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Another week, another new low for the long term mortgage markets.

For the 11^th consecutive week Freddie Mac's Primary Mortgage Market Survey showed that the average interest rate for the 30-year fixed-rate mortgage (FRM) broke another record in the 37-year history of the survey. During the week ended January 15 the rate averaged 4.96 percent with 0.7 point, down from last week's average of 5.01 percent with 0.6 point.

The 15-year FRM was up three basis points from the week ended January 8, averaging 4.65 percent. Fees and points averaged 0.7 point both weeks.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) dropped nearly a quarter of a point, from 5.49 percent with 0.7 point to 5.25 percent and 0.6 point. This is the lowest rate for the 5-year hybrid since September 8, 2005 although Freddie Mac has only tracked this mortgage since January 1 of that year.

One-year Treasury-indexed ARMs averaged 4.89 percent with 0.5 point. Last week the average was 4.95 also with 0.5 point.

"Interest rates for 30-year fixed rate mortgages fell for the 11^th straight week to another record low, due in part to the slowing economy and government actions," said Frank Nothaft, Freddie Mac vice president and chief economist. "So far, both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages. The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008 announcement, to further shore up mortgage lending and keep rates low.

"In December, the unemployment rate rose to 7.2 percent, the highest since January 1993, and the economy lost 2.6 million jobs over 2008, the largest annual drop since 1945. That brought down yields on Treasury securities and mortgage rates followed."

Earlier in the week Fannie Mae reported on its posted yields for the week ended January 9. Servicing fees are not included in these quotes.

The 30-year FRM averaged 4.19 percent compared to 4.49 a week earlier. The 15-year FRM had an average yield of 4.01 compared to 4.14 the week before and the 30 year government guaranteed FHA/VA loans were are 4.96, down from 5.520. The one-year ARM was up from 4.42 to 4.52.

RISMEDIA, January 15, 2009-(MCT/RISMedia)-A week before taking office, President-elect Barack Obama worked Tuesday to ensure that he’ll have more than a trillion dollars at his disposal within weeks to shore up the still-sinking economy. He appeared on track to win a quick $350 billion down payment from Congress, with more to come later. Also Tuesday in other economic efforts, National Association of Realtors President Charles McMillan addressed the House Financial Services Committee, saying that in order to move the country out of this economic crisis, Congress and the next administration must place significant emphasis on restoring confidence in the housing market.

“The housing sector is at the core of the current economic crisis,” McMillan said. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”

Obama, with top aides in tow, worked at what one aide called a continuing high-stakes effort to assure rapid congressional support for an unprecedented outpouring of money to reverse the country’s downward economic spiral.

First, he’s trying to convince Congress to let him have the second half of the $700 billion Wall Street bailout package created last fall. Senate Democrats signaled afterward that, while they still have questions about how he’ll spend the money, they will give their OK this week so he can start tapping into the money within days of becoming president.

Second, he’s still working to convince lawmakers to approve a stimulus package that would allow him to spend upward of $800 billion over two years to create more than 3 million jobs, many of them in construction and manufacturing.

Democrats were hopeful that they could pass a bipartisan bill by mid-February, but they said that questions remained and the bill was still being negotiated. They said that Obama was willing to bargain, apparently ready to drop a proposed $3,000-per-job tax credit to businesses for jobs created or saved, for example, and to expand an energy tax credit.

“Did he close the deal? Well, he did a lot of closing today,” said Sen. Debbie Stabenow, D-Mich. “There’s no better closer.”

The more pressing issue was Obama’s urgent request, formally made by President George W. Bush on his behalf, for the remaining $350 billion in the Troubled Asset Relief Program.

Obama told Democrats that he will use the money differently from how Bush and Treasury Secretary Henry Paulson used the first half, a critically important offer to win over members of Congress who don’t think the first $350 billion was well spent or monitored.

Most notably, Obama said he’d focus more on helping homeowners avoid foreclosures, work more to help people get student loans and car loans, and make sure that the taxpayers’ money didn’t go to high salaries or bonuses for Wall Street executives.

Meanwhile, during McMillan’s testimony, he congratulated Chairman Barney Frank, D-Mass., on H.R. 384, the TARP Reform and Accountability Act, which was introduced last week. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current homeowners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available.

The principle focus of NAR’s plan is to ensure that the Troubled Asset Relief Program does what it was originally intended to do - end the credit crisis and jumpstart mortgage lending. “It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” said McMillan. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry.”

