Market Updates

Austin Mortgage Update – Week Ending 1/30/09

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Slightly Lower
This Week: 5.10%
Last Week: 5.12%
1yr Ago: 5.68%

15-yr Fixed – Unchanged
This Week: 4.80%
Last Week: 4.80%
1yr Ago: 5.17%

5/1 ARM – Slightly Higher
This Week: 5.27%
Last Week: 5.24%
1yr Ago: 5.32%

Highlight of This Week’s Major Economic Reports

Thanks in large part to falling prices and 50-yr-low interest rates, Existing Home Sales rebounded 6.5% in December to yield the biggest one-month increase since 2002. On the other hand, despite astounding offers for 3.99% fixed rates, New Home Sales didn’t fare as well, with inventories now at a whopping 12 months.

The state of the economy obviously hasn’t helped with home sales. GDP in the 4th quarter contracted 3.8%, which was the steepest decline in 27 years, and weekly unemployment claims continue to hover in the 500k range.

With the economy still weak and inflation in hibernation, the Fed not surprisingly kept short-term rates unchanged. They did, however, provide some assurance to the markets by proclaiming their intent to buy Treasuries and mortgage-backed securities to keep interest rates steady.

What to Look for Next Week

February will be rung in with all eyes on the latest jobs report. Not much optimism lies with these figures, so mortgage rates will be more likely driven by the stock market than these results.

Short-Term Rate Outlook

Stable to Slightly Higher

Stay Informed: What’s in the News

“Texas Attracts International Investors” from Austin Business Journal

Despite increasing global real estate turmoil, Texas remains an attractive play for foreign investors looking for opportunities in the United States, a report shows.

The Association of Foreign Investors in Real Estate ranks members’ top cities for U.S. and global investment in 2009. Houston ranked fifth, while Austin ranked 11th, tying with Las Vegas, Phoenix, Orlando, Atlanta, San Diego and San Jose, Calif.

Washington D.C. claimed the first spot.

The United States ranked first among nations in terms of opportunities for capital appreciation.
Conducted in fourth quarter 2008, the survey polled the association’s members who collectively hold about $1 trillion in real estate worldwide.

“Freddie Mac to Let Residents Rent Homes After Foreclosure” from USA Today

Freddie Mac on Friday plans to announce a first-of-a-kind plan that lets homeowners and tenants temporarily stay in homes in foreclosure by renting them back, an effort to stop many of the sudden evictions that have come along with the housing crisis. The program will let thousands of qualified former homeowners, as well as families renting from landlords, enter into a monthly lease on their homes after they have been acquired by Freddie Mac through foreclosure.

“More Foreclosures Coming” from CNNMoney.com
A large number of bank-owned homes that have yet to be listed for sale indicate that even more excess housing inventory is queuing up, and the long line waiting to hit the market is cause for concern.

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the Multiple Listing Services (MLS) maintained by real estate agents.

“It’s not surprising that RealtyTrac has more listings. MLSs traditionally focus on individuals selling their own homes,” said Dr. Jim Gaines, economist at the Real Estate Center at Texas A&M University.

RealtyTrac found that MLS listings for four states contained only a third of the foreclosures RealtyTrac has in its database. One problem may be system overload. Gaines says that, historically, the foreclosure market has not predominantly used local MLSs to market repossessed homes. But because of the surge in the volume of foreclosures, the banks need to move homes quickly, so MLSs are now being leaned on more heavily.

Gaines adds that, anecdotally, real estate experts report that as much as 40 percent of overall listings on MLSs in major metro areas are foreclosures. The trouble with discerning what these findings really mean for the market, however, is that no one maintains specific foreclosure sales data. The government doesn’t keep up with it, and neither does any real estate service.

Looking for more information about the Austin Real Estate Market? If so, please do not hesitate to contact me directly.

Kevin Wilhelm, ABR GRI
Coldwell Banker United, Realtors
512-417-3915