Mortgage Rates Increase Almost .5% The Past 7 Days
If you have waited to refinance your loan, you may have waited too long. . .
Rates for conforming 30-year fixed loans jumped from an average 5.03% last Tuesday to 5.44% on Thursday before slipping to 5.30% Friday, according to HSH Associates of Pompton Plains, N.J.
The bond market, which ultimately determines what happens to interest rates, tends to drive them down when the economic outlook is bad. Signs that the economy may no longer be getting worse contributed to the shift away from the rates under 5% seen in recent months, Gumbinger said.
Other reasons for the move include bond investors’ demands for higher rates because of worries that inflation may return sooner than anticipated and a flood of new sovereign debt being issued.
Bankrate.com senior analyst Greg McBride said federal government borrowing to fund its huge deficit spending is driving up borrowing costs for everyone,
But heavy Federal Reserve purchases of Treasury bonds and mortgage-backed securities should in the short term keep the cost of home loans at what historically are extraordinarily low levels, he said.
“They may not necessarily be able to bring rates to sub-5%,” McBride said, “but they can keep a lid on mortgage rates.”
The upward tick is expected to slow refinancings more than home purchases, because, as Gumbinger put it, “The interest rate is just one of a number of planets which must align” for a home to get sold.
Still, the higher rates, if sustained, could put some additional downward pressure on home prices, since interest rates do affect affordability.
(*Sources: LA Times, Wall Street Journal)
By John SkinnerGraph outlines sales activity on high end since 1988
Manhattan Beach school district cuts athletic funding
Because of cost cutting in the Manhattan Beach Unified School District, Athletic Director Bob Fish has been reassigned to teach full time, leaving Paula Spence, Vice Principal to coordinate Mira Costa High School’s 64 teams and 1,200 athletes.
The reassignment of athletic director duties is only one of sweeping changes approved by the district’s board of trustees, who voted to eliminate all of the school’s coaching stipends and its athletic trainer beginning next school year.
To pay for the $180,000 in coaching stipends and more than $60,000 for a trainer, plus other costs, the school’s booster clubs have joined forces with the Manhattan Beach Athletic Foundation to ask parents for a donation of $325 per athlete for the first sport he or she participates in and $200 for each additional sport.
*Source: LA Times: For the full article plus more information on budget cuts regarding athletic programs across the region, please read: Budget cuts affecting athletic department funding
Beverly Hills and Santa Monica Schools look to Alumni
If you grew up in Santa Monica or Beverly Hills and attended publich schools for at least four years, your child could attend schools in these high acheiving districts even if you live outside the boundaries.
The Beverly Hills Unified School District and the Santa Monica-Malibu Unified School District have adopted legacy admissions policies for children of former students who live outside their enrollment boundaries. The policies appear to be the first in the nation at public schools.
The programs vary slightly, but leaders of both districts say they hope to raise money by forging closer ties with alumni who may be priced out of their hometowns as well as with grandparents who still live there. In each district, nonresident legacy students will make up a tiny percentage of the student population, officials said.
Beverly Hills adopted its legacy policy on a 3-2 vote last spring, allowing the children of anyone who attended city schools at least four years and whose grandparents have lived in the city for at least a decade to apply for permits. Eleven students, among 5,100 enrolled in district schools, attend school under the program.
Fenton said he proposed the idea to reconnect the district with grandparents who live within its borders and no longer have a direct stake in the city’s schools yet are asked to vote on school measures, such as a $334-million facilities bond passed in November. Fenton also said the district needed to forge closer ties with its alumni.
To round out classes and maximize state funding, the 12,000-student Santa Monica-Malibu district has long offered permits to the children of district, city and community college employees, siblings of current students and others who moved away. After those, it also has given permits to some nonresident students without connections to the district.But the board voted unanimously in April to give alumni children priority over this last category of students, starting next school year.
“If we’re going to be giving out additional permits to students who live outside the community, the board felt we wanted to give them to people who had a tangible connection to our community,” said board member Ben Allen.
He also said the policy was a response to soaring housing prices that have hurt diversity in the district and priced out younger families. Bill Koski, a Stanford University law professor who specializes in education policy, said the preferences could widen the gap between affluent and poor districts. “The adequacy of education funding in California is problematic when even our wealthiest school districts feel they must resort to this type of thing,” Koski said.
Source: LA Times; Full Article: http://www.latimes.com/news/local/la-me-legacy16-2009may16,0,474770.story
Plan to widen Sunset Boulevard in Brentwood is halted
Los Angeles city traffic officials have abruptly dropped a plan to widen congested Sunset Boulevard in Brentwood after the proposal generated widespread community outcry.
The controversy underscores the challenges traffic planners face in attempting to improve traffic flow — even in notoriously clogged areas such as the Westside. City officials say this stretch of Sunset is one of the most congested in the region.
The Los Angeles Department of Transportation last month proposed adding one eastbound lane on Sunset, from Barrington Avenue to Gunston Drive, about a 0.4-mile stretch. Officials had asked the Los Angeles County Metropolitan Transportation Authority to fund about $4 million of the project’s estimated $6.1-million price tag. Hundreds of residents questioned whether adding a lane would effectively ease traffic congestion. They also said the proposal was not properly vetted, and that widening Sunset violated existing community plans to preserve the scenic highway.