“We are pleased that Congress is moving forward on these important issues. Together these actions will build a solid foundation for a housing recovery,” said McMillan.

NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.

“Low interest rates are only effective if people can get a loan. We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system,” said McMillan.

NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that are preventing consumers from getting or modifying home loans. “These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.

NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.

On Tuesday, the No. 2 official at the Federal Reserve also told Congress that it’s essential that Congress allow the second $350 billion to be spent. Federal Reserve Vice Chairman Donald Kohn also endorsed Obama’s idea of using some of the money to ward off more home foreclosures.

“Preventable foreclosures harm not only the affected borrowers and their communities but also, through their effects on the housing market, the broader economy and the financial system as well,” Kohn told the House Financial Services Committee.

While most Democrats at the lunch meeting welcomed the push against foreclosures and other changes, they told Obama that they want to see more details.

Obama, said Sen. Ben Nelson, D-Neb., “wants us to trust and verify, but I’m not sure yet what we’re supposed to verify.”

Republicans had similar thoughts: “Too general,” said Sen. John Cornyn, R-Texas.

“The American people have a lot of questions about how additional funds would be used,” said Sen. Mitch McConnell, R-Ky., his party’s leader in the Senate.

“The current administration used these funds for the auto industry, a move that I opposed,” he said. “Now congressional Democrats are urging more of the same. The American people still don’t have assurances that this money will not be wasted or misused to play favorites. So far, the incoming administration has not said whether it plans to limit funds to their original purpose or to expand their use to help specific industries.”

Obama spoke with McConnell on Monday, seeking broad bipartisan support even though he doesn’t need it. He planned to meet with other Senate Republicans later.

“We’ll be happy to listen,” McConnell said. “They’ll have a receptive albeit cautious audience.”

Ultimately, Obama doesn’t need much to get the money. Congress gave itself the power to block the second installment, but that would take majority votes in the House of Representatives and the Senate, both of which Democrats control.

© 2009, McClatchy-Tribune Information Services.

On Monday, January 5, the Commerce Department reported total construction spending fell 0.6% in the month of November. Economists had anticipated a much steeper drop of 1.3%. The primary cause for the drop was residential construction spending, which fell in November by 4.2% to a seasonally adjusted annual rate of $328.3 billion. Residential construction spending is down 23.4% from a year ago.

On Tuesday, the National Association of Realtors said pending sales for existing homes in November fell to the lowest level in the eight-year history of its index. The trade group said its seasonally adjusted index fell 4% to 82.3 in November from a revised 85.7 in October. Economists expected a reading of 88.

The Commerce Department reported factory orders declined by 4.6% in November, nearly double the 2.5% drop economists expected. Orders have been falling since August, with a 6% drop in October, the biggest decline in eight years. The report showed that demand for durable goods, items expected to last three or more years, fell a modest 1.5% in November. Durable goods dropped 8.5% in October. Demand for nondurable goods, items such as food, paper and petroleum products, dropped by 7.4% in November following a 3.8% decline in October.

The Labor Department said on Thursday the number of people continuing to claim jobless benefits rose by 101,000 to 4.61 million, above the 4.5 million economists expected.

On Friday, the Labor Department reported that the nation’s unemployment rate increased to 7.2% in December from 6.8% in November as businesses cut 524,000 jobs. Employers are also cutting workers’ hours. The average work week in December fell to 33.3 hours, the lowest level on record dating back to 1964.

In other news, the New York-based real estate data company Radar Logic Inc. reported that motivated sales, which include foreclosure auctions and banks selling homes taken over for non-payment, in the 25 largest U.S. metropolitan areas increased 193% between January 2008 to October 2008.

Upcoming on the economic calendar are reports on retail sales on January 14 and consumer inflation on January 16.

NEW YORK -- Spending on remodeling is expected to reach $316 billion this year alone and the number is still climbing, according to the Home Improvement Research Institute. So make sure you know exactly how big a renovation you can afford and whether it justifies the time you intend to spend in your revamped home.

The Nest, a home-improvement Web site, says before making any big changes to your home you should ask yourself these big questions:

1. How long do I plan to stay in my house after the renovations? The longer you plan to live there, the more creative you can be. But if you're planning on selling the house in the next five years, keep potential buyers in mind with your choices. In the latter case, for instance, go with neutral colors in the kitchen and bathroom, and consider maple cabinets. Some people hate oak, others hate cherry, but the majority can live with maple.
   
