14 Aralık 2007 Cuma

California new-home sales sink 46% in October

New-home sales dropped 45.6 percent in California while median new-home prices fell 10.8 percent in October compared to October 2007, the California Building Industry Association and Hanley Wood Market Intelligence reported today.

The groups reported 3,292 new-home sales statewide for all new-home types in October, down from 6,047 sales in October 2006, according to the report. The median price across all new-home types was $405,900, down from $455,000 in October 2006.

Single-family new-home sales fell 37 percent, from 4,075 in October 2006 to 2,568 in October 2007, while the median price of single-family new homes fell 12.9 percent, from $461,400 in October 2006 to $401,990 in October 2007.

Among those market areas with more than 100 sales in October, sales for all new-home types fell 75 percent in Sacramento compared to October 2006 and dropped 54.1 percent in Santa Ana-Anaheim-Irvine, 51 percent in San Diego-Carlsbad-San Marcos, 47.6 percent in Bakersfield, 41.4 percent in Los Angeles-Long Beach-Glendale, 34.5 percent in Oakland-Fremont-Hayward, 28.6 percent in Riverside-San Bernardino-Ontario and 10.7 percent in Fresno.

The median price for all new-home types in the Fresno area dropped 14.1 percent year-over-year in October, and fell 12.2 percent in Riverside, 10.7 percent in Bakersfield, 6.3 percent in Sacramento, 1 percent in San Diego, and 0.6 percent in Los Angeles while rising 0.5 percent in Oakland and 13.5 percent in the Santa Ana market area.

New condo sales dropped 70.6 percent in California year-over-year in October, falling from 1,481 in October 2006 to 436 in October 2007. And the median price of new condos in the state dropped 1 percent, from $415,000 in October 2006 to $411,000 in October 2007.

Sales of new townhomes and plexes (duplexes, triplexes, etc.) dropped 41.3 percent, from 491 in October 2006 to 288 in October 2007, while the median price of new townhomes and plexes dropped 11.3 percent, from $469,000 in October 2006 to $415,900 in October 2007.

Jonathan Dienhart, director of published research for Manley Wood Market Intelligence, said in a statement, "There doesn't currently seem to be an end in sight in regards to the problems in the mortgage industry. The market must once again find equilibrium; that can only happen when more home buyers gain access to credit again, and home prices have relaxed to the point where they can still qualify for a mortgage under more strict lending guidelines."

He added, "If potential home buyers are convinced it's a bad time to purchase a house, there is only so much that pricing and credit options are going to help. Consumers need to regain their confidence regarding housing before we will see widespread recovery."

And Robert Rivinius, president and CEO for the state builders' group, said in a statement, "As of this week, the latest projections are that the state's budget next year will be $14 billion in the red -- with much of the deficit directly linked to the continued weakness in the housing sector."

New-home sales and prices, October 2007, all new-home types

House ponders mortgage bankruptcy bill

Committee to vote Wednesday; lending industry opposed to proposal, which would aid bankrupt homeowners by letting judges reduce their loans.

WASHINGTON (AP) -- A House committee is scheduled to vote Wednesday on legislation that would permit judges to shrink the size of home loans for bankrupt homeowners - a mortgage-mess remedy supported by consumer advocates and ardently opposed by the lending industry.

Many Democrats say the proposal is a better way to help homeowners than a plan to freeze interest rates announced by the Bush administration last week and negotiated with lenders and investors.

Mortgage-industry leaders say the proposed legislation would open a floodgate of bankruptcy filings, further threatening the industry's already shaky footing. Lenders, they argue, would be forced to charge higher rates to offset any unpaid loan balances that would be reduced in court.

The House Judiciary Committee's hearing is scheduled for 10:15 a.m. EST. The bill is unlikely to head to the full House until next year, but could gather steam as Congress faces increasing pressure to do something about mounting foreclosures and defaults.

Under existing law, judges can't modify loan terms on a borrower's primary residence, but can do so for mortgages on second homes.

Democrats have pushed for legislation to extend a bankruptcy judge's so-called 'cramdown' power to primary home loans. Doing so, advocates say, could help more than 500,000 homeowners avoid foreclosure.

The bill up for consideration Wednesday is a compromise between House Judiciary Committee Chairman John Conyers, D-Mich., and Rep. Steve Chabot, R-Ohio.

It would apply to subprime loans made since 2000 to borrowers with shaky credit, and other nontraditional loans, such as those in which borrowers only make interest payments.

The bill "assists a broad category of homeowners who would not otherwise benefit" from the Bush administration's proposal, Conyers said in a statement Tuesday.

The Center for Responsible Lending, a Durham, N.C.-based consumer group, estimates that 145,000 households will qualify for the administration's rate freeze. Mark Zandi, chief economist with Moody's Economy.com, calculates that about 250,000 borrowers will likely benefit from it.

President Bush, announcing the initiative last Thursday, said 1.2 million homeowners could be eligible for relief, which includes the rate freeze and efforts to helping people refinance into more affordable mortgages.

Financial markets have been turbulent for much of the year amid worries about the growing scope of losses in investments tied to residential mortgages. On Tuesday, the chief executives of government sponsored mortgage-finance companies Fannie Mae (Charts) and Freddie Mac (Charts, Fortune 500) warned the suffering isn't over for their ailing mortgage-finance companies.

Freddie's CEO, Richard Syron, said the McLean, Va.-based company could lose an additional $5.5 billion to $7.5 billion over the next few years from soured home loans.

Mortgage applications rise

Despite a jump in interest rates, the Mortgage Bankers Association's application index increases in latest week to 811.8 from 791.8.

WASHINGTON (AP) -- Mortgage application volume increased 2.5 percent for the week ending Dec. 7, according to the trade group Mortgage Bankers Association's weekly application survey.

The MBA's weekly application index rose to 811.8 from 791.8 the previous week.

Refinance volume increased 4.3 percent, while purchase volume grew 1.7 percent. Refinance applications accounted for 57.6 percent of total mortgage applications during the week ending Dec. 7, compared with 56 percent during the prior week.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 811.8 means mortgage application activity is 8.118 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.

Mortgage applications rose despite a jump in interest rates. The average interest rate for traditional, 30-year fixed-rate mortgages grew to 6.07 percent during the week ending Dec. 7, from 5.82 percent during the prior week.

The average interest rate for one-year adjustable-rate mortgages increased to 6.31 percent from 6.28 percent.