Mortgage rates may be as low as they will get and are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s latest economic forecast. The group predicts rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to a 4.7% average in the first quarter of 2011 and climbing to 5.1% by the end of next year. Jay Brinkmann, chief economist of the MBA, said he expects a pickup in purchase originations next year. Refinance business, however, is expected to drop next year as mortgage rates begin their rise from record lows. Total mortgage volume is expected to be nearly $1 trillion in 2011, down from an anticipated $1.4 trillion this year and nearly $2 trillion in 2009. The industry is expected to originate an annual $480 billion in purchase mortgages by the end of this year and $626 billion next year; it’s expected to originate $921 billion in refinance mortgages by the end of this year, which will shrink to $370 billion next year. (www.marketwatch.com)
MarketWatch (10/26/10); Amy Hoak

The Federal Reserve’s latest Beige Book on economic conditions around the nation shows housing and mortgage markets that are generally stagnant, although with a few areas showing signs of improvement. In the Boston Federal Reserve District home sales were below levels of one year ago. In the New York district, median home prices were up everywhere with the exception of New Hampshire. Inventories of new homes for sale were up, which was seen as a sign of increased confidence among home sellers. Some increases in existing home sales were reported in the Philadelphia district, particularly at the low end of the price range. New home sales were expected to remain sluggish in the Cleveland district, with most activity among move-up buyers. Some bankers’ reports of increased mortgage lending in the Richmond, Va., district in September were attributed to people moving into the area. In the Atlanta district, persistent downward pressure on prices was reported and mortgage financing was becoming more difficult to obtain. All-cash purchases remained strong, particularly in Florida. In the Chicago district, one source reported that a few large home builders were resuming construction of single-family homes to replenish their inventories after a recent rise in sales contracts. Residential construction continued to improve throughout the St. Louis district. Little Rock, Ark., St. Louis and Memphis, Tenn., reported annual gains of 14% to 16%. Residential construction permits were mixed in the Minneapolis district, with the value of permits issued in September up 70% in Fargo, N.D., and 40% in Minneapolis but down 78% in Rochester, Minn., and 30% in Sioux Falls, S.D. The Kansas City district reported weakening residential and commercial real estate, with some improvement in upper-end home sales. Home builders, however, reported increases in housing starts, traffic and new home prices. New home sales appeared to have bottomed out in the Dallas district. In San Francisco, home sales were largely unchanged. A slight increase in home repairs and remodeling and some loosening of credit standards for certain types of borrowers were seen. (www.mortgageloan.com)
MortgageLoan (10/21/10); Kirk Haverkamp

As the number of foreclosures plateaus in Oregon, more home owners are sinking their heels into their properties, refusing to vacate repossessed properties. Some do not make a mortgage payment for more than two years yet refuse to budge, according to real estate insiders. This is contributing to the bogged-down state of the housing market and further muddying the mortgage mess. Real estate broker Margot Murphy, who deals in bank-owned properties, says she has seen an increase in the number of people willing to risk foreclosure, repossession and eviction. Nine of Murphy’s 20 repossessed properties, currently on her desk, remain occupied. The eviction process can take anywhere from six to eight months and by then the tenants usually leave before the court issues a lock-out, Murphy said. “The tenants are choosing to remain on the property. They are not afraid to face eviction,” she said. Joe Helmick, CEO of Gorilla Capital, a Eugene. Ore.-based company that buys and sells the most foreclosed homes of any company in Oregon, sees a related trend. He said his company in February sold three home owners their previously foreclosed homes with new lower mortgage rates. The owner never left his living room throughout the foreclosure process, Helmick said. Before this year, Helmick had never seen anything like it. Helmick calls it an innovative refinance strategy. The family of a house in Marion County never moved out. Gorilla Capital bought the house at auction and within 24 hours sold it back to the home owner for 56% of the original mortgage. (www.oregonbusiness.com)
Oregon Business (10/20/10); Jacq Lacy

