30 Year Fixed Rate Mortgage Rates now above 5%
By Admin
The overnight rate for 30 year mortgages has risen above 5%, currently showing as 5.19% for the overnight national average at bankrate.com. The Economist posted a forum in this week’s magazine with quotes from several experts about why government bond rates are rising all over the world. The expectation for passage of the tax rate compromise, the effect of the additional debt as a result of that compromise, and the expectation that the world is moving closer to a sovereign default, particularly in Europe, were all mentioned as factors by the experts.
Here’s another article pondering whether home prices will fall as a result of this unexpected rise in interest rates.
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Each month we try to compare some reports about the national real estate market to what we see in our local markets. While nationally the blog Calculated Risk reported that short sales increased significantly in the 4th quarter, we only saw 27% (a very modest rise if any) of last year’s short sales close in Q4. There was also a report from Marc Hanson that the percentage of REO (bank owned) sales In December fell in California as an overall percentage of sales in that market. In our market the number of closed sales that were bank owned rose from 38 in November to 43 in December (up 12%). Our market agrees with the article that $200-300k is the new normal for homebuilders. The article shows that the percentage of sales in the west under $300k was 42% in 2007, but is now 65%. In Kitsap County, the percentage of sales under $300k was 54% (1945 of 3615 total sales) in 2007 and in 2011 was 72% (1829 of 2538 total sales). More at http://tinyurl.com/7pljyjx
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By hdnelson
The number of closed sales in Kitsap County in January fell about 37% from December and was about 6% lower than a year ago. Pending sales rose about 42% compared to last month and were about 16% higher than a year ago. In December, there were 195 closed sales and 191 pending sales. In January there were 123 closed sales and 275 pending sales. 48% of the closed sales were distressed properties (compared to 32% last month). 46% of the pending sales were distressed properties (compared with 38% last month). Among closed distressed sales, bank owned sales were more than 3 times the number of short sales closed. This month we will report that the median price dropped sharply. This reflects the higher percentage of sales that were distress properties. More at http://www.prowserealestate.com/Blog/Kitsap-Real-Estate-Market-Report-February-2012
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By hdnelson
The influential real estate and economics blog Calculated Risk has posted that “The Housing Bottom is Here”. He differentiates between new home sales increasing - this is happening already - and housing prices reaching a bottom, which he thinks nationally will occur in March 2012.
There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices (especially if prices fall another 4% to 5% NSA between the November Case-Shiller report and the March report). Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales.
See http://www.calculatedriskblog.com/2012/02/housing-bottom-is-here.html
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