Extension of Tax Credit Clears One Hurdle

The United States House of Representatives has just passed HR 5623, the Homebuyer Assistance and Improvement Act of 2010, by a vote of 409-5. This bill extends the deadline for closing tax credit eligible transactions from June 30 to September, 30, 2010. The bill moves to the Senate where the outcome is much less certain. NAR will continue to provide updates as the events move forward.

Mortgage Rates Hit an All-Time Low

Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac. Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

Weekly Information 6/26

Mortgage interest rates were mostly flat this past week despite weakness in housing data. May Existing Home Sales fell 2.2% on expectations that sales would increase by 7.0%. May New Home Sales fell by 32.7% to 300k annualized units, its lowest level since the report was created in 1980. May New Home Sales were expected to fall, but only by 14.5%. Other economic data of note included weekly jobless claims which fell slightly more than expected. May Durable Goods Orders were in line with expectations. Overall, orders fell by 1.1%. Excluding transportation orders, though, orders increased by 0.9%. Q1 GDP was revised lower to +2.7% on lower consumer spending. As expected, the Fed left short term rates unchanged at the conclusion of its FOMC meeting. Also, the Treasury auctioned $108 billion in new debt, which was met with reasonably strong demand.

Fannie Mae Cracking Down on Strategic Defaults

Fannie Mae announced plans Wednesday to get tough with strategic defaults.

Fannie said that borrowers who default when they are able to pay won’t be able to get another Fannie Mae mortgage for seven years. The current wait is five years. While that might sound like an empty threat, in an environment where Fannie Mae and Freddie Mac are providing most home financing, it may have some teeth.

Fannie also threatened to sue home owners who walk away from their mortgages in states where such deficiency judgments are legal.

The announcement attracted some criticism because of Fannie Mae's refusal so far to allow hard-pressed borrowers to negotiate a lowering of their principal amount, which is something lenders are now agreeing to after prodding by the federal government. Critics contend the company should try principal write-downs before it penalizes borrowers for choosing to walk away.

Source: CNNMoney.com, Tami Luhby (06/23/2010)

Housing Inventory Is Rising Again

Housing inventory is rising again, increasing the odds that prices will take another dip, says real estate data company Altos Research.

Housing inventory fell steadily beginning in April 2009 until the end of the year. In January 2010, it began rising in the 10 cities that Altos tracks: Boston, Chicago, New York, Los Angeles, San Diego, San Francisco, Miami, Las Vegas, Denver, and Washington, D.C.

“If the numbers don't continue to move up pretty significantly, we could very well start 2011 at the same place we started in 2009," says Scott Sambucci, Althos’s vice president of data analytics.

Source: Inman News, Andrea V. Brambila (04/09/2010)

GREEN Definitions of the Month

Adaptability
Design strategy that allows for multiple future uses in a space as needs evolve and change. Adaptable design is considered a sustainable building strategy as it reduces the need to resort to major renovations or tearing down a structure to meet future needs.
Certified Lumber
General shorthand term for lumber that has been certified sustainable harvest by an independent certification authority.
Chain of Custody
A document that tracks the movement of a wood product from the forest to a vendor and is used to verify compliance with Forest Stewardship Council guidelines. A "vendor" is defined as the company that supplies wood products to project contractors or subcontractors for on-site installation.

Weekly Information

Mortgage interest rates improved slightly this past week on mixed economic data. Data weaker than expected included May Housing Starts, down 10% on expectations that starts would be down 2.8%. Single family housing starts were down 17.2%, the largest decline since 1991. May Housing Permits fell 5.9% on expectations that they would be up 3.4%. Weekly jobless claims increased by 12k on expectations that they would fall by 2k. The Philadelphia Fed Business Index fell to 8.0 on expectations that it would come in at 18.8. On the flip side, May Industrial Production and Capacity Utilization were both better than expected. The New York Empire State Manufacturing Index for June increased from May levels. Also of note, May inflation data continued to show tame inflation.

May 2010 Longmont Residential Statistics

Longmont Single Family homes sales rose 22.5% over last year, YTD we are up 15.8%. Average days to contract fell from 70 days to 49 days. The median sales price rose 3.0% from $214,000 to $220,500, and average sales price went up 1.2% ($241,096 to $244,102)

Longmont Attached Dwellings sales rose 33.3% over last year, YTD we are up 39%. Avg. days to contract also fell 34.2%, from 79 to 52 days. The median sales price was down -19.9% from $171,000 to $137,000, and avg sales price dropped -10.3% ($181,243 to $ 162,626)