Unexpected Increase in Pending Home Sales In July

Pending homes sales increased in July from a record low, indicating the market may be steadying after the cessation of the federal tax credit program.  The National Association of Realtors released figures showin that their index of purchase contracts rose 5.2%.

This news came at the same time that reports show that unemployment claims have decreased and factory orders are on the rise, which have diminished fears that the economy is tipping back into a double-dip recession.

Bloomberg News states that this favorable market data supports Fed Chairman Ben Bernanke's scenario for a "modest" pace of growth in the 2nd half of 2010.

City of Oroville Announces Funds for New Home Buyers & Home Improvements

The City of Oroville's First Time Home Buyer Program has $2.5 Million and offers loans up to $200,000, or 45% of the value of a new home.  The property being purchased must be within the City limits and income and credit restrictions apply.  The City loans accrue interest, but payments are deferred until the home is sold, title transferred or the first mortgage paid off.   More information is available at the Housing Development Department's website.

Housing Rehabilitation Program has more than $500,000 which can provide homeowners with loans of up to $60,000 which can be used for necessary health, safety or code repairs or to upgrade energy efficiency.  Details and information on how to apply are available at their website.

Rates Lowest since 1971!

Average rates on 30-year fixed rate mortgages dropped below 4.5% last week, averaging 4.49 percent, down from 4.54 percent the previous week.  The average rate on 15-year fixed rate mortgages was 3.95%

And The Rates Keep Dropping

As of 6/25/2010, average rates have fallen to record lows with 30-year mortgage rates dropping to 4.69% and rates on 15-year amortizations as 4.13%

Overall the real estate market remains sluggish due to higher unemployment and continued supply of REO properties hitting the market.

At Sunset Vista Realty, we're noticing an uptick in the number of prospective buyers and are having a hard time finding an adequate supply of nicer properties to supply the demand.

For sellerrs who have been sitting on the sidelines, this may be an excellent time to finally sell your property and for buyers the prices and interest rates couldn't be better.

Mortgage Rates Are Lowest of the Year

Continued worries about European debt is pushing down the yields on US Treasuries; fixed mortgage rates tend to follow the rates on 10-year Treasury Bills.  This resulted in a drop in 30-year mortgage rates to 4.84, down from 4.93 the week before and the lowest since December 2009.

Unexpected Drop in Mortgage Rates

Rates for 30-year fixed mortgages dropped to 5 percent as uncertainty over the Greek credit crisis drove investors to seek safety in US Treasuries.  Yields on government supported bonds tied to home loans are following the drop in interest on T-Bills.  15-year fixed rates dropped to 4.36 percent.  These are the lowest rates since March of 2010.

Rate of Homes Heading Into Foreclosure Declines

Notices of Default, the first stage in the foreclosure process, were down 4% in the quarter ending March 2010 in California from the previous quarter according to a news report in today's San Francisco Chronicle. 

The decrease is attributed to efforts by the federal government to increase the number of loan modifications for distresssed borrowers as well as some mortgage lenders working to facilitate their short sale processes.  

Trustee deeds, the final step of bank repossession, were also down. The state saw a 16 percent decline in the first quarter of 2010.

The Obama administration is pushing lenders to reduce homeowners' monthly payments through the $75 billion Home Affordable Modification Program.  The White House recently announced major changes that will expand to include unemployed workers and payments to lenders to reduce the principal owed on mortgages.

See my 4/13/10 post for more information on the Short Sale process and links to resources for initiating the process with your lender.