Every week there are a few important but shorter stories that are of interest to real estate investors, and these are those stories for this week:
New Home Sales Dip, but Supply Very Low
Sales of new homes dipped in January. The government had made an upward revision to the December data which contributed to this dip however. The Commerce Department said that sales slipped by 0.9 percent to a seasonally adjusted 321,000 unit annual rate.
At the same time, the supply of new homes in the market fell to 5.6 months, the lowest since January 2006. That compared to 5.7 months in December. A 6 month supply is generally considered ideal, with higher readings indicating steep price declines.
Home Prices Lowest Since 2002
National home prices fell 4% in the fourth quarter of 2011, putting them at their lowest levels since mid-2002. This represented the fifth consecutive annual loss and the biggest decline since 2008, when prices plummeted more than 18%.
Prices overall have been falling since 2006, down overall by 33.8% from their 2006 peak, according to the S&P Case-Shiller Home Price Index. Many analysts had hoped for market improvement in the last half of 2011, as price drops had been less dramatic in the previous quarters. However, the steep drop the last quarter dashed those hopes, at least for a while. While a recent survey showed that 92% of people surveyed believed that it is a good time to buy a home, that’s not translating into actual buying activity.
FHA Hiking Mortgage Premiums
The FHA is still in financial pain, and is now increasing mortgage premiums to bolster its capital reserves. Beginning April 1st, the Federal Housing Administration, the largest insurer of low-down payment mortgages, will raise the up-front insurance premium it charges borrowers by 75 basis points to 1.75% of the base loan amount.
FHA capital reserves fell below the government mandated level back in 2009, and the situation hasn’t been improving. The increase in mortgage premiums is the first step in actions to improve the level of capital reserves, while other actions could be necessary as well.
Mortgage Rates Hover Just Over All-time Lows
This week the average 30-year fixed rate mortgage interest rate fell to 3.90 percent, just over the recorded all-time low of 3.87 percent hit two weeks ago. The average rate of the 15-year fixed mortgage is 3.17%.
Every week there are a few important but shorter stories that are of interest to real estate investors, and these are those stories for this week:
New Home Sales Dip, but Supply Very Low
Sales of new homes dipped in January. The government had made an upward revision to the December data which contributed to this dip however. The Commerce Department said that sales slipped by 0.9 percent to a seasonally adjusted 321,000 unit annual rate.
At the same time, the supply of new homes in the market fell to 5.6 months, the lowest since January 2006. That compared to 5.7 months in December. A 6 month supply is generally considered ideal, with higher readings indicating steep price declines.
Home Prices Lowest Since 2002
National home prices fell 4% in the fourth quarter of 2011, putting them at their lowest levels since mid-2002. This represented the fifth consecutive annual loss and the biggest decline since 2008, when prices plummeted more than 18%.
Prices overall have been falling since 2006, down overall by 33.8% from their 2006 peak, according to the S&P Case-Shiller Home Price Index. Many analysts had hoped for market improvement in the last half of 2011, as price drops had been less dramatic in the previous quarters. However, the steep drop the last quarter dashed those hopes, at least for a while. While a recent survey showed that 92% of people surveyed believed that it is a good time to buy a home, that’s not translating into actual buying activity.
FHA Hiking Mortgage Premiums
The FHA is still in financial pain, and is now increasing mortgage premiums to bolster its capital reserves. Beginning April 1st, the Federal Housing Administration, the largest insurer of low-down payment mortgages, will raise the up-front insurance premium it charges borrowers by 75 basis points to 1.75% of the base loan amount.
FHA capital reserves fell below the government mandated level back in 2009, and the situation hasn’t been improving. The increase in mortgage premiums is the first step in actions to improve the level of capital reserves, while other actions could be necessary as well.
Mortgage Rates Hover Just Over All-time Lows
This week the average 30-year fixed rate mortgage interest rate fell to 3.90 percent, just over the recorded all-time low of 3.87 percent hit two weeks ago. The average rate of the 15-year fixed mortgage is 3.17%.