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Rate Update

Mortgage rates remained at their lowest levels for the year, and . Freddie Mac reported that in the first quarter of 2011 fixed-rate loans accounted for more than 95% of refinance loans, regardless of whether the original loan was an ARM or a fixed-rate loan. An increasing share of refinancing borrowers chose to shorten their loan terms during the first quarter. Of borrowers who paid off a 30 year fixed-rate loan, 34% chose a 15 or 20 year loan term, the highest such share since the first quarter of 2004. The MBA’s weekly Mortgage Application Survey was up for the third week in a row with refinancing activity increasing over 13%.

Housing Starts were down 10.6% for April while Building Permits were down 4%. Housing Starts have certainly not followed the growth in the job market – probably due to the high inventory in existing homes. Starts for multi-family units dropped 24%. Existing Home Sales decreased 0.8% in April. These numbers reminded us that the overall housing market is poor. Nationally, the median sales price was $163,700, down 5.0% from a year earlier, and the inventory of existing homes is now over 9 months at the current pace. Locally, real estate faired a little better in April, proving once again that real estate is local. Existing Home Sales in SLO County increased 24.2% from one year ago while sales of all homes, including new and existing single-family detached homes and condominiums, increased 9.5% in April from the same month a year ago. The median price also increased 0.7% from April 2010 to $357,500.

Currently, the 30 Year Fixed is 4.250% (4.427% APR) and the 15 Year Fixed is 3.500 (3.810% APR). The benchmark 10 year Treasury note yield is down to 3.11% on continued worries about the European debt problems. Later this week, we will see New Home Sales, Durable Goods, Personal Income, Pending Home Sales, and Consumer Sentiment.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com