rates – the ratio between the income produced by an asset and its cost – which could create anxiety among real estate investors.

“Interest rates are going to rise significantly, so my advice is to be careful about your investments today and lock in those low rates if you can,” said Muldavin.

Healthcare is also an important issue with real estate implications. As the U.S. population ages, demand for senior housing with go up. That will change the configuration and size of available housing, and it will increase the need for medical care, which will create a demand for expansion among medical facilities.

Muldavin said there’s been a capital market resurgence, which is good news for residential and commercial real estate. In commercial markets, transaction volume is up, credit is available, underwriting has loosened and a full range of debt options has returned. For residential markets, underwriting remains tougher, but rates are near historic lows currently and affordability remains high.

Future housing demand from echo boomers, the 80 million Americans born between 1982 and 1995, will also impact real estate markets.

“We are the only developed country that has had an echo boom, and that’s a positive thing if the country can react and respond to it,” said Muldavin.

Echo boomers often prefer a more flexible and active urban lifestyle. They rely heavily on mass transit, and are often willing to trade home size for location. However, Muldavin said that the suburbs are fighting back with better mass transit, new bike paths and repurposed properties to attract more future buyers.

Climate change and more extreme weather patterns will also have an impact on coastal homes and many other properties across the country. Muldavin cited the impact of recent storms like Hurricanes Katrina and Sandy, and how property owners in these markets are now dealing with changes in code and zoning standards, and they’re paying significantly higher insurance premiums.

As always, unknown events can also impact the real estate market, and they can sometimes do it quickly – like major global events, such as acts of terrorism, war, global debt crisis and financial and economic downturns. “The risk of future events is high, and while it’s always hard to anticipate these risks, they need to be considered because their impact is often great,” said Muldavin.

Increased natural gas and oil production in the U.S., which has an impact on the economy and environment, is another issue with real estate implications. Muldavin said there’s been an increase in fracking and oil and natural gas production in recent years, and while this is creating greater employment opportunities and reducing U.S. dependence on foreign oil, it’s also contributing to climate change, environmental degradation and contamination.

Muldavin also cited globalization as a trend to watch. While that benefits many U.S. markets, it also puts real estate at risk for foreign investment losses since the real estate market becomes more tied to the economies of other countries.

Another issue to watch: how new technology will impact office spaces. Muldavin said many corporations are already creating work-from-home policies and other mobility solutions that allow individuals to work when and where they want. That change could significantly reduce office space requirements.

“Many people are replacing physical items with electronics and free or virtual products, such as e-books and smartphones enabled with cameras, GPS and flashlights,” he said. “This means businesses will continue to require less retail space, so I believe the trend in the future will be for fewer and smaller stores.”

For real estate, Muldavin said the impact of the Internet on bricks-and-mortar retail stores is a growing issue. He said retail demand is down across the country due to an increase in Internet sales, which are expected to rise from the current 6.5 percent to nearly 15 percent by 2020.

Sarasota-area home prices rise 12.8% in September! What is your home worth??

Home price increases in Southwest Florida continued to outpace state and national gains in September, data provider CoreLogic says.

While some expect home prices to cool in the months ahead, late summer brought another round of double-digit gains regionally.

Single-family home prices in Sarasota and Manatee counties rose 12.8 percent in September over last year. Prices climbed 14 percent in Charlotte County on a year-over-year basis.

Both markets topped the 12.1 percent average increase in home prices throughout Florida and the 12 percent gain nationally.

Prices ticked up 1.2 percent in Sarasota-Manatee and 0.2 percent in Charlotte County from August to September, CoreLogic said.

Local home prices have posted double-digit gains all year as compared to 2012, driven by low inventories, pent-up demand and cash-rich investors eager to make deals.

But a recent report by CoreLogic Case-Shiller predicted that home prices will rise just 3.6 percent in Sarasota-Manatee — and 4.3 percent in Charlotte County — through mid-2014.

“We are seeing a slowdown in the rate of price appreciation over the past few months from the rapid pace experienced over the first half of this year,” said CoreLogic CEO Anand Nallathambi, in a statement. “This deceleration is natural and should help keep market fundamentals in balance over the longer term.”

Excluding distressed sales, over-the-year prices jumped by 22.2 percent in Charlotte and by 12.4 percent in Sarasota-Manatee. Distressed sales include short sales and real estate owned transactions by lenders.


The nationwide price increase for all home sales was the 19th consecutive monthly improvement.

“September marked the unofficial five-year anniversary of the start of the housing crisis,” said Mark Fleming, chief economist for CoreLogic. “The five-year home price appreciation for all homes in the nation was 3.4 percent.”

The firm’s housing price index is at its highest level since May 2008, he said.

Despite the gains, home prices in Florida remain 37.7 percent off their peak, the second-highest level in the nation. Nevada was first in that category at 41.4 percent.

States with the highest over-the-year home appreciations were Nevada, at 25.3 percent; California, at 22.5 percent; Arizona, at 14.6 percent; Georgia, at 14.4 percent; and Michigan, at 13.9 percent.

Prices did not decline in any state in September.



Credit to herealdtribune.com for the article