The Norris Group Blog

Today’s News Synopsis:

According to RealtyTrac, the total number of national foreclosures decreased by 9 percent in March. Economists Lawrence Yun and Mark Zandi predict that mortgage rates will remain historically low over the next few years. CAR reports the minimum household income needed to purchase an entry-level home at $246,270 in California in the first quarter of 2010 was $41,540. Statistics from Freddie Mac show the average rate on a 30-year fixed rate mortgage dipped to 4.93 percent.

In The News:

The Atlantic – “Foreclosures Declined 9% in April” (5-13-10)

“Fewer Americans lost their homes in April, though the numbers are still alarmingly high at 333,837 foreclosed properties nationwide, according to foreclosure data specialist RealtyTrac. This number was 9% lower than the record high hit in March. So April’s decline, while relatively good news, doesn’t quite get foreclosures back down to pre-March levels.”

NAR - “Two Economists Project Improving Housing Market but Timing Uncertain” (5-13-10)

“Both Lawrence Yun, NAR chief economist, and Mark Zandi, chief economist and co-founder of Moody’s Economy.com, agreed that job creation is key to an economic and housing recovery, with job creation expected as the year progresses, but they differed somewhat on the impact that foreclosures will have on home price stabilization. Both project that mortgage interest rates will remain historically low, the availability of jumbo loans will improve and home sales will rise over the next few years.”

CBIA - “California New-Home Sales Rise From February, CBIA Announces” (5-13-10)

“The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 13 percent above February, but fell 31 percent below March 2009. During March, 2,189 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,938 in February and 3,192 in March 2009. Sales of single-family homes were up by 5 percent from the previous month, but down 36 percent from the same month a year ago. Sales of townhomes and ‘plexes’ – duplexes, triplexes, etc. – rose 24 percent from February but were off by 32 percent from March 2009, while sales of condominiums were up 37 percent from the previous month, but were 16 percent lower than a year ago.”

CAR - “Entry-level housing affordability stood at 66 percent in Q1 2010″ (5-13-10)

“The minimum household income needed to purchase an entry-level home at $246,270 in California in the first quarter of 2010 was $41,540, based on an adjustable effective interest rate of 4.33 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,380 for the fourth quarter of 2010. At $41,540, the minimum qualifying income was $3,910 greater than a year earlier when households needed $37,630 to qualify for a loan on an entry-level home.”

Sign On San Diego – “Mortgage rates drop to lowest level this year” (5-13-10)

“Mortgage rates fell this week to the lowest level of the year, as rates fell on U.S. government securities. Fixed mortgage rates closely track interest rates paid on long-term Treasury bonds. The average rate on a 30-year fixed rate mortgage dipped to 4.93 percent this week from 5 percent a week earlier, Freddie Mac said Thursday. It was the lowest level since mid-December, when rates averaged 4.81 percent.”

Housing Wire – “RealtyTrac’s Daren Blomquist Calls for Shadow Inventory Clearance” (5-13-10)

“I think the year-over-year decrease in national foreclosure activity in April is a definite sign that there is an end in sight, but on the other hand the record REO numbers show that we’ve got a lot of backlogged inventory stopped up in the foreclosure process that needs to be cleared before we can return to a balanced, healthy market.”

Housing Wire – “Dodd Bill Amendment Will Assign Credit-Rating Agencies to Deals” (5-13-10)

“The US Senate today approved in a 64-35 vote an amendment by Sen. Al Franken (D-MN) on credit ratings to be added to S 3217, the Restoring American Financial Stability Act sponsored by Sen. Chris Dodd (D-CT). The amendment would instruct the Securities and Exchange Commission (SEC) to establish a self-regulatory organization to assign credit-rating agencies (CRAs) to provide initial credit ratings on financial products. It essentially creates a board to assign CRAs to securities, to prevent firms from ’shopping around’ for the highest ratings.”

Orange County Register – “O.C. construction recovery 6 years away” (5-13-10)

“Orange County won’t get back to pre-recession levels of employment in the construction business until 2016, according the Cal State Long Beach’s 2010 forecast released today. Construction employment hit 107,175 at the peak in 2006. The forecast projects employment in the sector will drop to 66,691 this year before bottoming at 65,312 in 2011.”

Looking Back:

One year ago, the national share of home sales above $750,000 fell from 4.4 percent in 2007 to approximately 2.3 percent in 2009. The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April 2009. General Growth Properties received approval for a $400 billion dollar loan to aid their recovery from bankruptcy. Fitch Ratings predicted that home prices would by 36 percent within 18 months of May 2009.