This is a follow up to our post on 9/25/07. Perhaps it’s no surprise but a new report released shows that new home sales lagging as well. Here’s the details:
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According to a report released today by the National Association of Realtors, inventories of existing single faimily homes rose to there highest level in 18 years. This as sales of existing homes fell 4.3% when compared to the previous month.
The housing market had already fallen to its lowest levels in 16 years when turbulence in the credit markets created further uncertainty. Because of these market conditions, sureties are implementing new criteria to there underwriting practices that are making it just that much harder for mortgage brokers to obtain mortgage bonds. In fact those that can get bonded are finding that rates are climbing as sureties try to protect themselves from this greater perceived risk. On the same note as above, mortgage lenders will find approval near impossible, as several sureties are dropping currently bonded lenders.
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A report released by The Commerce Department onWednesday stated that construction of new homes fell 2.6% in August to a seasonally adjusted annual rate of 1.331 million units; This is slowest pace for housing starts since June 1995, when there was a rate of 1.281 million units.
Of note: the region most effected was the Northeast, where they experienced a fall 38% in August, the sharpest drop since December 1990. Starts were off 18% in the West but rose 4.2% in the Midwest and 11.4% in the South.
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The National Association of Realtors’ on Tuesday droppe its 2007 forecast for existing home sales for the seventh-straight month, now they are currently predicting a drop of 8.6 percent from last year.
The trade group for real estate agents revised monthly prediction calls for U.S. existing home sales of 5.9 million in 2007, down from 6.5 million last year. Last month’s prediction was for a drop of 6.8%.
If this forecast hold accurate, it would be lowest sales since 2002 (5.6 million). Home sale prices this year are forecast to drop 1.7 percent to a median of $218,200.
Next year, the trade group expects existing home sales to climb to 6.3 million. It forecasts new home sales will fall 24 percent to 801,000 this year and 741,000 next year.
Mortgage Brokers in need of a mortgage broker bond, please visit our surety bond website.
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The Mortgage Bankers Association’s mortgage applications index rose by a seasonally adjusted 1.3% to 622.9 the week ended Aug. 31. Average 30-year loan rates rose 0.01 percentage point to 6.42%.
ARMs made up just 12.6% of mortgage applications last week, down from 15% the prior week, the MBA said. At their recent peak, more than 30% of new loans were adjustable-rate products.
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