How Low Will Mortgage Rates Go?

For the second consecutive week, fixed-rate mortgages reached new all-time records lows, offering another big boost to home buyer affordability. The 30-year fixed-rate mortgage averaged 3.83 percent for the week ending May 10, posting a new record low from last week’s 3.84 percent average. The 15-year fixed-rate mortgage also posted a new record, averaging 3.05 percent this week. Here’s a closer look at mortgage rates for this week: 30-year fixed-rate mortgages: averaged 3.83 percent, with an average 0.7 point, down from last week’s previous record of 3.84 percent. A year ago at this time, 30-year mortgages averaged 4.63 percent. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has averaged below 4 percent for nearly every week — except for one — since Dec. 8, 2011, according to Freddie Mac. 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.07 percent. Last year at this time, the 15-year fixed-rate mortgage averaged 3.82 percent. 5-year adjustable-rate mortgages: averaged 2.81 percent, with an average 0.5 point, dropping from last week’s 2.85 percent average. Last year, 5-year ARMs averaged 3.41 percent. 1-year ARMs: averaged 2.73 percent, with an average 0.5 point, rising from last week’s 2.70 average. A year ago, 1-year ARMs averaged 3.11 percent. Source: Freddie Mac

Thousands of REALTORS® Ready for Housing Rally

It’s an election year, and real estate professionals from across the country want to make sure their voices are heard. More than 10,000 REALTORS® from coast to coast are expected to come together next week to show their support for home ownership in the nation’s capital. The Rally to Protect the American Dream will be held May 17 in front of the Washington Monument in Washington, D.C. The rally will take place during the National Association of REALTORS®' Midyear Legislative Meetings & Trade Expo, May 14-19. Several members of Congress are also expected to attend the rally and listen to real estate professionals speak out about the critical issues facing home ownership today and how important housing is to an overall economic recovery. Among the housing issues to be addressed are the threats mortgage interest deduction, foreclosures and short sales, affordable financing, and ensuring that credit is available for those who want — and are able to — purchase a home. By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Mortgage Giant Offers Another Sign of Stabilizing Market

Fannie Mae, which backs the most loans in the country, announced that it would not need taxpayer aid to cover losses for the first time since the federal government took control over the mortgage giant in 2008. Fannie posted a profit in the first quarter of the year, reporting a net income of $2.7 billion compared to a $6.5 billion loss they reported in the first quarter of 2011. “We expect our financial results for 2012 to be significantly better than 2011,” says Susan McFarland, Fannie Mae’s chief financial officer. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business, will drive our future results.” Several analysts say there are signs of the housing market stabilizing: The decline in home prices is slowing, more Americans are buying homes than a year ago, and housing starts have climbed in the last year. Freddie Mac, also a government-sponsored enterprise and mortgage giant, recently reported a profit as well — a $577 million quarterly net income for the first quarter. Source: “Fannie Mae Profit Signals a Stabilizing Housing Market,” The New York Times (May 9, 2012)

Top 10 Turnaround Housing Markets

Cities hardest hit by the foreclosure crisis are among some of the cities leading a housing recovery, Move Inc. reports in its Top Turnaround Town Report for May. Move Inc. compiled a list of Top Turnaround Towns for this month, using year-over-year housing data from the first quarters of 2012 and 2011. Many of the cities in the top 25 that have seen the biggest boosts in price appreciation are also seeing a big drop to inventories of homes for-sale. Some of the states that suffered the worst of the foreclosure crisis — such as Florida, Arizona, and California — have cities represented on the list, and are showing some of the biggest signs of recovery. The following are the top 10 turnaround markets, according to Move Inc.’s report from May (including the year-over-year median list price increases). 1. Phoenix-Mesa, Ariz. Median list price increase from Q1 2011 to Q1 2012: +26.94% 2. Miami Median list price increase from Q1 2011 to Q1 2012: +24.32% 3. Orlando Median list price increase from Q1 2011 to Q1 2012: +11.54% 4. Boise City, Idaho Median list price increase from Q1 2011 to Q1 2012: +17.53% 5. Naples, Fla. Median list price increase from Q1 2011 to Q1 2012: +14.34% 6. Oakland, Calif. Median list price increase from Q1 2011 to Q1 2012: +7.07% 7. Fort Myers-Cape Coral, Fla. Median list price increase from Q1 2011 to Q1 2012: +18.27% 8. Lakeland-Winter Haven, Fla. Median list price increase from Q1 2011 to Q1 2012: +12.95% 9. Sarasota-Bradenton, Fla. Median list price increase from Q1 2011 to Q1 2012: +12.56% 10. Tampa-St. Petersburg-Clearwater, Fla. Median list price increase from Q1 2011 to Q1 2012: +11.92% “We continue to see signs of stabilization and recovery on the local level throughout the country,” says Steve Berkowitz, CEO of Realtor.com operator, Move Inc. “By all indications, the 2012 housing market is unfolding as we expected, and we’re encouraged with the progress local markets are making. However, much will depend on the continued health of our economy, specifically job rates, and how lenders will release their foreclosure inventories.” See what other real estate markets made Move Inc.’s top 25 list of turnaround towns. Source: Realtor.com

TransUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009

The rate of borrowers past due by 60 days or more on their mortgage payments fell in the first quarter to 5.78 percent, the lowest delinquency rate since 2009, according to TransUnion. The pace was lower in all but eight states, with Florida and Nevada posting the highest rates. TransUnion forecasts a decline in delinquency rates this year as gradual improvements in the economy help more borrowers to repay their home loans. Source: "TransUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009," Wall Street Journal (05/09/12)

Experian: Lenders May Want to Expand Borrowing Pool

A new study estimates that 17.3 million prospects for new mortgages are being overlooked by lenders. Many of these prospects hold little credit history and, therefore, may be viewed as a risk to some lenders in making a loan. Experian, a credit analytics provider, notes that lenders will need to widen their market base if they are to grow their portfolios. That may require lenders to expand who they're lending to, including finding creditworthy prospects who may have lower credit scores than the typical prime borrowers. "Identifying near-prime borrowers is a trend in place for the last eight years, but lately there is a renewed focus as small- to medium-sized lenders get into the mortgage space more," Michele Pearson, vice president of product management at Experian, told HousingWire. "We want to give those folks a chance to identify those borrowers." Otherwise, lenders may miss out on the potential to grow new mortgages at an estimated $3.86 billion, Experian estimated in a recent white paper. Source: “Experian: Mortgage Lenders Looking to Draw Lower-Credit Borrowers,” HousingWire (May 8, 2012)

Home Prices to Rise 4% Per Year?

Have home prices finally hit bottom? Many analysts think so. According to the latest forecast by Fiserv, the market watcher sees a big boost to home prices on the horizon, projecting that home prices will rise nearly 4 percent per year for the next five years. The real estate markets expected to see the biggest increases in home prices will likely be those hardest hit the last few years by foreclosures, such as in Phoenix and Las Vegas, and areas where prices have fallen the most, according to Fiserv’s forecast. Housings rising affordability mixed with falling inventories of for-sale homes are the main factors driving the expected price increases, according to Fiserv. Initially, investors are expected to help drive most of this price increase, and then followed by first-time and trade-up buyers as they re-emerge in bigger numbers to the market. Source: “U.S. Home Prices Could Rise 4% a Year, Forecast Says,” USA Today (May 8. 2012)