The Latest on Mortgage Rates: Still Low

By Mia Lamar

Average mortgage rates in the U.S. dropped to new record lows over the past week after data on the nation’s economic growth fell short of market forecasts, according to Freddie Mac’s weekly survey of mortgage rates.

A report from the Commerce Department last week showed U.S. gross domestic product—the value of all goods and services produced—grew at an annual rate of 2.8% in the October-to-December period. The data showed the U.S. economy expanded at the fastest pace since the second quarter of 2010, yet fell short of the expected 3% rate.

For the week ended Thursday, the 30-year fixed-rate mortgage averaged 3.87%, down from 3.98% the previous week and 4.81% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.14%, down from 3.24% last week and 4.08% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARM, averaged 2.8%, below the 2.85% rate averaged last week and 3.69% a year ago. One-year Treasury-indexed ARM rates averaged 2.76%, down from 2.74% and 3.26%, respectively.

To obtain the rates, 30-year and 15-year fixed-rate mortgages required an average 0.8 percentage point payment. Five-year and one-year adjustable rate mortgages required an average 0.7 percentage point and 0.6 percentage point payment, respectively. A point is 1% of the mortgage amount, charged as prepaid interest.

Despite the low mortgage rates, housing markets across the country continue to struggle. CoreLogic reported Thursday that U.S. home prices, including distressed sales, fell 4.7% in December compared with December 2010, the fifth consecutive year of price drops. Excluding distressed sales, CoreLogic’s home-price index fell .9% in December, which shows how much foreclosures and short sales are weighing down prices in some markets.

Write to Mia Lamar at mia.lamar@dowjones.com

OBAMA ADMINISTRATION RELEASES DECEMBER HOUSING SCORECARD

WASHINGTON- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the December edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. Data in the December Housing Scorecard show some subtle improvements in the market over the past year, but underscore fragility as the overall outlook remains mixed. For example, new and existing home sales rose compared to the prior month and remain higher than a year ago, and homes are more affordable than they have been since 1971. Median-income families today have nearly double the funds needed to cover the cost of the average home. However, home prices showed a slight dip from the prior month and remain below year ago levels. The full report is available online at www.hud.gov/scorecard.

London’s Home Shortage Set to Get Worse

London looks likely to experience a drought of new housing over the next few years, as construction of homes amid fears of renewed recession and a dearth of mortgage finance, a report from property consultant suggests.

PIH Notices

2012-04 Effective
Use of the Enterprise Income Verification (EIV) System’s Deceased Tenants
Report to Reduce Subsidy Payment & Administrative Errors
2012-02 Guidance
on Public Housing Operating Funds
(Repost)

Home prices post steep decline in November

Home prices posted a steep, month-over-month drop in November, falling 1.3%, according to the latest S&P/Case-Shiller 20-city report. Prices fell in 19 of the 20 cities the index covers.