Thirty-Year Rates Highest in a Month <http://c.moreover.com/click/here.pl?x940042963&f=8999> - Washington Post <http://www.washingtonpost.com/> - May 18, 3:24 PM - Rates on 30-year mortgages jumped to the highest level in five weeks as investors expressed disappointment that the Federal Reserve continues to remain worried about inflation threats. Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rat…
May 23, 2007
Thirty-Year Rates Highest in a Month
May 10, 2007
May 2007 Money magazine article, “Buyers In Charge” by George Mannes
Source: May 2007 Money magazine article, “Buyers In Charge” by George Mannes
- Current median sales price for a home in the Houston area: $153,000.
- In the Houston area, the median mortgage payment (principal & interest) represents 15% of homeowners’ gross income.
- In Los Angeles the median mortgage payment represents 57% of homeowners’ gross income.
- In the Houston area, home prices have increased 25% during the past 5 years.
- In Los Angeles home prices increased 138% during the past 5 years.
- Houston’s home prices are expected to increase by 3.2% during the next 12 months (just staying ahead of inflation).
- Los Angeles will probably suffer at least a 5% drop in value during the next 12 months.
- Houston’s worst 12-month period for home values: ’84–’85…9.6% decrease.
- Worst 12-month period for Honolulu: ’80-’81…51.9% decrease.
Quotes from Robert Shiller, Finance and Economics Professor at Yale University.
Some parts of the US have recently seen extreme increases in housing prices. It is similar to the stock market speculation leading up to the year 2000.
From 1890 through 1990, the return on residential real estate (nation wide) was just about zero after inflation. But since 1987 prices have increased an average of 6% per year (3.0% - 4.0% in Houston). Professor Shiller expects prices to stay flat or decline (substantially in some areas) over the next 10 years. (My observation: Stock market “experts” made these same kinds of dire predictions back in 2001. They guessed wrong.) He warns against over-investing in residential real estate, or buying oversized homes since we may not continue to see the kind of appreciation we experienced during the past 20 years.
Results from GfK Roper Public Affairs & Media survey of 1,004 homeowners with mortgages.
- 34% of those surveyed had no idea what kind of mortgage they have (fixed or adjustable).
- Of those with adjustable rates, 34% didn’t know what they would do when their interest rate is eventually increased.
- Of the entire group, 28% worry about how they will afford their mortgage payment, homeowners insurance, MUD tax, homeowners’ association fees, and property taxes next year.
February 11, 2007
Steady Climb Seen For Existing Homes
Daily Real Estate News | February 7, 2007
Steady Climb Seen for Existing-Home Sales
Consumers are beginning to respond to more favorable housing market conditions, with existing home sales expected to steadily increase into 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.
“After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008,” says David Lereah, NAR’s chief economist.
Existing-home sales, which reached the third-highest total on record of 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million in 2008.
New construction, on the other hand, will take longer to recover. Following a fourth-best 1.06 million in 2006, new-home sales projected to decline to 961,000 this year and then rise to 971,000 in 2008. “We look for that sector to turn around later in the year,” Lereah adds.
Among the other key highlights of NAR’s new forecast:
- Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. “When new home demand begins to catch up with supply, builders will slowly increase construction — probably in the second half of this year,” Lereah says.
- The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. “Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions,” Lereah says. “When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.”
- The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new-home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
- The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation-adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.
— REALTOR® Magazine Online