Market Updates

Austin Mortgage Update – Week Ending 2/20/09

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

30-yr Fixed – Lower
This Week:  5.04%
Last Week:  5.16%
1yr Ago:  6.04%

15-yr Fixed – Lower
This Week:  4.68%
Last Week:  4.81%
1yr Ago:  5.64%

5/1 ARM – Lower
This Week:  5.04%
Last Week:  5.23%
1yr Ago:  5.37%

Highlight of This Week’s Major Economic Reports

Headlines were dominated by the new stimulus bill and the newly-announced housing rescue plan, neither of which was positively received by the stock market and helped mortgage rates ease a bit.

In addition to first-time homebuyer tax credits presented in the stimulus bill, President Obama unveiled a plan to help stabilize the housing market by enabling the refinance of Fannie Mae and Freddie Mac owned mortgages into lower-cost loans.  This new initiative is aimed at helping up to nine million homeowners who either (1) owe more than their homes are worth or (2) are struggling to afford their monthly mortgage payments.  As controversial as these plans are, we’ll just have to see if they are effective in resolving the foreclosure epidemic plaguing our country.

On the economic front, so much for talks of deflation … at least for now.  January showed a reversal of trends in prices as the Producer Price Index rose a surprising 0.8%, while the Consumer Price Index ticked up 0.3%.  No need to worry about a resurgence in inflation just yet; however, we’ll need to keep an eye on these reports in the coming months, since inflation will mean bad news for mortgage rates.

What to Look for Next Week

The housing market takes center stage again with the release of the latest Existing and New Home Sales figures.   We’ll also get a final look at last quarter’s GDP.  Fed Chairman Ben Bernanke’s latest report to Congress will surely draw attention as well, as we’ll get a better idea (we hope) of when the Fed may start buying up more securities, which would drive mortgage rates down.

Short-Term Rate Outlook

Stable

Stay Informed:  What’s in the News

Builder Magazine Names Five Texas Cities Healthiest Housing Markets

Five Texas cities swept the top spots on Builder magazine’s list of “Healthiest Housing Markets for 2009.”

Houston ranked first, Austin second, Fort Worth third, San Antonio fourth and Dallas fifth.

Rounding out the top ten were Raleigh, N.C., Seattle, Indianapolis, Ind., Fayetteville, Ark., and Washington D.C.

To compile the list, Builder analyzed the top 75 housing markets in the country, ranking them based on population trends and job growth, perennial drivers of housing demand. They also looked at home prices and the number of building permits.

First American CoreLogic Finds Highest Home Appreciation in Texas

Texas continues its trend of weathering the recession better than most other states. The state’s major metros top the nation in home price appreciation over the last year.

Austin–Round Rock leads the country’s largest core-based statistical areas (CBSA) in home price appreciation with a 3.7 percent increase in 2008, according to First American CoreLogic.

Houston–Sugar Land–Baytown experienced a price appreciation of 3.3 percent over the last year, putting it right behind Austin–Round Rock.

Dallas-Plano-Irving homes appreciated 1.92 percent and San Antonio’s homes 0.17 percent, putting them third and fourth in the nation.

Overall, Texas homes saw an appreciation of 1.83 percent in 2008, putting the Lone Star State sixth among all state rankings.

Fannie, Freddie Increasing Fees

Effective April 1, Fannie Mae and Freddie Mac will increase the “delivery” fees they charge lenders based on FICO scores, down payment amounts and other loan characteristics.

Under the new guidelines, even applicants who assumed that their FICO credit scores would get them favorable rates will be charged more unless they can come up with down payments of 30 percent or more.

For example, a buyer with a 699 FICO score who brings a down payment of about 25 percent to the table will be hit with a 1.5 percent delivery fee at closing under the new guidelines. A buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Someone with a 739 FICO — once considered a platinum guarantee of the best rates available — will get dinged with a quarter-point add-on.

Condominium buyers who cannot come up with a 25 percent down payment will be hit with a three-quarter point add-on penalty, no matter how high their credit score.

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