Mortgage Rates See-Saw, New Home Building Booms, Resales Remain Hot, Escaping Annoying Neighbors by Broderick Perkins
That whooshing sound your heard around the nation last Thursday wasn't air coming out of the bubble, but a collective sign of relief from mortgage consumers after Freddie Mac announced rates had see-sawed back down last week. The 30-year fixed-rate mortgage (FRM) tipped down to an average 5.57 percent rate, for the week ending June 23, down from the previous week when it averaged 5.63 percent. The 5.63 percent was a step up from 5.56 percent the week before and the 5.56 rate, the lowest so far this year, was a step down, reported Freddie Mac. The tetter-tottering has left mortgage rates near historic lows without moving much all year and according to recent forecasts they still have room to fall. "Existing home sales in May were at the second highest level ever recorded, suggesting the housing market still has a good head of steam," said Frank Nothaft, Freddie Mac vice president and chief economist. Resale Market Remains Heated Buyers bought resale homes in May at near record levels, generating demand that pushed prices upward to a new record median of $207,000, up 12.5 percent from a year ago according to the National Association of Realtors. Condos and cooperatives are cheaper than single family homes in most markets, but had a higher median price than single family homes in May -- $221,000 in May, up 15.2 percent from a year ago for condos and $204,600, up 12.2 percent for single-family homes. Condo sales accounted for only 12.9 percent of market activity in May, indicating the median price is skewed higher. That's because more and more of them are in the most expensive housing markets as well as newer resort, luxury or upscale communities now entering the resale market. Condo prices have been growing faster than single family home prices for the past four years, but only in the last year has the condo median eclipsed that for single-family homes, according to Walter Molony, NAR spokesman. The second highest on record, sales of all existing homes (single-family, townhomes, condominiums and coops) moved to a seasonally adjusted annual rate of 7.13 million in May, down just 0.7 percent from the record 7.18 million in April. Sales remained 3.5 percent above the 6.89 million-unit level in May 2004. Home Building Booms Unabated Damn the bubble, it's full speed ahead in the new home market. U.S. Commerce Department figures released this month say housing starts edged up 0.2 percent to a seasonally adjusted rate of 2.009 million unites for the month, 1.8 percent above last year's pace. Single-family home construction was the housing starts leader with a 4.7 percent increase to a pace of 1.704 million units, 3.3 percent above May of last year. Given the popularity of condos, the slowdown in multi-family housing could give that sector's pricing an extra boost. Multi-family housing starts dropped in May on a national basis to a seasonally adjusted rate of 305,000 units. This was 19.3 percent below the multi-family market’s strong April showing. "Builders are operating at capacity," said Dave Wilson, president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho. There Goes The Neighbor -- Good! People are more concerned about getting away from their nosy, noisy neighbors than even their overbearing boss or infighting family members. Forty percent of those surveyed ranked neighbors among the top three people in their lives from which they most need to escape, surpassing even their boss (34 percent) and their immediate family, including spouses/partners, 32 percent; and children, 31 percent. Giving new meaning to "getting out of the house," Harris Interactive, for Princess Cruises, recently assessed adult consumer opinions about the need to "escape," including people they'd most like to lose, ways to flee stress and people who most need a vacation. With those horrible neighbors, it's no wonder the person who most needs a vacation was most often the person being surveyed. Seventy-nine percent of U.S. adults placed themselves first on the list as the person who most needs to get away from it all. | 
