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The Federal Reserve cut short-term interest rates by 0.25 percent to 4.50 percent today (October 31, 2007). Wall Street expected the cut. The Fed sighted weakness in the housing market as one reason to lower interest rates.
The weekly survey by the Mortgage Bankers Association revealed that U.S. mortgage applications rose 3.8 percent compared to the previous week, USA Today reported October 31, 2007.
Lower mortgage interest rates are credited with the increase in applications.
Refinance applications rose more than 9 percent while purchase applications rose less than 1 percent.
An index that tracks U.S. home prices showed continued weakness in August, the eighth straight month of price declines, USA Today reported October 30, 2007.
Greater Boston showed a 3.6 percent decline in August compared to August 2006.
The S&P/Case-Shiller index tracks 20 metropolitan areas across the nation, and it is designed to track the prices of typical single-family homes. The index reported a 4.4 percent decline in prices, with 15 or the 20 cities showing prices dropping.
Eight of the 20 metropolitan areas in the Case-Shiller index showed their lowest annual returns ever recorded. The report showed drops in Cleveland of 4.1 percent; Las Vegas, 7.6 percent; Miami, 7.8 percent; Minneapolis, 4 percent; Phoenix, 8 percent; San Diego, 8.3 percent; Tampa, 10.1 percent; and Washington, D.C., 7.2 percent.
Tampa surpassed Detroit as the worst performing city. Detroit had a 9.3% drop over last year.
The Boston Globe has broken down what an annual salary for a Red Sox player can buy on the real estate market today.
Of course, at a salary of more than $17 million, Manny can be Manny just about any where he wants to. At $14.4 million, J.D. Drew isn't exactly slumming, but at $425,000 a year, closer Jonathan Papelbon probably won't be Manny's neighbor anytime soon.
See all the home photos and other players' salaries at Boston.com
The slow real estate market has resulted in fewer Americans owning their own home, the Boston Herald reported October 27, 2007.
The U.S. Census Bureau provided the data, reporting that 68.1 percent of Americans owned their own home in the third quarter, down from 69.3 percent in mid 2004.
"The pullback marks the first time homeownership levels have fallen for five consecutive quarters since the government began tracking such data in 1981."
Of course, a lot of people over the past few years obtained home loans, despite the fact they didn't have the credit history, assets or income to justify it. That's why the mortgage industry is in turmoil right now, and, obviously, fewer people are being approved for loans.
New homes sales in the U.S. increased 4.8 percent in September compared to August; however, sales were down 23.3 percent compared to September 2006, USA Today reported October 25, 2007.
"There were 523,000 new homes for sale at the end of the month, a 1.5% drop from August. It would take 8.3 months to clear that inventory at the current sales pace, down from the 9 months' supply reported in August."
The U.S. Commerce Department provided the data.
The West led the rebound in home sales with a 37.7 percent surge. Sales also were up 0.5 percent in the South, but sales of new homes fell 19.5 percent in the Midwest and 6.6 percent in the Northeast.
The National Association of REALTORS®, through the REALTORS® Relief Foundation, is donating a half-million dollars to help the victims of the disastrous wildfires that have swept California and left thousands of people homeless.
The Boston Globe reported October 25, 2007 that existing home sales across the U.S fell dramatically, posting a record 8 percent decline in September, according to data from the National Association of REALTORS® (NAR).
"The median price fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It was the biggest price drop since last October and marked the 13th time in the past 14 months the year-over-year sales price has decreased."
Many industry experts and economists blame the severe credit
crunch that hit in August when banks and other lenders tightened
standards in the face of soaring home loan defaults for September's dismal home sales data. The market all but
dried up for subprime borrowers, those with weak credit histories, and
people seeking so-called jumbo loans more than $417,000.
Read The Boston Globe Article
Average rates for U.S. 30-year, fixed-rate home loans declined to 6.33 percent, down from 6.40 percent the previous week, MarketWatch reported October 25, 2007.
The same mortgage stood at 6.40 percent during the same period last year.
The 15-year, fixed-rate mortgage averaged 5.99 percent, down from 6.08 percent. The mortgage averaged 6.10 percent a year ago.
The Wall Street Journal has put together a state-by-state mortgage delinquency map. Florida, Texas and Nevada lead the way. Massachusetts and New Hampshire appear to be about average.
I am a Massachusetts lawyer and real estate broker and co-founder/owner of Buyers Brokers Only, LLC. I am also a partner in the law firm of Rosa & Kres, LLP.
If you have a question for me about any aspect of the home-buying process (i.e., house hunting, mortgages, negotiations, buyer agency, purchase and sale, etc.), please don't hesitate to send me an email. I'm happy to try to answer your question.
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