Tulsa housing market gets high rating

By ROBERT EVATT World Staff Writer
Published: 1/9/2009 6:47 PM
Last Modified: 1/9/2009 6:47 PM

Tulsa’s housing market will lose 1.1 percent of its value before it starts to recover by the end of the year, according to an estimate by Economy.com, a division of Moody’s.
Despite the expected depreciation, the prediction was good enough to tie Tulsa with Houston for the sixth-best performing home market during the recession.

The survey, published on Forbes magazine’s online component, indicates that U.S. home values as a whole will drop 15 percent by the time things hit bottom late this year or sometime in 2010.

Forbes’ article on the survey singled out Tulsa for having relatively low home value growth since 2004, moving from an average of $100,000 to $130,000.

As a result, home prices in Tulsa and other metro areas cited in the survey don’t have nearly as far to fall compared with housing markets that skyrocketed during the housing boom, Mark Zandi, chief economist for Economy.com, said in the Forbes article.

“None … participated in the housing boom,” he said. “Some are down just because the economy is bad.”

Of the 25 areas listed, none showed gains in home values in the near future and only two — McAllen, Texas, and Syracuse, N.Y. — were predicted to have no change in prices.

The figures are based on comparisons between home prices during the second quarter of 2008 and price projections through 2011, and examined metro areas larger than 500,000 people.

By ROBERT EVATT World Staff Writer

Mortgage rates still falling for buyers
New applications are up with the Fed’s expected infusion of funds.

By ALAN ZIBEL Associated Press
Published: 1/1/2009 2:29 AM
Last Modified: 1/1/2009 3:44 AM

WASHINGTON — Rates on 30-year mortgages fell to a record low for the third straight week and borrowers took advantage of the drop Wednesday, sending new applications soaring.

With the Federal Reserve on the verge of pouring hundreds of billions of dollars into the devastated U.S. housing market, mortgage rates have plunged to the lowest level since Freddie Mac started tracking the data in April 1971.

Low rates are a great opportunity for borrowers with solid credit and plenty of equity in their homes. But those in danger of foreclosure are still sidelined, and defaults are expected to keep rising in the coming months.

Freddie Mac reported that average rates on 30-year fixed mortgages dropped to 5.1 percent this week, down from the previous record of 5.14 percent set last week. It was the ninth straight weekly drop. The survey was released a day early due to the New Year’s holiday.

Mortgage rates have plunged by about 1.3 percentage points since late October, Freddie Mac said. For a borrower taking out a $200,000 loan, that means a savings of more than $170 in monthly payments, according to Frank Nothaft, the mortgage finance company’s chief economist.

Meanwhile, mortgage applications last week remained at the highest level in more than five years, the Mortgage Bankers Association said.

The trade group’s weekly application index was essentially unchanged for the week ending Dec. 26. Applications surged earlier this month to the highest level since July 2003, when refinancing activity boomed at the peak of the housing market.

More than 80 percent of applications came from borrowers looking to refinance at more affordable rates, the trade group said.

Interest rates have plunged since the Federal Reserve pledged last month to buy up mortgage-backed securities in an effort to bolster the long-suffering housing market. The Fed, starting early next month, will buy up to $500 billion in securities guaranteed by the government-controlled home loan giants Fannie Mae, Freddie Mac and Ginnie Mae, a federal agency.

“It’s a huge number,” said Derek Chen, an analyst at Barclays Capital, who noted that mortgage rates are still high when compared with yields on long-term Treasury debt.

With the Fed and Treasury Department buying up a significant portion of the new mortgage securities issued by Fannie and Freddie next year, that gap, or spread, could narrow.

If that happens, mortgage rates could fall further, possibly as low as 4.5 percent, Chen said.

The average rate on a 15-year fixed-rate mortgage dropped to 4.83 percent, the lowest point since March 2004. That rate was 4.91 percent last week, Freddie Mac said.

Rates on five-year, adjustable-rate mortgages rose to 5.57 percent, compared with 5.49 percent last week. Rates on one-year, adjustable-rate mortgages fell to 4.85 percent, from 4.95 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year, 15-year mortgages and five-year adjustable rate mortgages averaged 0.7 point last week, compared with 0.5 point for one-year adjustable-rate mortgages.
By ALAN ZIBEL Associated Press