Thirty year mortgage rates have been attempting to push through the 5% ceiling over the past few days as continued gains in the stock market have beaten up on bond prices. Jumbo rates remain frustratingly in the 6.875% range stifling any potential recovery in the high-end home sector. Government loan rates for thirty-year mortgages are now all in line with conventional rates hanging right around 5% for the past several weeks for VA, FHA and Rural Development. High-rise condo financing remains extremely difficult to obtain here in Florida though some local banks are offering in-house portfolio ARMs such as my 5/1 and 3/1 to try and help second-home buyers take advantage of the incredible deals out there right now.
We’ve had some more mixed news on the housing front as builder confidence sank to an eight-month low while the NAHB/Wells Fargo Housing Opportunity Index showed an increase in home affordability in the first quarter to 72.5% making it the best time in two decades to buy a home.
Housing starts for April fell 12.8% but, upon closer inspection of the numbers, most of that decline was in apartment and condominium construction while single family home starts actually ticked up slightly for the month.
One last note of interest…HUD has backed away from its earlier consideration of allowing local government and banks to make short-term bridge loans to first-time homebuyers for their $8,000 tax credit to use as a down-payment for the purchase of a home with a federally insured mortgage. HUD officials, upon closer examination of the proposal, felt it too much resembled the seller-funded home-buyers assistance programs of days gone by. Federally insured mortgages which allowed for the borrower to receive gift funds under these programs defaulted at three times the average rate. FHA now requires that all borrowers make a minimum down payment contribution of 3.5%. This supersedes the recent legislation passed in the Florida legislature to allow for such programs.
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