http://blog.pdxloan.com/2009/01/real-estate-market-report-jan-6-2009.html - Latest Real Estate Report Newsletter from Ed Bisquera Mortgage Express Portland Oregon & Vancouver Washington. Visit my blog for the full report and for past issues.
Excerpt: The Big Question - How Are Housing Prices Performing?
In the past week we gave some perspective regarding how housing prices have performed in the long run. Despite the recent precipitous drop in prices, housing as an investment performs strongly when you look at the big picture. On the other hand, we cant ignore the fact that prices have fallen significantly in the past year and the overall economy is not likely to recover until home prices stop dropping. So, the big question is, when will home prices stop dropping? With so many foreclosures on the horizon, there may seem to be no end in sight to the current cycle. Once again, lets add some perspective.
Remember, a few years ago when it seemed that home prices would not stop rising? Everyone was outbidding each other to get the next property. Of course we knew that home prices could not skyrocket forever because people would not be able to afford to purchase. The same applies here. Home prices cant just keep dropping. As prices become lower, affordability will go up and more Americans will purchase real estate. Recent record low rates will help move that date forward as well. Even more important, as buyers come back to the market and prices stop falling, lenders will be more confident in lending in a stable price environment. This is why price stability is so important to our overall financial recovery. When will this happen? Watch existing home sale statistics as we ring in the New Year, as they will be the most important indicator of whether buyers are returning to the game.
Weekly Interest Rate Overview: The Markets.
Mortgages continued their assault on record lows as they dropped for the ninth week in a row, although the rate of decline has slowed in the past few weeks. Freddie Mac announced that for the week ending December 31, 30-year fixed rates averaged 5.10%, down from 5.14% the week before. The average for 15-year fixed fell to 4.83%. Adjustables were mixed with the average for one-year adjustables decreasing to 4.85% and five-year adjustables rising to 5.57%. A year ago 30-year fixed rates were at 6.77%. "Rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all time record low since Freddie Macs survey began in April 1971," said Frank Nothaft, Freddie Mac vice president and chief economist. "Since the end of October of this year, these rates have declined by about 1-1/3 percentage points, or a reduction of approximately $173 a month for a $200,000 loan. As a result, the number of refi applications for conventional mortgages jumped over 500 percent between the weeks ending on October 31st and December 26th. Lower rates and falling house prices are also making homeownership more affordable to potential homebuyers. For instance, house prices fell 18 percent over the 12-month period ending in October, according to the S&P/Case-Shiller® 20-city composite index. Every city posted a second consecutive month of decline in October. From its peak set in July 2006, the composite index is down 23.4 percent."
Current Indices For Adjustable Rate Mortgages and Rates...
Read the rest of the report at http://blog.pdxloan.com/2009/01/real-estate-market-report-jan-6-2009.html
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