The housing boom and bust in New Jersey and surrounding areas proved milder than the rest of the nation, with homes here stabilizing at relatively higher prices, according to a report issued on Oct. 19 by the New York Federal Reserve Bank. Home values in the Garden State rose higher than the national average during the 2000 to 2006 boom period, but their ensuing decline was cushioned by a mature economy with fewer housing starts, according to the report. In particular, Newark, Edison and Ocean City came out as “over-performers,” with home values in those towns soaring 12% to 17% during the boom years and falling less than 5% afterward. By contrast, homes in “boom-bust” cities like Phoenix, Miami, Las Vegas and Modesto, Calif., rose by a similar amount before plummeting 13% to 26%. Much of the region was also spared the worst effects of the nonprime mortgage loan crisis, though New Jersey showed more vulnerability than parts of New York. In Newark, high-risk mortgages accounted for 5.1% of all housing units, slightly lower than the national average but higher than the 3.2% for the New York City area. In the boom-bust cities, nonprime loans accounted for more than 10% of all housing units. (www.nj.com)
NJ.com (10/20/10); Leslie Kwoh, Star-Ledger

Home security systems have remained stubbornly low-tech over the last 10 years, but that is about to change as they become as high-tech as smart phones. The companies behind this technology are developing systems that essentially connect the entire house to the Internet. Companies such as Alarm.com and Honeywell International Inc. sell systems that don’t just allow the home owner to arm or disarm their security system from a website or iPhone app, but also let them adjust their thermostat, close the garage door, turn lights on and off, monitor their energy use and even watch live video from webcams scattered around the home. Dallas-based research firm Parks Associates found in a report earlier this year that the percentage of U.S. households with security monitoring has declined from nearly 19% in 2007 to 17.5% now. So security companies are expanding into new areas to appeal to customers who might not be as concerned about burglars and fires but who do want tools to monitor their homes. “Security is transitioning from being a stand-alone product and service, if you will, to being part of a much broader universe of offerings, which have become as much lifestyle as life safety," said Jonathan Klinger, vice president of marketing for Honeywell. A major hurdle for many security companies has been the declining number of homes with land-line phones. Until recently, security companies monitored alarm systems by connecting those systems to copper wire phone lines; without land lines, they are useless. So security systems have gone wireless, too. Many now have built-in antennas to connect to 2G cellular networks. That has the added benefit of giving security companies much more bandwidth over which to send data, allowing features such as energy management. Eventually, as 3G and 4G networks proliferate, those high-bandwidth services will be able to handle video streaming, too. For now, to watch live or recorded video from their home, home owners have to wire their cameras into a home broadband Internet connection, which some people have been doing for years. (www.kansascity.com)
Kansas City Star (10/27/10); Victor Godinez

These days radiant floors are becoming more popular, especially for those interested in green design. There are several benefits for the environment and your pocketbook. As the floors get toasty warm, they help heat the rest of the room by warming it up and making it more comfortable on a cold night. Radiant floors are easier to put in during the construction phase of a new home or when remodeling is done since the pipes are laid down beneath the flooring. According to the U.S. Department of Energy, “Hydronic radiant floor systems pump heated water from a boiler through tubing laid in a pattern underneath the floor. In some systems, the temperature in each room is controlled by regulating the flow of hot water through each tubing loop.” A system then uses zoning valves or pumps and thermostats to regulate the temperature for the rooms. “Because of the relatively high cost of electricity, electric radiant floors are usually only cost-effective if they include a significant thermal mass, such as a thick concrete floor, and your electric utility company offers time-of-use rates.” According to the Energy Department, air-heat radiant floors are the least affordable for residential homes because “air cannot hold large amounts of heat.” Even though, the departments points out, this type of floor can be combined with solar air heating systems, this is the least desirable of the three types of radiant floors. (www.realtytimes.com)
RealtyTimes (10/15/10); Phoebe Chongchua