Fixed-rate mortgages at 6.16% — still near lowest level for the year

Rates on 30-year mortgages edged up slightly this week but still remained near the lowest level for the year.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.16 percent this week.
That was the second-lowest level for the year, up only slightly from the low for this year of 6.14 percent, where 30-year rates had been for the two previous weeks.
That was the lowest for 30-year mortgages since they averaged 6.13 percent the week of Dec. 21.
Analysts said financial markets received conflicting news over the past week with worse-than-expected readings on inflation, which could cause interest rates to rise, followed by Wednesday’s decision by the Federal Reserve to signal that rate cuts were possible later this year if the economy remains sluggish.
Frank Nothaft, chief economist at Freddie Mac, said the bond market had basically taken the inflation readings “in stride.”
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, edged up slightly this week as well, rising to 5.90 percent, up from 5.88 percent.
Five-year adjustable rate mortgages averaged 5.91 percent, up from 5.90 percent last week.
One-year adjustable mortgages dipped to 5.40 percent, down from 5.42 percent last week.
The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages both carried a nationwide average fee of 0.4 point. The five-year mortgage had an average fee of 0.6 point while the one-year mortgage carried a 0.7 point average fee.
A year ago, rates on 30-year mortgages stood at 6.32 percent while 15-year mortgages were at 5.97 percent, five-year adjustable rate mortgages averaged 5.96 percent and one-year ARMs were at 5.41 percent.
Rates are still at historically low levels. For more infomation about buying, selling or financing Corona Real Estate, Norco Real Estate or Riverside County Real Estate go to http://www.951info.com Elite Properties and Finance

Home Sales Rise Unexpectedly in Feb.
Existing Home Sales Rise in February but Worries About Subprime Lending Increase
Sales of existing homes unexpectedly rose in February by the largest amount in nearly three years, but analysts expressed fears that the recovery for the battered housing industry will be slowed by spreading troubles in mortgage lending.
The National Association of Realtors reported Friday that sales of existing homes rose by 3.9 percent last month, pushed higher by a sharp increase in sales activity in the Northeast. It was the biggest increase since a similar increase in March 2004.
The increase pushed sales up to a seasonally adjusted annual rate of 6.69 million units, still 3.6 percent lower than a year ago. Sales fell by 8.5 percent for all of last year as housing hit a sharp slowdown after setting sales records for five straight years.
Analysts, who had been looking for sales to decline in February, said the increase reflected warmer weather in the Northeast and Midwest and said that the housing industry is still not on a sustained rebound.
"Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications," said Ian Shepherdson, chief economist at High Frequency Economics.
The price of a median home sold last month dropped to $212,800, down by 1.3 percent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago.
Analysts said the price declines were helping to lure buyers back into the market. But analysts expressed concerns about what the growing problems in the subprime lending market will do to the prospects for future sales.
Subprime mortgages were offered to people with weak credit histories who could not qualify for standard types of mortgages. Now an increasing number of those mortgages are going into default. That is forcing lenders to tighten up on their loan standards, meaning people who would have qualified for subprime mortgages will not be able to do so.
David Lereah, chief economist for the Realtors, said he believed that demand for homes could be cut by 150,000 to 200,000 annually over this year and 2008 because of the lending troubles.
"Our view is that the tightening in the subprime market will have a negative impact on home sales," Lereah said. "It probably won't postpone the recovery (in housing) but it will slow it."
By region of the country, sales were up 14.2 percent in the Northeast, a gain that was attributed in part to warmer-than-normal weather this winter, which spurred sales.
Sales of existing homes were up 3.9 percent in the Midwest and 1.6 percent in the South, while sales were unchanged in the West. Lereah said the reluctance of sellers in the West to trim prices was holding back a rebound in that region.
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New-housing construction rebounds
New-home construction rebounded in February following a steep January slide. But analysts pointed to a further decline in building permits as a worrisome signal of future problems for the troubled housing industry.
Construction of new homes and apartments rose 9 percent in February to a seasonally adjusted annual rate of 1.525 million units, the Commerce Department reported Tuesday. Construction had fallen 14.3 percent in January to the slowest pace in more than nine years.
Even with the better-than-expected rebound, activity remained 28.5 percent below the level of a year ago, underscoring housing's steep downturn.
Builders' applications for new permits, considered a more reliable gauge of future activity, continued falling in February, dropping 2.5 percent to an annual rate of 1.532 million units. That marked the 12th decline in the past 13 months in building permits.
The continued drop in permits was seen as a troubling sign that the fallout from the housing correction, which has already slowed economic growth considerably, is not over.
Patrick Newport, an economist with Global Insight, forecast that housing construction would decline 19 percent this year, shaving overall economic growth nearly 1 percentage point for the entire year.
Last year, housing construction fell by 12.9 percent, reflecting a sharp slowdown in sales of both new and existing homes as mortgage rates rose and demand slackened after five boom years.
Weakness in the subprime-lending market, which provides loans to borrowers with poor credit, contributed to the Feb. 27 stock-market plunge.
David Seiders, chief economist for the National Association of Home Builders, said the organization's survey of builder sentiment tumbled in early March with many builders expressing concerns that tighter loan requirements, prompted by rising mortgage delinquencies, would hurt sales.
"About 30 percent of the builders responding to the survey said their sales have been adversely affected since the beginning of the year by the tightening of loan standards," Seiders said.
Normally, the Federal Reserve could be expected to alleviate a credit crunch by cutting interest rates. However, the central bank is expected to keep rates unchanged at the end of a two-day meeting today out of concern that the slower economy has not sufficiently dampened inflation pressures. Two closely watched gauges of inflation at the wholesale and retail levels showed big gains in February.
By region of the country, the West led the gains in construction, posting a 26.4 percent jump, which was the best showing since January 1997. Construction activity was also up in the South, increasing by 18 percent, the biggest percentage gain in that region in nearly two years.
Construction fell by 29.7 percent in the Northeast, the biggest one-month plunge in that region since December 1990, while construction fell in the Midwest by 14.4 percent after an even bigger 16.4 percent January decline.
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Mortgage-fraud cases on the rise
The number of mortgage-fraud cases investigated by the FBI almost doubled the past three years, reflecting a problem that is "pervasive and growing," the bureau said Wednesday in its annual report on financial crimes.
The bureau said its mortgage-fraud cases increased from 436 in 2003 to 818 in 2006, and acknowledged that its case load likely represents a small piece of the problem.
The FBI said mortgage fraud is difficult to track for a variety of reasons. For starters, the industry is not required to report fraud. Moreover, the sale of mortgage loans on secondary markets can "conceal or distort the fraud," thereby reducing the number of cases reported.
"The true level of mortgage fraud is largely unknown," the agency's report said.
The bureau said fighting mortgage fraud is a priority due to the impact of mortgage lending and housing on the broader economy.
Recently, shares of companies that lend to subprime borrowers -- people with blemished credit histories -- have been battered as delinquencies and foreclosures increase in the subprime mortgage market.
Britain's HSBC Holdings PLC, the world's third-largest bank, said earlier this week that its bad-debt charges increased 36 percent in 2006.
The report said mortgage fraud comes in two broad varieties: "fraud for profit," which is largely committed by industry insiders and involves practices such as falsely inflating property values, and "fraud for housing," which is committed by borrowers and involves actions such as acquiring a house under false pretenses.
The bureau said it is cooperating with trade associations representing mortgage bankers and the government-sponsored companies that purchase mortgages, Fannie Mae and Freddie Mac, to raise awareness of mortgage fraud.
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Fast Facts