   
2. Am I doing just cosmetic fixes or am I ready for an all-out overhaul? It's OK to make small changes one at a time, but think long-term about the next step. For example, if you're buying a new sink, buy one with enough holes on the deck for the faucet, sprayer and soap dispenser you might want to add on later. (Cutting more holes into stainless steel or porcelain after the sink is installed is an onerous job you don't want to get stuck with.) And if you know you're going to buy new cabinets later, don't replace the countertop with expensive granite now. The chances of reusing it are very slim -- either it breaks when you try to remove it, or it doesn't match the footprint of the new cabinets.
   
   
3. Am I prepared for the home upheaval? Be realistic about how long these changes might take. Renovations can go on for months, so you need to be prepared to make do without that bathroom, kitchen or bedroom. When checking references before you hire your contractor, be sure to ask if the company finished the work on time. You'd be surprised how quickly a week can turn into a month. And if you're bunking up with your in-laws during renovation, that month can seem like a year.
   
   
4. Are the renovations keeping with the style of my home? Any big changes you make to a home inside should reflect what future buyers will expect from the outside. If you live in a Victorian house, don't make it too contemporary. People who see a historical exterior will expect a historical interior, so stay true to the details. The same goes for a contemporary or modern home, where future buyers may not expect old-fashioned details like antique crown molding.
   
   
5. Are my DIY choices reasonable? You may consider yourself handy, but many do-it-yourself jobs demand your time more than anything else. If you have a full-time job, are you capable of taking on a second one? Some makeovers that are not technically difficult can take longer than you think. For that reason, if you start any job yourself, try to sample it before committing to the whole thing. For example, while refinishing cabinets with a new stain isn't rocket science, sanding down each one can take forever.

A final tip: if you do plan to follow through with a large-scale renovation, do the smallest room in the house from start to finish -- the insulating, rewiring, painting, refinishing, tiling -- so you gain a sense of accomplishment.

Sales of single family homes in the West Palm Beach – Boca Raton area remained almost constant in November 2008, comparing to November of 2007. In 2008, there were 450 homes sold, compared to November of 2007, when 459 homes were sold. This is a drop of 2%.

On the other hand, median sale price plunged 28%; from an average of $345,700 in Nov of 2007 to $247,400 for Nov of 2008

RISMEDIA, January 8, 2009-Thirty-year mortgage rates increased slightly last week for the second consecutive week. The weekly average rates for 30-year fixed mortgages increased to 5.10%, up from 5.07% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Meanwhile, rates for 15-year fixed mortgages decreased to 4.79%, down from 4.86% and 5-1 adjustable rate mortgages increased slightly to 5.62% from 5.56%.

Mortgage Type Average Rate Average Rate % Change
Week ending 1/4/09 Week ending 12/22/08
30-year fixed 5.10% 5.07% 0.6%
15-year fixed 4.79% 4.86% -1.4%
5-1 ARM 5.62% 5.56% 1.1%

Rates for 30-year fixed mortgages edged just below 5.00% again on Monday evening, with the average rate on Zillow Mortgage Marketplace at 4.98%.

At a state level, the 30-year fixed mortgage rate in North Carolina had the biggest increase, rising from 4.99% to 5.09%. Rates on 30-year fixed mortgages were lowest in the states of Arizona (4.97%) and Georgia (4.99%), while Maryland (5.26%) and Virginia (5.24%) had the highest rates.

State Average 30-yr. Average 30-yr.
Fixed Rate Fixed Rate
Week ending 1/4/08 Week ending 12/28/08 % Change
Arizona 4.97% 4.95% 0.5%
California 5.10% 5.11% -0.2%
Colorado 5.16% 5.10% 1.1%
Connecticut 5.06% 5.02% 0.9%
Florida 5.02% 4.97% 1.0%
Georgia 4.99% 4.92% 1.5%
Illinois 5.20% 5.28% -1.7%
Maryland 5.26% 5.16% 1.8%
Massachusetts 5.13% 5.10% 0.5%
Michigan 5.16% 5.12% 0.8%
Minnesota 5.16% 5.06% 1.9%
Missouri 5.14% 5.07% 1.4%
New Jersey 5.07% 5.01% 1.2%
New York 5.14% 5.15% -0.1%
North Carolina 5.09% 4.99% 2.0%
Oregon 5.03% 4.98% 1.1%
Pennsylvania 5.02% 5.01% 0.2%
Texas 5.06% 5.04% 0.4%
Virginia 5.24% 5.18% 0.7%
Washington 5.05% 4.99% 1.3%