Here is the economic and financial news from this past week that may impact the local real estate market here in Orange County, CA.
- The June NAHB Housing Market Index fell by two points to 28 from the previous month, the lowest since February, 1991. Homebuilders rated current sales and sales six months from now lower, while foot traffic through model home homes decreased. The dip indicates a slip in builder confidence, fueled in part by sub-prime related problems, coupled with a growing inventory. The low level of the index suggests that weakness in residential construction will continue.
- The June NAHB Housing Market Index fell by two points to 28 from the previous month, the lowest since February, 1991. Homebuilders rated current sales and sales six months from now lower, while foot traffic through model home homes decreased. The dip indicates a slip in builder confidence, fueled in part by sub-prime related problems, coupled with a growing inventory. The low level of the index suggests that weakness in residential construction will continue.
- Housing starts fell 2.1% to an annual rate of 1.47 million in May, about in line with expectations. This was the first decline in the past four months as starts fell 24.4% over the past year. Again, weakness was led by the single family sector. Permit issuance, often used as a proxy for future starts activity, gained 3.0% in May to 1.50 million. There has been some stabilization in construction starts over the last few months however; the correction in the housing market is not expected to bottom out until late this year.
- The MBA reported last week that 0.58% of loans entered the foreclosure process in the first quarter compared to 0.54% in Q406 and 0.41% in the first quarter of last year. Softening home prices are exacerbating the problem as many looking to refinance are unable to and instead face costly resets of low introductory rates. Rising foreclosures will put more homes on the market at a time of already high levels of inventories. The MBA’s chief economists predicted that delinquencies would continue to rise, peaking later in the year. Foreclosures in Orange County have increased as well.
- The MBA mortgage applications index fell 3.4% to 643.7% for the week that ended June 15. Both purchase and refinance application volumes declined as mortgage rates jumped by the most in over three years. Nevertheless, overall application activity remains 13.4% higher than year ago levels.
- Mortgage rates eased this week in Orange County on the heels recent, softer housing market reports. The concern is that the drag from the housing sector will become more of an issue in the broader economy. 30-year fixed rate mortgages averaged 6.69% this week compared to 6.74% last week according to Freddie Mac’s mortgage market survey. Housing shaved 0.8 percentage points off of Q1 GDP and 1.2 percentage points from the second half of last year.
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
