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.