National Average Long-Term Mortgage Rate Rises to 5 Percent

National Average Long-Term Mortgage Rate Rises to 5 Percent
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.00 percent with an average 0.7 point for the week ending October 22, 2009, up from last week when it averaged 4.92 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.


The 15-year FRM this week averaged 4.43 percent with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago, the 5-year ARM averaged 6.06 percent.

The one-year Treasury-indexed ARM averaged 4.54 percent this week with an average 0.6 point, down from last week when it averaged 4.60 percent. At this time last year, the 1-year ARM averaged 5.23 percent.

"Following bond yields, long-term mortgages rates edged up slightly this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Although rates for 5/1 ARMs and traditional 1-year ARMs are around half a percentage point below 30-year fixed mortgages, consumers appear to be seeking the stability of fixed-rate mortgages. According to the Mortgage Bankers Association, ARMs averaged only about 6 percent of the number of mortgage applications in September and October thus far."

"The housing market is still trying to recover in the second half of the year. The Federal Reserve reported in its October 21st regional economic review that housing market conditions improved in recent weeks, primarily from a pickup in sales of low-to medium-priced houses. However, residential construction activity was reported to remain weak in most areas. New construction of single family homes rebounded in September, rising at a 3.9 percent annual rate, but did not erase all of the declines set in August, based on figures released by the Department of Commerce. Moreover, homebuilder confidence, as measured by the National Association of Homebuilder's Housing Market Index, fell slightly in October and marked the first decline since January of this year."

Defending Your Home Base Against Foreclosure

Defending Your Home Base Against Foreclosure

Throughout Florida, we see the number of foreclosures continue to rise. While Winter Park may have been more stable when the housing crisis began, the community is now feeling the impact of the foreclosure wave that is washing over our state and nation.


A recent report by RealtyTrac, Inc. found that Orlando's four county region, including the city of Winter Park, had nearly 8,000 homes with a foreclosure filing, notice of foreclosure or repossession by a lending group. This figure has doubled since last year's data collection. Now, more than ever, I hear from worried homeowners asking questions like: "What should I do if I can't pay my mortgage?" and "What should I do if I'm served a foreclosure notice?" People think there is little that can be done to defend against foreclosure. Good news that is absolutely not true.

Understand that many people, including elected officials and community groups at all levels, are working tirelessly to slow the rate of new foreclosures. There are, however, a few attempting to take advantage of scared, inexperienced homeowners who are faced with losing everything. My Advice: don't be afraid, get informed.

The most critical first step for individuals faced with mortgage foreclosure is to find and secure the services of an experienced attorney, familiar with these issues. A foreclosure filing should be viewed like a lawsuit, and you'll need someone who can successfully litigate your case. A thorough understanding of your mortgage right, which include, but are not limited to, loan modifications, is of the highest importance.

Be wary of non-attorneys offering assistance as they have no leverage in dealing with lenders. In the end, they cannot do anything to help their clients if a foreclosure case goes to court. Lenders have become keenly aware of this deficiency, and they will exploit your team's weakness.

There are a number of benefits linked to working with a reputable foreclosure attorney who can who can lead a dynamic defense. Your attorney will work to delay or stop foreclosure, and you will be able to set aside funds that can be used when seeking reinstatement. Furthermore, people who put up a strong defense have an extra leverage and are well positioned for future reinstatement. Working with a defense attorney, borrowers affected by foreclosures can use the legal process to achieve fair loan modification – a solution that allows people to keep their homes. This route reworks the terms of an existing mortgage, thereby lowering monthly payments and making the loan more affordable.

This can play out in various ways, including; the principal balance of the loan can be reduced; the interest rate lowered, and some or all of the past-due payments can even be eliminated. Essentially, homeowners get a new start on their credit report and improve their credit scores over a matter of months. Each situation is a different, and you must work with your trusted advisers to decide the best course of action for you and your family.

While the process may seem overwhelming, the bottom line is … a reputable attorney will be able to set you on the right course toward keeping your home. If you're in trouble, unable to make your mortgage payments or if a foreclosure complaint has already been filed against you, please do your homework and find experienced legal representation.

Market Conditions

Market Conditions
Nearly two-thirds of single-family home builders are reporting a severe lack of credit for housing production, threatening the fragile housing recovery before it has time to take hold, according to a new builder survey of acquisition, development and construction (AD&C) financing conducted by the National Association of Home Builders (NAHB).


"Across the country, home builders and developers are reporting a deterioration in credit availability and intensifying pressure on borrowers with outstanding loans," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "Lenders are cutting off loans for viable new housing projects and producing unnecessary foreclosures and losses on AD&C loans. With the pending expiration of the $8,000 first-time home buyer tax credit, these challenges threaten to halt any positive developments we have seen in the housing market in recent months."

