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Mortgage Rates Moving

By
Real Estate Agent with RE/MAX Select

 

Mortgage rates were moving all sorts of ways as the first month of the new year came to a close. Some were up, some were down and some haven't moved at all, according to the weekly survey by Freddie Mac.

"Mortgage rates were mixed on news that December's leading indicators, a measure of future economic activity, signaled steady growth in the coming months," the company's chief economist, Frank Nothaft, explained.

Another factor impacting loan costs was new construction, which came in stronger than expected in December; this despite a decline in single-family starts.

Here's the latest read:

  • The 30-year fixed-rate mortgage averaged 6.25 percent with an average 0.4 points as January drew toward its end. That's up from 6.23 percent the previous week and 6.12 percent a year ago. (A point is 1 percent of the loan amount, and should be added to loan rates to reflect the true cost of the mortgage.)

     

  • The average for the 15-year fixed-rate loan was 5.98 percent, also with 0.4 points. That's unchanged from the previous week. But it is higher than the 5.7 percent average at this time a year ago.

     

  • One-year Treasury-indexed ARMs averaged 5.49 percent with an average of 0.5 points. That's down slightly from 5.51 percent the previous week but up from 5.2 percent 12 months earlier.

     

  • Hybrid adjustable rate loans in which the initial rate remains fixed for the first five years, at which time the rates adjusts on an annual basis, averaged 6 percent, again with 0.4 points. That, too, is a bit of a drop off from 5.51 percent. But it is higher than a year ago, when the five-year hybrid ARM was 5.2 percent.

    Moving On

    North and South Carolina were the top destinations for movers last year, according to United Van Line's 30th annual migration study. The survey tracks where its customers moved from and to over the year. It is based upon more than 227,000 interstate moves.

    Alabama experienced its fourth consecutive year as a high in-bound state. Tennessee also captured a spot on the high in-bound list, but it saw fewer people moving in 2006 than it did the year before.

    The Western region was a top migration area, too, with Oregon second only to North Carolina. Nevada has been a high in-bound state since 1986, but Arizona saw roughly 5 percent fewer people moving in last year than it did the year before. Last year was the first in the last 25 that Minnesota had more people coming than going.

    On the negative side, New York, Indiana, Illinois, New Jersey, Pennsylvania and Ohio all lost more people than they gained. Of course, Louisiana did, too. But the states which lost the most residents were Michigan and North Dakota. Maryland continued its 15-year outbound tradition; Connecticut, its fourth.

    Opportunity Knocking for Many Buyers

    Consumers considering a home purchase should contact a Realtor® to take advantage of the current environment now, said National Association of Realtors® President Pat Vredevoogd Combs.

    "Many media reports about trends and developments in the housing market are on a national level and don't capture what's happening in individual communities across the country," said Combs. "As local real estate market conditions continue to evolve, savvy consumers rely on the guidance of real estate professionals who are immersed in the industry."

    Although most sellers are still seeing a very good return on their investment, with a median of more than 50% appreciation over the past six years, some home buyers are worried about the timing of their investment. As inventories rise, many buyers have increased negotiating power, but are unsure of how to structure the best deal. Sellers need help positioning their homes in a competitive marketplace and in attracting and engaging serious buyers.

    Gradual Rise Projected for Home Sales

    After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turn around by summer, according to the latest forecast by the National Association of Realtors.

    David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007.  "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals.  The good news is that the steady improvement in sales will support price appreciation moving forward."

    Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007.  New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

    Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade.  Builders are pulling back on new construction to support prices of remaining inventory.

    The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300.  The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.

    "With all the wild projections by academics, Wall Street analysts and others in the media, it appears that much of the housing sector is experiencing a soft landing," Lereah said.  "Despite the doomsayers, household wealth will not evaporate and the economy will not go into a recession.  If you're in it for the long haul, housing is a sound investment."



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