Annual home-price growth seen in 31 states First American releases numbers from November Friday, January 25, 2008Inman News The housing slowdown hadn't produced annual price declines in 31 states as of last November, according to the latest home-price index from First American CoreLogic. States like California, Florida, Nevada and Arizona -- where prices shot up during the housing boom -- and 15 other states saw prices slide from November 2006 levels. But prices were up in a majority of states -- at least when looking back at the previous 12 months. First American CoreLogic's LoanPerformance Home Price Index (HPI) includes data on repeat sales through mid-December. But the company did not make those statistics available in a press release, or provide quarterly data that would indicate more recent trends. According to a government index that excludes transactions involving homes with mortgages above the $417,000 conforming loan limit, home prices fell in 21 states during the third quarter, leading to the first quarterly decline in average U.S. home prices in 13 years (see Inman News story.) That report, from the Office of Federal Housing Enterprise Oversight (OFHEO), showed year-over-year price declines in an increasing number of markets during the third quarter -- 89, compared with 67 in the second quarter, according to an analysis by PMI Mortgage Insurance Co. PMI's analysis concluded that the odds of price declines during the next two years increased in all but 11 of the nation's 50 largest housing markets. LoanPerformance HPI* Statistical area 12-month change Nov. 2007 Honolulu, Hawaii 17.10% Salt Lake City, Utah 10.53% San Antonio, Texas 7.48% Austin-Round Rock, Texas 7.47% Raleigh-Cary, N.C. 4.62% Houston-Sugar Land-Baytown, Texas 4.16% Dallas-Fort Worth-Arlington, Texas 3.53% Charlotte-Gastonia-Concord, N.C.-S.C. 2.62% Portland-Vancouver-Beaverton, Ore.-Wash. 2.01% Seattle-Tacoma-Bellevue, Wash. 1.23% New York-White Plains-Wayne, N.Y.-N.J. -0.51% Detroit-Warren-Livonia, Mich. -0.79% Philadelphia, Pa. -1.00% Chicago-Naperville-Joliet, Ill.-Ind.-Wis. -1.63% San Francisco-San Mateo-Redwood City, Calif. -2.06% Atlanta-Sandy Springs-Marietta, Ga. -2.59% New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. -3.30% Denver-Aurora, Colo. -3.30% Minneapolis-St. Paul-Bloomington, Minn.-Wis. -3.93% St. Louis, Mo.-Ill. -4.54% Boston-Quincy, Mass. -5.11% Miami-Miami Beach-Kendall, Fla. -7.23% Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. -7.77% Cleveland-Elyria-Mentor, Ohio -8.72% Tampa-St. Petersburg-Clearwater, Fla. -9.19% Phoenix-Mesa-Scottsdale, Ariz. -11.42% Orlando-Kissimmee, Fla. -11.49% Miami-Fort Lauderdale-Miami Beach, Fla. -12.11% Oakland-Fremont-Hayward, Calif. -12.89% Las Vegas-Paradise, Nev. -12.96% Los Angeles-Long Beach-Santa Ana, Calif. -13.16% San Diego-Carlsbad-San Marcos, Calif. -13.16% Riverside-San Bernardino-Ontario, Calif. -16.82%

Fed slashes target rate to 3.5% Surprise move aims to stave off recession Tuesday, January 22, 2008Inman News The Federal Open Market Committee today lowered its target for the federal funds rate 75 basis points to 3.5 percent -- the steepest cut since 1984 -- in an attempt to prevent a market meltdown and recession. The Fed took this action between its regularly scheduled monetary policy meetings. It's the first time it has cut rates between such meetings since just after the Sept. 11, 2001, terrorist attacks. The federal funds rate is the rate banks charge each other for overnight loans, and it impacts how much consumers pay on credit card debt, auto loans and home equity lines of credit. According to the Fed's statement, "while strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets." The Committee said it expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully, as "appreciable downside risks to growth remain." Analysts expect the Fed to cut the federal funds rate again at its regularly scheduled meeting Jan. 30-31 by another 50 basis points, to 3 percent. In a related action, the Board of Governors approved a 75-basis-point decrease in the discount rate to 4 percent. The discount rate is what the Federal Reserve charges banks for short-term loans.

Real estate rates dip overnight 30-year fixed rate at 5.52%; 10-year Treasury yield at 3.79%Monday, January 14, 2008Inman News Long-term mortgage interest rates headed lower Friday, and the benchmark 10-year Treasury bond yield dropped to 3.79 percent. The 30-year fixed-rate average sank to 5.52 percent, and the 15-year fixed rate slipped to 5.03 percent. The 1-year adjustable rate was down at 5.34 percent. The 30-year Treasury bond yield fell to 4.38 percent. Rates and bonds are current as of 7:15 p.m. Eastern Standard Time. Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5. In other economic news, the Dow Jones Industrial Average tumbled 246.79 points, or 1.92 percent, finishing at 12,606.3. The Nasdaq lost 48.58 points, or 1.95 percent, closing at 2,439.94. Stock figures are current as of 7:30 p.m. Eastern Standard Time.

Pending home sales sink in November

Pending home sales sink in November NAR: Timing of housing recovery still 'uncertain' Tuesday, January 08, 2008Inman News The National Association of Realtors today reported that its forward-looking indicator of existing-home sales fell in November, adding that the "exact timing and the strength of a home sales recovery is a bit uncertain." NAR's Pending Home Sales Index, based on sales contracts signed in November, dropped 2.6 percent from October's level and was down 19.2 percent from a year ago. Lawrence Yun, NAR's chief economist, said there is a pull and tug exerting itself on the market. "On the one hand, we have a pent-up demand from the 4 million jobs added to our economy over the past two years of sales decline," he said. "On the other, consumers continue to wait for additional signs of market stabilization. … A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008." The index in the South rose 2.3 percent in November but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent and is 18.6 percent below a year ago. In the Northeast, the index dropped 13 percent and is 19.1 percent below November 2006. NAR forecasted existing-home sales for 2007 to total 5.66 million, the fifth highest on record, then edge up to 5.7 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400. New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006, according to NAR. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009. "Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented," Yun said. NAR strongly supports raising the government-sponsored enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. "NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners," he said. NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. "Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay," Yun said. According to NAR, the 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates. Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2 percent this year, NAR reported. After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008, NAR said. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.