Estate and mortgageAugust Roundup: Rates Slip Again; Price Boom Continues; Record Building Permits; 2007 Remembers Y2K
Whew!
Taking some of the jitters out of the housing market, average mortgage interest rates fell for the second brow-wiping week in a row, nearly wiping out four weeks of increases.
After two slips in as many weeks, the average interest rate returned to levels that last existed a month ago, and earlier at the start of the year, giving buyers and home owners looking to refinance a second wind -- again.
Freddie Mac reported fixed interest rates on 30-year, conforming
mortgages averaged 5.77 percent the week ending Aug. 25, down from 5.8 percent the week before and 5.89 percent on Aug. 11 when rates last stopped rising.
Rates last began to rise after June 30 when they hit the year"s lowest level at 5.53 percent.
But that"s not the first time rates see-sawed this year, signaling rate setters aren"t going down without a fight.
The first rate report of the year put the average rate at 5.77 percent. By Feb. 10, that had fallen to 5.57 percent, only to turn up to the year"s high point of 6.04 by March 31.
By June, the average was down to 5.53 percent.
Home Price Boom Grips Nation
The national median existing-home price for all housing types was $218,000 in July, up 14.1 percent from July 2004 when the median price was $191,000, according to the National Association of Realtors.
"In examining the hottest markets for home price appreciation, we see a rolling boom moving from one metro area to another over time, as well as a spill over effect into nearby areas with lower home prices," said David Lereah, NAR"s chief economist.
"This is spreading the wealth of housing returns, with a natural easing of appreciation in areas following a period of extraordinary price growth. Even after slowing in a given area, prices typically have continued to rise faster than historic norms," he added.
Dispelling forecasts of balloon market theorists, NAR reported that over the last four-and-a-half years of record home sales, no area that has experienced a sustained period of double-digit price growth has later seen a price decline. Federal Reserve Chairman Alan Greenspan has made similar comments, stating that since World War II, sustained home price growth has never been followed by declines equal to the previous growth in prices.
Building Permits Hit Record
Housing starts for July dipped from June"s level, but continued at a robust rate, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The two reported a seasonally adjusted annual rate of 2.042 million housing starts in July, down from June"s revised 2.045 million.
However, building permits were at a 32-year high in July at a 2.167 million annual rate, indicating solid future construction and high builder confidence.
2007 Is No Y2K
Put this in your March 2007 tickler file.
Reminiscent of Y2K fears, a provision in the nation"s new energy policy could play a little havoc with some electronics" built in clocks and timers.
The "Energy Policy Act of 2005 (EPACT)" establishes the nation"s energy policy for the foreseeable future and comes with a month-long extension of daylight-savings time beginning in 2007.
That year, daylight-saving time will start three weeks earlier than it has since 1987 -- on the second Sunday in March. It will end a week later than it has since 1987 -- on the first Sunday in November.
Designed as an energy-saving measure to lop an estimated 1 percent off household energy bills, it could also be a hair-pulling experience for those who schedule their lives using electronics with built-in clocks designed to automatically change back and forth from daylight-savings time to regular time.
Let"s see -- spring forward, fall back -- okay.
While new electronics soon will be configured to recognize the new daylight-savings time period, any leftover gadgets could cause you to show up unfashionably early for a host of events. You"ll appear to be camping out for a home tour, over eager for a job, crashing a wedding or pretty smart at the airport.
Unfortunately, you may have to remember to manually reset your clocks and timers.
Y2K was a lot less scary.