Here are the highlights of last weeks (June 4th to June 10th) national and regional economic, financial and real estate news, that may  effect the local real estate markets here in Orange County: 

• Fed funds futures expect the Fed to remain on hold through the remainder of this year. But the options market of fed fund futures at the Chicago Board of Trade indicate a 41% chance of a 25 basis point rate hike this year according to data compiled by Bloomberg. That would raise the target for the fed funds rate to 5.50% from 5.25% currently.


• Fed Chairman Ben Bernanke reiterated the Fed’s outlook for moderate economic growth with hopefully, easing inflationary pressures. He went on to say that the ongoing slowdown in the housing sector could go on for longer than expected and remain a drag on economic growth. The Chairman expects foreclosures and delinquencies to continue to rise this year and next as many with adjustable rates find it difficult to refinance amid higher interest rates and lower home prices. However, he said he saw no major spillovers from housing to other sectors of the economy.


• The National Association of Realtors cut their forecasts for home sales and home prices again this month for the third month in a row as the correction in the housing market impacts the current spring selling season. The NAR predicts that the median price for an existing home will drop 1.3% this year while new home prices are expected to decline 2.3%. Sales of existing homes are expected to fall to 6.18 million, down 4.6% from 2006 and off 1.7% from estimates in May. New home sales are expected to come in at 860,000 down 18% from last year.


• The MBA mortgage applications index declined 1.7% to 625.3% for the week that ended June 1. Higher mortgage rates continue to cut into mortgage application volume. The purchase index rose 1.5% to maintain a high and steady pace while the refinance index plunged 6.3%. Despite the drop, refinancing activity remains strong but higher rates pose a downside risk going forward.


• Mortgage rates surged last week on strong job growth and wage increases. Higher labor costs could be passed through to consumer goods thus stoking inflationary pressures. 30-year fixed rate mortgages averaged 6.53% this week compared to 6.42% last week according to Freddie Mac’s mortgage market survey.

If you have any questions regarding mortgage loans for the purchase of a home or condo here in Orange County, CA., or if you would like a second quote on a Mortgage loan with very low interest rates and low costs, please feel free to call us at:  949-388-3396 or drop us an email at:  Info@SearchOCHomes.com