Mortgage Rates Rise Above 4 Percent

by The Associated Press
March 22, 2012

The average U.S. rate on a 30-year fixed mortgage rose above 4 percent for the first time in more than three months. The sharp increase suggests the window to buy or refinance a home at historically low rates is closing.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan jumped to 4.08 percent, up from 3.92 percent the previous week. A month ago, it touched 3.87 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage rose to 3.30 percent, up from 3.16 percent last week and a record low of 3.13 percent two weeks ago.

Mortgage rates are rising because they tend to track the yield on the 10-year Treasury note. The improving economy has driven yields on long-term U.S. Treasury bonds higher in recent weeks.

The average rate on the 30-year mortgage had been below 4 percent since the first week in December. Low mortgage rates have been among a number of signs that the housing market is starting to pick up.

The past two months made up the best winter for sales of previously occupied homes in five years, when the housing crisis began.

Builders have grown more optimistic over the past six months after seeing more people express interest in buying a home. They have responded by requesting the most permits to build single-family homes and apartments since October 2008.

Optimism is also rising because the job market has strengthened. Employers have added an average 244,600 jobs per month from December through February. That has helped lower the unemployment rate to 8.3 percent, the lowest level in nearly three years.

Even with the improvement, the housing market is still weak. Millions of foreclosures and short sales when a lender accepts less than what is owed on a mortgage remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy, which has led to a drop in homeownership.

Economists say housing is years away from returning to full health.

To calculate the average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees for the 30-year and 15-year fixed loans were 0.8, unchanged from 0.8 last week.

For the five-year adjustable loan, the average rate rose to 2.96 percent from 2.83 percent, and the average fee edged down to 0.7 from 0.8.

The average on the one-year adjustable loan rose to 2.84 percent from 2.79 percent, and the average fee was unchanged at 0.6.

Market Update for March 19th

Buyer activity: up. Seller activity: down. That could soon change if sellers begin to increase their activity levels entering the spring market. They've understandably been a tad shy lately, but the changing landscape is starting to register with well-informed homeowners looking to move. Buyers have shown that they refuse to let one of the most attractive purchase environments pass them by. As activity revs up this spring, not all segments will benefit equally. Which is exactly why the numbers are so central to assessing both the breadth and depth of market recovery.

In the Twin Cities region, for the week ending March 10:

• New Listings decreased 0.3% to 1,450
• Pending Sales increased 20.9% to 995
• Inventory decreased 24.3% to 17,899

For the month of February:

• Median Sales Price decreased 1.4% to $138,000
• Days on Market decreased 9.1% to 145
• Percent of Original List Price Received increased 2.6% to 90.6%
• Months Supply of Inventory decreased 35.8% to 4.7

Mark Allen, RCE, CIPS, CRS
Chief Executive Officer
Minneapolis Area Association of REALTORS®
952.988.3134
www.mplsrealtor.com

Foreclosures in Minnesota, 2011 Report

There were 21,298 homes sold at Sheriff's Sale in 2011 in Minnesota, the fewest since 2007. However, it also reflects the fact that the foreclosure crisis is not over yet, as it means that over 1% of EVERY HOME in Minnesota was lost to foreclosure last year.

It also brings the cumulative total of foreclosures in Minnesota since we began tracking these numebrs in 2005 to over 135,000.

The comprehensive report, titled “Foreclosures in Minnesota”, analyzes sheriff’s sale data, the primary means of identifying foreclosures, from each of Minnesota's 87 Counties. Minnesota is unique among other states in the availability of current, comprehensive foreclosure sale data.

In addition to the 21,298 homes that were sold in a foreclosure sale, more than 54,500 households continued to struggle with mortgage payments and received a pre-foreclosure notice from their lender during the year. (For more information about pre-foreclosure notices, visit the Center's blog at www.hocmn.org).

The Minnesota Homeownership Center, Greater Minnesota Housing Fund, Minnesota Housing and Family Housing Fund published the report, with research provided by HousingLink.

As always, struggling homeowners are encouraged to seek the help of a certified foreclosure prevention specialist that is a member of the Homeownership Advisors Network, as soon as possible. Waiting limits a homeowner’s options.

Published By Minnesota Association of REALTORS 3/12/2012