How record low interest rates affect SF and Marin

Cheap mortgages have helped drive a modest recovery in the weak housing market this year.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan dropped to 3.66% from 3.71% last week. It's the lowest rate since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.95%. That's down from 2.98% last week and just above the record 2.94% of two weeks ago.

The rate on the 30-year loan has been below 4 % since December.

National Mortgage Rates

National overnight averages Today +/- 30 yr fixed mtg 3.62% 15 yr fixed mtg 2.97% 5/1 ARM 2.68% $30K home equity loan 5.73% $30K HELOC 4.61% About these rates

In San Francisco the rental market is just nuts!  Some lucky buyers have benefitted from recent IPOs and there is plenty of money chasing a very limited housing market in San Francisco and Marin.  We are starting to see some serious bidding wars on good homes for sale.  If you've been considering selling you should give me a call.  If you plan to stay let's check and see that you have the best mortgage and that you can accomplish all your housing goals.

Low rates could provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less on their loans and have more money to spend.

Still, the pace of home sales remains well below healthy levels. Sales of previously occupied homes dipped in May to a seasonally adjusted annual rate of 4.55 million, although they are up from the same month last year.  We have "low inventory" and limited choices of homes for sale.

Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.  That's not likely.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

And the yield will likely fall even lower now that the Federal Reserve has said it will continue selling short-term Treasury securities and using the proceeds to buy longer-term Treasurys. That goal of the program is to drive long-term interest rates lower to encourage more borrowing and spending.

For advice and real estate services you can trust call Spencer at 415-690-0194

North Bay Realty & Loans

Great News for Home Sellers

We're seeing bidding wars again in Marin.  There is a serious shortage of homes on the market now so if you're thinking of selling please give me a call. Spencer Hjort  415-690-0194 North Bay Realty & Loan Listing Inventories are Down 20 Percent

By Steve Cook

RISMEDIA, Friday, June 15, 2012— Key market indicators for May 2012 suggest that the housing market is steadily moving along a path of stabilization and gradual recovery, reports Realtor.com. The total U.S. for-sale inventory of single family homes, condos, townhomes and co-ops now stands at 1.88 million units, down -20.07 percent compared to a year ago and well below its peak of 3.10 million units in September, 2007, when Realtor.com first began tracking these data on the national level. The median age of inventory stood at 83 days in May, -9.78 percent lower than a year ago. The median list price in May, which has been rising steadily since January, was up 3.17 percent on annual basis and now stands at $194,900. Combined, these positive trends suggest a growing optimism on the part of sellers and increasingly balanced housing markets that have worked through much of their excess inventory. National trends mask pronounced differences across local housing markets. Signs of recovery are evident in a growing number of markets that were once the epicenter of the housing crisis and older industrialized areas in the Northeast and the Midwest are showing emerging signs of weaknesses. For example, the recovery process that began in Florida approximately one year ago has since spread to Phoenix and most recently, California. At the same time, markets such as Reading Pa, Allentown, Pa. and Milwaukee, Wis. continue to lag behind the rest of the market. On the whole, however, the majority of markets are showing signs of improvement. For sale inventories in May declined on a year-over-year basis in all but two of the 146 MSAs monitored by Realtor.com, with the for-sale inventory dropping -20 percent or more in roughly half (72) of the markets covered. At the same time, the median list price was up by 1 percent or more on a year-over-year basis in 108 markets, with 51 markets registering increases of 5 percent or more. Only 22 markets had a year-over year list price decline of 1 percent or more. While markets remain fragile, if current trends continue, 2012 could well be the beginning of a broad-based housing recovery. On a year-over-year basis, the median list price in May was up by 1 percent in 108 of the 146 MSAs monitored by Realtor.com, and up by 5 percent or more in 51 MSAs. The median list price was down by 1 percent or more in 22 markets, with only 3 markets registering declines of -5 percent or more. The remaining 16 markets have not experienced a significant change in median list prices compared to a year ago. This strong performance is another indication that the market is gaining steam in many parts of the country and represents a considerable improvement over patterns observed in May 2011.