mortgage

Mortgage rates up a tick

Mortgage rates edged up ever-so-slightly in Bankrate's weekly survey.

The benchmark 30-year, fixed-rate mortgage rose 1 basis point, to 5.56 percent, according to the Bankrate.com's national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.44 discount and origination points.

One year ago, the mortgage index was 6.7 percent; four weeks ago, it was 5.7 percent.

The benchmark 15-year, fixed-rate mortgage moved down 1 basis point, to 4.88 percent. The benchmark 5/1 adjustable-rate mortgage rose 2 basis points, to 4.95 percent.

Hope for housing

Real estate agent Amy Broghamer says a surge of buyers looking for new homes has kept her hopping in 2009.

"I have been so busy this year," she says.

The Cincinnati-based agent says she sold 25 homes in the first half of the year. Her listings are selling in an average of 10 days at 97 percent of their value.

"I have twice as many buyers as I do sellers," says Broghamer, who works for RE/MAX Preferred Group.

Broghamer hopes to sell up to 50 homes this year, compared to 37 in 2008. Recently released national home sales data suggests she's not the only agent experiencing an uptick in her fortunes.

This week, the Department of Commerce reported that new home sales rose 11 percent in June when compared to May. It was the third straight month of increasing transactions. Meanwhile, sales of existing homes also advanced for the third consecutive month, recording a 3.6 percent gain in June, according to the National Association of Realtors.

Weekly national mortgage survey
Results of Bankrate.com's July 29, 2009, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan::
30-year fixed15-year fixed5-year ARM
This week's rate:5.56%4.88%4.95%
Change from last week:+0.01-0.01+0.02
Monthly payment:$943.07$1294.52$880.72
Change from last week:+$1.04-$0.85+$2.01

Gains restricted

Although sales are up nationwide, activity remains modest compared to the period before the economic meltdown began.

For example, June's month-to-month new home sales increase still represents a 21.3 percent drop from June 2008 levels. In addition, buyer interest remains restricted to homes that meet strict criteria, according to several real estate professionals.

Broghamer says most of her 2009 sales have been concentrated in "first-time buyer price ranges."

"They are all staged, pre-inspected and priced at or just below market," she says. "Those are the homes that are selling and getting multiple offers."

Meanwhile, Brian Peart, president of Nexus Financial Group in Atlanta, says foreclosures account for most of the transactions in his market.

"Every buyer is looking for a deal and if the seller is not willing to come off their price huge, the sale is not happening," he says.

In Southern California, homes are selling from entry level up to $450,000, says Jeff Lazerson, president of Mortgage Grader, a mortgage broker based in Laguna Niguel.

By contrast, borrowers looking for mortgages over $729,750 -- the jumbo conforming limit in the Golden State -- are having difficulty finding financing, he says. Homes that carry other costs also remain less attractive to buyers.

"Areas that have high supplemental property tax rates and multiple association fees are not selling because buyers can find similar homes without the excess monthly expenses and overhead," Lazerson says.

Sales up, prices down

Despite the recent sales upswing, few are predicting a new housing boom in the offing.

Peart says that while activity has perked up a bit, "price trends are still heading down."

"I personally see very little chance of (prices) coming back anytime soon because of the huge amount of foreclosures in our market," he says.

Broghamer also believes a full-fledged recovery remains unlikely in the near term. A glut of "grossly overpriced" homes currently on the market and the possibility of climbing mortgage rates are among several potential challenges facing the market, she says. "I'm always a positive person, but I see a good many more threats than hope," she says.

Still, improved sales data has convinced some -- including Dan Green, author of TheMortgageReports.com -- that housing may finally be reaching a bottom, and that the days of screaming bargains may be numbered.

"2010 should be a year of rising interest rates and rising home values. And today's buyers know it," says Green, a loan officer with Waterstone Mortgage in Cincinnati. "It's one reason why home sales are surging -- finding a 'good deal' is tougher with each passing week."

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