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Each month, This Month In Real Estate features our real estate experts that guide you through national real estate news. Check in at the end of each month to stay informed and feel free to call me with any questions.
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WASHINGTON, DC – March 25, 2009 – U.S. home prices rose 1.7 percent on a seasonally-adjusted basis from December to January, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. In December, the FHFA first reported a 0.1 percent increase, which was later revised to a 0.2 percent decline. FHFA ( www.fhfa.gov ) regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as authorized by the Housing and Economic Recovery Act of 2008.
For the 12 months ending in January, U.S. prices fell 6.3 percent, and the U.S. index is 9.6 percent below its April 2007 peak.
The FHFA monthly index is calculated using the purchase price of houses sold or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally-adjusted monthly price changes from December to January ranged from -0.9 percent in the Pacific Division to +3.9 percent in the East North Central Division.
Month-to-month changes in the geographic mix of sales activity explain most of the unexpected rise in prices in January. Home sales disproportionately occurred in areas with the strongest markets, according to the release issued by FHFA. “While it is difficult to perfectly control for changing geographic mix in estimating house price indexes, the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic,” according to the FHFA release.
Reported sales volume, in absolute terms, was relatively low in January. As a result, the FHFA warns that relatively large revisions could occur later.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
U.S. mortgage applications spiked in the first full week of 2009 as record low interest rates triggered the highest demand for loan refinancing in 5-1/2 years, according to the Mortgage Bankers Association.
Low mortgage rates, however, have yet to fuel a surge in loans for home purchases.
The MBA said its seasonally adjusted index of mortgage applications for the week ended Jan. 9 increased 15.8% to 1,324.8. That’s the highest reading since the week ended July 11, 2003, when it reached 1,358.2.
Thirty-year mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan in November to buy as much as $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The refinance share of applications increased to 85.3% from 79.8% the previous week, the highest level since the MBA started conducting its survey in 1990.
Spencer Rascoff, chief operating officer at Zillow.com, an online real estate service company based in Seattle, said loan requests to his company are up more than 200% from just two months ago, with loan requests on pace to hit about 25,000 in January and loan quotes on pace to hit 200,000.
“Many experts agree that rates will stay relatively low for at least the next few months since the federal government is now committed to buying mortgage-backed securities to keep borrowing costs low,” Rascoff said.
Here’s a sampling of interest rate drops:
30-year-fixed mortgages, averaged 4.89%, down 0.18 percentage point from the previous week, the lowest level recorded in the MBA’s survey’s history.
15-year fixed mortgage averaged 4.63%, down from 4.67% the previous week.
One-year ARMs decreased to 5.89% from 5.90%
Source: Reuters, CNNMoney.com (01/21/2009)