According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell to 4.32 percent after rising to 4.39 percent the week before. At 4.32 percent, mortgage rates are now back to their lowest level of the year. Despite the rate drop, the Market Composite Index, which measures total mortgage loan application volume, decreased 9.6 percent due to slowing refinance activity following a recent surge. The Purchase Index, however, increased 0.9 percent. Michael Fratantoni, MBA’s vice president of research and economics, said refinance activity declined despite mortgage rates near a 10-month low. More here and here.
In the second quarter of 2011, national home prices rose 3.6 percent. According to the Standard & Poor’s /Case-Shiller home price index, prices were up in June from May in 19 of the 20 cities tracked. David M. Blitzer, chairman of the index committee at S&P Indices, said none of the analyzed cities made new lows in June and the majority of cities are seeing improved annual rates, though prices were down year-over-year. The largest monthly increases were found in Chicago, Minneapolis, Washington, and Boston. Twelve of the 20 metro areas have increased for three consecutive months. More here and here.
The National Association of Realtors’ Pending Home Sales Index, which measures contract signings but not closings, is 14.4 percent above July 2010 despite falling 1.3 percent from June. Lawrence Yun, NAR’s chief economist, said contract activity has been fairly comparable to the first three months of the year and well above April’s low. According to Yun, the underlying factors for improving sales, such as rising rent and high affordability conditions, are developing. Pending sales of existing homes are well above year-ago levels in all regions and are up 20.6 percent in the West and 18.8 percent in the Midwest. More here.
According to RealtyTrac’s Q2 2011 U.S. Foreclosure Sales Report, sales of homes in some stage of foreclosure or bank ownership accounted for 31 percent of all residential sales during the second quarter, which is down from 36 percent in the first quarter. James Saccacio, chief executive officer of RealtyTrac, said the report was good news for well-positioned buyers and investors, as well as distressed homeowners looking to sell and lenders saddled with large portfolios of delinquent loans. A 19 percent surge in pre-foreclosure sales indicates the housing market is starting to focus on clearing distressed inventory more efficiently, according to Saccacio. More here and here.
Based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities. Trulia’s Summer 2011 Rent vs. Buy Index compared price-to-rent ratios for the 50 largest cities using the median list price compared to the median rent as of July 1. Renting was cheaper than buying in only 12 of the 50 analyzed cities. Ken Shuman, head of communications at Trulia, said buyers should ask themselves if they plan to live in the home for at least seven years, could make monthly payments, and have enough for a down payment and six-to-eight months worth of mortgage payments. According to Schuman, the cost of buying a home definitely outweighs renting in most cities for prospective buyers that can answer yes to each of those questions. More here.