In the latest NAHB survey of AD&C financing conditions, 63 percent of builders stated that the availability of credit for single-family construction loans worsened in the second quarter of 2009.

Builders reporting deteriorating credit conditions cited the following reasons: 80 percent said that lenders are lowering the allowable loan-to-value ratio, 76 percent reported that lenders are not making new loans, 75 percent stated that lenders are reducing the amount they are willing to lend and 62 percent said that lenders are requiring personal guarantees or collateral not related to the project. Two-thirds of respondents reported putting single-family construction projects on hold until the financing climate gets better.

While federal banking regulators continue to maintain that they are not instructing institutions to stop making loans or to indiscriminately liquidate outstanding loans, builders responding to the survey cited the top reason that lenders have given them for restricting the availability of new loans or for tightening the terms of outstanding loans is that "regulators are forcing lenders to do it."

NAHB believes that regulators and lenders should provide leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals, loan modifications and perhaps forbearance on loans to give builders time to complete and sell their inventory.

"There can be no meaningful economic recovery until the flow of credit is restored to housing," said Robson.

Real estate outlook

Real Estate Outlook: Warning of Slow Down?
by Kenneth R. Harney
Though some economic analysts are warning that the housing market's rebound will slow down as the weather turns colder, this week's numbers show no hints of that.


In fact, they're actually pretty warm.

Start with house prices. The Clear Capital Home Data Index, which tracks price movements in thousands of neighborhoods and ZIP codes across the country, reported a 6.3 percent gain last week for the period covering August 27th through September 25th.

The latest index found prices up for the first time since 2006 in two of the hardest-hit real estate markets - Riverside-San Bernadino, California, and Orlando, Florida. Though the gains weren't big - just 1.2 percent in Orlando, and half a percentage point in Riverside-San Bernadino - just the fact that they're finally bottoming out has got to be good news for property owners and sellers there.

Baltimore also saw its first positive price change in seven quarters on the Clear Capital Index, while other major markets continued their multi-quarter strings of gains.

Dallas-Ft. Worth, for example, saw prices rise by an average 2.3 percent. Miami-Ft. Lauderdale was up 3.4 percent, Houston 3.1 percent and even New York, which has had a tough time recently in Manhattan, posted a 1.6 percent jump.

Meanwhile, the mortgage market continued to provide plenty of financing fuel for home buyers looking to use the $8,000 tax credit before it possibly disappears at the end of November.

The Mortgage Bankers Association says average thirty year rates dropped again last week in its national survey -- hitting 4.89 percent -- the lowest they've been since May.

Fifteen year fixed rates decreased to just 4.3 percent, which is the lowest ever recorded in the mortgage association's survey history.

Not surprisingly, record low rates are pulling in massive numbers of new loan applications. Overall applications were up by 16 percent last week. Loans to people planning to buy homes jumped by 13 percent, while refinancing applications soared by 18 percent.

And here's a truly amazing statistic: New mortgage applications to buy houses using FHA loans were 52 percent higher last week than they were a year ago!

With mortgages flying out of banks with interest rates in the mid -to -upper four percent range, you don't spend a whole lot of time worrying about a slowdown in the real estate rebound.

Unless, of course, Congress doesn't extend the $8,000 tax credit into next year.

Published: October 13, 2009

Use of this article without permission is a violation of federal copyright laws.


Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.
He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.

30-Year Fixed-Rate Mortgage Lowest in Four Months, Nearing All-Time Low Set in Survey in March

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.94 percent with an average 0.7 point for the week ending October 1, 2009, down from last week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.10 percent. The last time the 30-year FRM was below 5 percent was the week ending May 28, 2009, when it averaged 4.91 percent.


The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.46 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, down from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 6.00 percent.

The one-year Treasury-indexed ARM averaged 4.49 percent this week with an average 0.5 point, down from last week when it averaged 4.52 percent. At this time last year, the 1-year ARM averaged 5.12 percent.

"Low mortgage rates are helping to stabilize home sales," said Frank Nothaft, Freddie Mac vice president and chief economist. "New home sales in August rose to the highest annualized pace since September 2008 and the inventory of unsold houses fell to the lowest level since February 1983."

Although existing home sales fell somewhat in august, it was still the second strongest showin in 23 months. Furthermore, house prices increased for the second month in a row in July, after adjusting for seasonality, based on the 20-city composite S&P/Case-Shiller Home Price index. Moreover, the increases were more broad-based in July with house prices rising in 17 of these metropolitan areas, compared to 16 in June.