Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.24 percent with an average 0.5 point for the week ending February 28, 2008, up from last week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.18 percent.

The 15-year FRM this week averaged 5.72 percent with an average 0.5 point, up from last week when it averaged 5.64 percent. A year ago at this time, the 15-year FRM averaged 5.92 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.43 percent this week, with an average 0.4 point, up from last week when it averaged 5.37 percent. A year ago, the 5-year ARM averaged 5.93 percent.

One-year Treasury-indexed ARMs averaged 5.11 percent this week with an average 0.7 point, up from last week when it was 4.98 percent. At this time last year, the 1-year ARM averaged 5.49 percent

"Long-term fixed mortgage rates trended up for a third week, bringing rates on 30-year and 15-year fixed-rate mortgages back to their levels of last November," said Frank Nothaft, Freddie Mac vice president and chief economist. "Refinancing activities, which had surged to a 12-month high in January, according to Freddie Mac's monthly refi share report, are likely to ebb following this recent rise in rates."

Source: Freddiemac, Primary Mortgage Market Survey® (PMMS®)
 

Foreclosure filings nationwide increased 57% in January over the same month last year. This is based on the report of RealtyTrac, an online marketer of foreclosure properties. This is a sign that the housing troubles is far from over and will get worse.

The study recorded foreclosure filings — default notices, auction sales notices and bank repossessions. There were 233,001 homes affected including 45,327 homes which were foreclosed by banks last month. The increase is 8 percent from the previous month and an increase of nearly 57 percent from same month last year. Of that total, homes were lost to bank repossessions last month.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

Foreclosure Rates
Posting highest foreclosure rates were the states of Nevada, California and Florida. Nevada still retained the top spot among the 50 states even with the month-over-month drop in foreclosure activity. Foreclosure filings were reported on a total of 6,087 Nevada properties during the month, a 45 percent decrease from the previous month but still a 95 percent increase from January 2007.

On the second spot is California’s January foreclosure rate then Florida’s with the third highest foreclosure rate. Other states with the top 10 highest foreclosure rates ranking were Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan.

Foreclosure Totals
Posting the highest number of foreclosure were the states of California, Florida, Texas. Foreclosure filings recorded in California was 57,158 properties in January, the highest in any state. The state’s foreclosure activity was up 7 percent from the previous month and increased 120 percent from January 2007.

Despite a 3 percent month-over-month decrease in foreclosure activity, Florida’s total of 30,178 properties with at least one foreclosure filing was the nation’s second highest state total. The state’s foreclosure activity was up nearly 158 percent from January 2007.

The nation’s third highest January total was in Texas, where foreclosure filings were reported on 14,698 properties — a nearly 20 percent increase from the previous month, but a slight decrease from January 2007. The state’s monthly foreclosure rate was below the national average and ranked No. 13 among the states.

Ohio, Michigan and Georgia all documented totals of more than 10,000 properties with foreclosure filings reported in January. Other states in the top 10 in terms of total properties with foreclosure filings reported were Arizona, Massachusetts, Illinois and Colorado.

Metro-Foreclosure rates
California and Florida metro areas accounted for eight of the top 10 metro foreclosure rates in January. The Cape Coral-Fort Myers, Fla., metro area documented the highest January foreclosure rate among the 229 metro areas tracked in the report. The other Florida metro area in the top 10 was Port St. Lucie-Fort Pierce, which ranked No. 10.

The Stockton, Calif., metro area documented the second highest metro foreclosure rate. Other California metro areas in the top 10 were Riverside-San Bernardino at No. 3, Modesto at No. 4, Merced at No. 5, Vallejo-Fairfield at No. 7 and Bakersfield at No. 9.

Other cities in the top 10 were Las Vegas at No. 6 and Greeley, Colorado, at No. 8.
 

National home prices dropped 8.9 percent in the last quarter of 2007 as compared to the same period a year ago. This was based on the latest S&P/Case Shiller Home Prices Indices released last Tuesday. The decline was the sharpest since the housing index was started 20 years ago.