Calif. median home price - January 07: $559,640 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region January 07:Santa Barbara So. Coast $1,150,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region January 07:High Desert $317,380 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Third Quarter 06:24 percent (Source: C.A.R.)

Mortgage rates - week ending 2/22:30-yr. fixed: 6.22%; Fees/points: 0.5%15-yr. fixed: 5.97%; Fees/points: 0.5%1-yr. adjustable: 5.49%; Fees/points: 0.7%(Source: Freddie Mac)

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Happy President's Day from Elite Properties and Finance.

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Calif. median home price - December 06: $567,690 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region December 06:Santa Barbara So. Coast $1,250,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region December 06:High Desert $324,560 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Third Quarter 06:24 percent (Source: C.A.R.)

Mortgage rates - week ending 2/8:30-yr. fixed: 6.28%; Fees/points: 0.3%15-yr. fixed: 6.02%; Fees/points: 0.3%1-yr. adjustable: 5.49%; Fees/points: 0.7%(Source: Freddie Mac)

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The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 9. The Market Composite Index, a measure of mortgage loan application volume, was 639.8, an increase of 1.5 percent on a seasonally adjusted basis from 630.1 one week earlier. On an unadjusted basis, the Index increased 4.5 percent compared with the previous week and was up 10.9 percent compared with the same week one year earlier.
The Refinance Index increased 4.5 percent to 2031.7 from 1943.4 the previous week and the seasonally adjusted Purchase Index decreased 1 percent to 400.7 from 404.7 one week earlier. The seasonally adjusted Conventional Index increased 1.8 percent to 954.3 from 937.2 the previous week, and the seasonally adjusted Government Index decreased 2.2 percent to 115.4 from 118 the previous week.
The four week moving average for the seasonally adjusted Market Index is down 1.1 percent to 628.1 from 634.9. The four week moving average is down 2.4 percent to 404 from 413.8 for the Purchase Index, while this average is down 0.2 percent to 1941 from 1944.6 for the Refinance Index.
The refinance share of mortgage activity remained unchanged at 46.1 percent of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 21.2 from 22.3 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 6.24 percent from 6.23 percent, with points decreasing to 1.06 from 1.09 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.94 from 5.96 percent, with points increasing to 1.13 from 1.1 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 5.8 from 5.84 percent, with points increasing to 0.84 from 0.78 (including the origination fee) for 80 percent LTV loans.
**SPECIAL NOTES**
The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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