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Long Term Rates Drift Lower

The 30-year fixed-rate mortgage (FRM) averaged 5.53 percent, with an average 0.6 point, for the week ending June 30, 2005. Last year at this time, the 30-year FRM averaged 6.21 percent.
"With little threat of inflation to be found, long-term rates this week had some breathing room and that allowed rates to drift a little lower," said Frank Nothaft, Freddie Mac vice president and chief economist. "Short-term rates may be another

Mortgage Rates

Source: Realty Times

U.S. averages as of June 30, 2005:

30 yr. fixed:   5.53%
15 yr. fixed:   5.12%
1 yr. adj:        4.24%

matter, since the Federal Reserve is expected to continue raising its target for the federal funds rate at least a few more times this year.

Investors More Confident in Housing Than Stocks

Investors who responded to a recent UBS/Gallup survey said they continue to anticipate home price increases and are more optimistic about the real estate market than they are about the stock market. 63 percent of the respondents expect housing prices to rise in the second half of the year, with 18 percent of those investors expecting significant price hikes and 45 percent expecting modest increases.
Meanwhile, 13 percent expect prices to decline, and 23 percent expect no change in home prices during the next six months. The Index of Investor Optimism also shows that 38 percent of investors consider real estate to be a buyer's market, while 25 percent say it is currently a seller's market.

Home Building
Booms Unabated

Forget the bubble, it's full speed ahead in the new home market. U.S. Commerce Department figures released last month say housing starts edged up 0.2 percent to a seasonally adjusted rate of 2.009 million units for the month, 1.8 percent above last year's pace. Single-family home construction was the housing starts leader with a 4.7 percent increase to a pace of 1.704 million units, 3.3 percent above May of last year.
Given the popularity of condos, the slowdown in multi-family housing could give that sector's pricing an extra boost. Multi-family housing starts dropped in May on a national basis to a seasonally adjusted rate of 305,000 units. This was 19.3 percent below the multi-family market�s strong April showing.

Second Home Market Shines

The real estate industry and its pundits were stunned to learn, that nearly one in three homes sold in the United States in 2004 was a second home or investment, according to the National Association of Realtors. Here are some reasons the trend will continue.

In a recent survey of the wealthiest 10 percent of Americans, 8 percent reported plans to acquire a vacation home in the next year, up from less than 6 percent a year ago.

While 64 percent of the affluent second-home buyers are 55+, younger groups and the middle class are joining them.

"Second" home is a bit of a misnomer, as more and more affluent buyers have multiple homes.

An increasing number are buying a "second" home that is more expensive than their primary residence. The second home is often the "dream" home.
Reasons for buying second homes have multiplied beyond the vacation retreat. Fueling second-home sales are:

The use of vacation homes for family getaway time and to attract 20-something children, extended family and grandchildren visit.

Baby boomers who are anticipating retirement, buy a vacation home now to make sure they like it and to lock in prices before they go higher.

Equal Housing
Opportunity

Terry Denoux, P.C. Broker
Cellular: (541) 350-2921
Web: http://www.gobend.com
E-mail: terryd@gobend.com

RE/MAX Equity Group
235 SE Wilson Ave.
Bend, OR 97702

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