Mortgage rates on the rise
After mortgage rates dropped below four percent for the first time, they are back on the rise, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) which shows the average fixed mortgage rates are up sharply from the previous (and historic) week, and although they remain hear their sixty year lows, with Freddie Mac pointing to the employment report last week that was better than analysts had expected.
Dr. Frank Nothaft, VP and Chief Economist of Freddie Mac said, “An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well. The economy added 103,000 workers in September, aided by the return of striking Verizon workers. In addition, revisions to July and August figures added a total of 99,000 jobs to payrolls. However, these job gains are still not large enough to bring down the current unemployment rate of 9.1 percent.”
The 30-year fixed-rate mortgage averaged 4.12 percent last week according to the report, and the 15-year fixed rate mortgage averaged 3.37 percent.
Foreclosure activity in Q3
According to RealtyTrac, foreclosures continue to be problematic for the housing sector as the foreclosure process has been lengthened by the “growing backlog” of foreclosures. Foreclosure filings for the third quarter rose less than one percent, but after three quarters in a row of decreases, the third quarter broke the trend.
RealtyTrac CEO James Saccacio said, “This marginal increase in overall foreclosure activity was fueled by a 14% jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures.”
Foreclosures down nearly 40% year over year
From August to September there was actually a six percent drop in foreclosures, and over the year, foreclosure activity has dipped 38 percent. “While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up,” said Saccacio.
Foreclosure process taking longer
During the third quarter, once initiated, the foreclosure process took an average of 336 days to complete, notes the RealtyTrac report, up from 318 days in the second quarter. Regionally, process times varied – New York averaged 986 days in September while Texas takes 86 days, down from 92 days last quarter (although up from 53 from Q3 2007).
With the process taking longer, and the backlog growing, foreclosures look to continue being a blight on the economy, particularly the housing sector.