The indices include a quarterly index for annual returns of the U.S. National Home Price Index, the 10-City Composite, and the 20-City Composite which shows all three still yielding negative returns.

The 10-city index also set a record annual drop of 9.8 percent in December, while the 20-city index dipped 9.1 percent.

Home prices also plunged 5.4 percent from the previous quarter, by far the largest quarter-to-quarter price weakening in the index’s history. The record was the revised 1.8 percent drop set in the third quarter of the same year.

“We reached a somber year-end for the housing market in 2007,” said one of the index’s creators Robert Shiller. “Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look, things look bleak.”

A report by the Office of Federal Housing Enterprise Oversight last Tuesday said U.S. home prices recorded their first annual decline in 16 years. The said nationwide prices declined 0.3 percent in the fourth quarter compared to the same period a year ago.

“It will only get worse. This record will be shattered by subsequent declines,” said Peter Schiff, author of “Crash Proof: How to Profit from the Coming Economic Collapse” about the S&P/Case-Shiller report. “We will experience the most substantial decline in history because before this we had experienced the most unprecedented rise in U.S. real estate history.”

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.04 percent with an average 0.6 point for the week ending February 21, 2008, up from last week when it averaged 5.72 percent. Last year at this time, the 30-year FRM averaged 6.22 percent.

The 15-year FRM this week averaged 5.64 percent with an average 0.5 point, up from last week when it averaged 5.25 percent. A year ago at this time, the 15-year FRM averaged 5.97 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.37 percent this week, with an average 0.5 point, up from last week when it averaged 5.19 percent. A year ago, the 5-year ARM averaged 5.96 percent.

One-year Treasury-indexed ARMs averaged 4.98 percent this week with an average 0.6 point, down from last week when it was 5.00 percent. At this time last year, the 1-year ARM averaged 5.49 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"After trending up in the past two weeks, long-term fixed mortgage rates are back up to nearly where they were at the beginning of the year. In contrast, average rates on adjustable-rate mortgages are about 0.5 percentage points below levels of the first week of this year," said Frank Nothaft, Freddie Mac vice president and chief economist. "As the spread between long-term fixed-rates and adjustable-rates widens, it's possible we could see a slight increase in the popularity of adjustable-rate mortgages.

"In Wednesday's release of the minutes of the Federal Open Market Committee's most recent meeting, the Federal Reserve reduced its forecast of economic growth for this year to a rate of 1.3 to 2.0 percent, down from the 1.8 to 2.5 percent forecast from last October. The sluggish housing market and tight credit conditions were among the factors contributing to lowered projections. Indeed, although January's housing starts showed an increase from December's level, the gains were from multifamily properties. Single-family construction in January fell to the lowest level since January 1991 and especially weak were single-family housing starts in the West, which experienced the slowest pace of construction since the beginning of the series in 1959."

Source: Freddiemac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com

The US homebuilding sector in 2007 experienced the sharpest decline in 27 years. It is feared that it will continue to decline in 2008 amid uncertainty of on a possible recession. In January, housing starts moved up 0.8% in January to an annualized 1.012 million units. December's level was slightly downwardly revised to 1.004 million units, the Commerce Department reported.

Permits to begin new construction fell for the eighth month in a row to an adjusted annual pace of 1.048 million privately owned units, in line with expectations of 1.040 million.

All of the weakness was concentrated in the historically more stable singles component which dropped 5.2% to an annualized 743,000 units. In contrast, the multiples component rose 22.3% to 269,000. Permits dropped 3% to an annualized 1.048 million units. They were down 7.1% in December. Regionally, weakness was concentrated in the south (down 2.9%) and the west (down 6.2%).

Although starts edged upwards slightly in January, they were still off 12.2% relative to their fourth-quarter average. Furthermore, the drop in building permits in January suggests that starts will decline further this month.

Fed chairman Ben Bernanke told a congressional hearing last week that the forecast would be lower than the forecast released late last year of an average growth range of 1.8 to 2.5 percent for 2008.

Given that homes inventories in the sector remains high, it is expected that downward pressure on residential construction will continue.