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The Markets:  Rates fell moderately in the past week. Freddie Mac announced that for the week ending November 13, 30-year fixed rates averaged 6.14%, down from 6.20% the week before. The average for 15-year fixed fell as well to 5.81%. Adjustables were mixed with the average for one-year adjustables increasing to 5.33% and five-year adjustables falling to 5.98%. A year ago 30-year fixed rates were at 6.24%. "Long-term rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide," said Frank Nothaft, Freddie Mac vice president and chief economist. "In addition, the actions of the Fed in recent weeks to assist commercial paper markets appear to be thawing part of the credit freeze that has gripped capital markets in the U.S., giving banks some breathing room. This is the second week that rates have come down. The National Association of Realtors® (NAR) reported that pending existing home sales fell 4.6 percent in September, below the market consensus; however, the index was 1.6 percent above that of the same period last year."
 
Current Indices For Adjustable Rate Mortgages
 

Despite pressure on Congress to extend higher temporary limits, the government has announced that conforming limits for 2009 will stay at a base $417,000 and move to $625,500 in high cost areas–down from the current limit of $729,750. FHA has released their limits for 2009 as well and these are set at 65% of conforming limits for low-cost areas ($271,050) and 150% of conforming limits for high cost areas ($625,500). This means that prospective homeowners in high-cost areas should be acting before the end of the year to take advantage of these higher limits with lower rates. Call now for more information. Source: Federal Housing Administration
 
The 2008 National Association of Realtors Profile of Home Buyers and Sellers reveals that the number of first-time buyers have risen as a percentage of the market share and they plan to own their homes longer than buyers in the past. Lawrence Yun, NAR chief economist, said a higher share of first-time buyers makes perfect sense, and it’s a trend he expects to grow. “First-time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home,” he said. “Given low home prices, plentiful supply, and affordable rates, it’s been an optimal time for entry-level buyers with a long-term view. “Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the flow of credit improves – that, in turn, should free more existing owners to make a trade in 2009.” The number of first-time buyers rose to 41 percent from 39 percent of transactions in last year’s survey and 36 percent in 2006. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007. The median down payment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. Commuting costs factored greatly in neighborhood selection, with 41 percent of buyers saying they were very important and another 39 percent saying transportation costs were somewhat important. Source: National Association of Realtors
 
Housing inventories in 29 major metropolitan areas declined 1.6 percent in October compared to levels in September, according to figures compiled by ZipRealty Inc. Typically home inventories rise in October compared with September, increasing an average of 1.1 percent, says research firm Zelman & Associates. The number of homes for sale in the 29 metro areas where ZipRealty does business was down 9.3 percent from a year earlier, the company says. This figure doesn’t include foreclosed properties not included in the multiple-listing services. Source: The Wall Street Journal