This is at least the second time in recent years that L.A. has tried to widen this stretch of Sunset.
The Brentwood homeowners association, along with the Bel-Air Assn., in 2004 commissioned traffic consulting firm Linscott Law and Greenspan to conduct a study of congestion on Sunset Boulevard.
One of the study’s conclusions was that an additional eastbound lane on the road could ease gridlock. The proposed lane would decrease delay time by an estimated 39% in the morning and 50% in the evening in the 0.4-mile zone.
The time estimates were based on pending changes to the 405 Freeway, including a reconfigured Sunset Boulevard overpass and on and off ramps. Construction for the Sunset project would have begun after the 405 Freeway changes were complete.
*Source: LA Times: Full Article: http://www.latimes.com/news/local/la-me-sunset22-2009may22,0,6939868.story
Are signs of a So Cal bottom misleading?
UBS Investment research recently met with Bruce Norris, founder of The Norris Group & an expert on So Cal housing.
On May 27th, they reported the key takeaways: 1) recent signs of stability in this market were likely premature; 2) driven by the expiration of the foreclosure moratorium in April ‘09, they expect foreclosures this year to exceed ‘08 levels; & 3) efforts taken by the Fed gov’t to encourage loan modifications aren’t working in CA, as homeowners are too far underwater to make this viable. Accordingly, they expect prices to decline further through the remainder of the year.
So Cal real estate notes to ponder
– The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle’s peak in July 2007.
– Southern California’s median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported.The price drop — a decline of 51% from the 2007 peak — came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick.
– First American CoreLogic, which has a vast store of data on actual mortgages, reports that Los Angeles County mortgages delinquent by 90 days or more in March were up to 8.9% of the total — more than double the percentage of March last year.
Foreclosure filings, the next step in the foreclosure process, were issued on 2.3% of L.A. County mortgages in March, up from 1.9% in March 2008.
Repossessions, the final step in foreclosure, which results in a property being taken by the lender, were done on 1.6% of L.A. County mortgages in March, up from 1.2% in March 2008.
New rules are raising appraisal costs yet the quality gets worse
The rules, intended to improve the accuracy of home valuations, push most large lenders to use third-party appraisal management companies.
How about this scenario the next time you refinance or apply for a mortgage: The real estate appraisal that used to cost you $325 now costs $450, even though the appraiser doing the work is getting only $175 or $200.Plus, your appraisal-related charges may now be subject to add-on fees that you’d never heard of before — $50 to $100 extra in “no show” penalties if you get stuck in traffic and miss your appointment with the appraiser. Or an extra $50 to $150 tacked on if the property is worth more than $500,000.
Worse yet, the person conducting your appraisal may be new to the field — willing to work for a cut-rate fee — and may not be as familiar with local value trends and pricing adjustments as an appraiser with more experience.
**I have received three calls from fellow real estate agents in the past month regarding recent sales I was involved in asking for additional info to provide the bank because the appraisal was botched by somebody who was not familiar with the area. This helps create multiple appraisals and broker-price opinions.
The rules, which go by the name Home Valuation Code of Conduct, are intended to improve the accuracy of appraisals by eliminating pressure on appraisers from loan officers. The code pushes most large lenders to use third-party “appraisal management companies” that contract with networks of independent appraisers around the country who have no direct contact with retail loan officers or mortgage brokers.
Mortgage brokers, who formerly chose appraisers and kept a competitive eye on appraisal fees, say Fannie’s and Freddie’s rules are adding 20% to 30% to consumers’ appraisal costs.
Jeffrey T. Hawk, vice president of Maryland Mutual Mortgage in Forest Hill, Md., says a standard appraisal that previously went for $325 jumped to $400 or more May 1 when he was forced to use management company appraisers.
(Source LA Times: Full Article: http://www.latimes.com/classified/realestate/news/la-fi-harney17-2009may17,0,5903005.story
Regular Postings are back!
After making some administrative upgrades and getting some new systems in place to improve client satisfaction, the Skinny on Real Estate is back and will be consistently updated at least two times a week with pertinent news impacting the Westside/South Bay Southern California real estate market. The Skinny on Real Estate E-Newsletter will also go out every two to three weeks. We hope you find the information we provide to be very informative and that you will think of us whenever you require assistance with your real estate needs.
-Skinner Estates
Mortgage rates still below 5%
Freddie Mac’s weekly survey of home loans show that rates remain under 5%, and have fallen slightly from the previous week.
The typical interest rate on a 30-year fixed mortgage was 4.82% for the week, down from 4.87% last week. Points and fees charged by lenders dropped from an average 0.7% of the loan amount to 0.6%, Freddie Mac said.
Driven down by aggressive actions at the Federal Reserve and Treasury Department, the rates dipped below 5% last month and bottomed out at 4.78% during the week that ended April 2. Last year at this time, a 30-year fixed rate loan averaged 5.88%, according to Freddie Mac.
Rates on 15-year fixed loans this week averaged 4.48% with 0.6% in average lender charges.
The survey looks at borrowers who can qualify for the loans that Freddie Mac will buy or guarantee. Obviously, jumbo loans above $729,750 are not included in this survey.
(*Source: LA Times)
