Nation: Mortgage Applications Hit Two-Month High

With interest rates falling, the number of mortgage applications rose 7.3 percent on a seasonally adjusted basis in the week ending March 2. Application volumes last week rose about 16 percent from the same week a year ago, reported by the Mortgage Bankers Association. The number of applications for loans to buy homes rose 1 percent on a week-to-week basis and about 2 percent from a year ago. Although foreclosure rates are driving some lenders out of business, applications for loans to refinance existing mortgages increased 15 percent to the highest level seen in 12 weeks. Refinancing loans were up about 38 percent compared with this time last year. the average rate for 30-year fixed-rate loans dropped to 6.04 percent--the lowest rate in 11 weeks. The rate for 15-year fixed- averaged 5.73 percent, the lowest in 13 weeks. The Mortgage Bankers Association covers about half of all mortgages in the US.

St. Paul: West Side Happenings

A developer wants to add a a riverfront development of condos and shops to one of the most distinct and ethnically rich neighborhoods in St. Paul. The plans for The Bridges of St. Paul however are not without controversy. With points of contention including scale and financing, The Bridges is just part of the continuing development and revitalization taking hold in this historic neighborhood. Reservations are being taken for another development, the West Side Flats condo project. The condos will offer front-door access to Harriet Island Regional Park and views across Raspberry Island to the St. Paul skyline. Away from the riverfront is the renaissance of District Del Sol, an area in the heart of the West Side that includes restaurants, shops and the district's icon, El Burrito Mercado, a marketplace that draws shoppers from across the Twin Cities.

Nation: Mortgage Rates Hit 6-Week Low!

Rates on 30-year mortgages fell this week to the lowest level in six weeks. Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.22 percent this week compared to 6.30 last week. The decline was only the second since early December. It pushed rates to the lowest level since the 6.21 rate of the week of Jan. 11. One year ago, rates on 30-year mortgages stood at 6.26 percent.

Homebuilder confidence jumps

NEW YORK (Reuters) -- Homebuilders' confidence rose in February to its highest level since June 2006 as low mortgage rates and sales incentives helped boost demand, the National Association of Home Builders said Thursday.

The NAHB/Wells Fargo Housing Market Index jumped to 40 from 35 in January, its highest reading since hitting 42 in June 2006, the group said. The index has also rebounded from a 15-year low of 30 notched in September 2006.

Economists polled by Reuters had forecast the index to be unchanged. Readings below 50 indicate more builders view their market conditions as poor rather than favorable.

"The ... results are consistent with Federal Reserve Chairman Ben Bernanke's assessment to Congress this week that there are signs of stabilization on the demand side of the housing market," said David Seiders, chief economist at NAHB.


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Real Estate Remains The Best Investment Available.

The average home purchased five years ago has appreciated 49%. Even with the recent 2.2%decline in the median home price, this still equates to a more than 45% return on investment for the average homeowner. Media reports of a vast market decline are deceiving, and consumers will benefit from purchasing a home now before prices begin to rise once again.

According to Forbes magazine(using U.S. Department of Housing and Urban Development statistics), U.S. real estate sale prices increased more than 56% from the beginning of 1999 to the end of 2004. The S&P 500 index dipped nearly 6% during the same period.

While year -to-year fluctuations are normal, real estate remains one of the best performing and consistent long-term investments. Median existing U.S. home sale prices have increased on average 6.5% each year from 1972 through 2005, and 88.5% over the last 10 years combined. For consumers looking for long-term and stable growth rates, real estate is still their number one choice.

Existing-Home Sales To Improve, With Later Recovery For New Homes

February 07, 2007 -

Consumers are beginning to respond to more favorable housing market conditions, but new home construction will be dampened until inventories decline further, according to the latest forecast by the National Association of Realtors®.
David Lereah, NAR’s chief economist, is looking for a steady rise in existing-home sales. “After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008,” he said. “New-home sales should continue to slide, but we look for that sector to turn around later in the year. When you put it all together, home sales may appear weak in comparison with the record surge in 2005, but they will be sustained at historically high levels that are in line with long-term demand.”
Existing-home sales, after reaching the third highest total on record, 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million next year. New-home sales, following a fourth-best 1.06 million in 2006, are projected to decline to 961,000 this year and then rise to 971,000 in 2008.
Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. “When new home demand begins to catch up with supply, builders will slowly increase construction – probably in the second half of this year,” Lereah said.
The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. “Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions,” Lereah said. “When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.”
The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new-home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation-adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.

Minneapolis: Should Historic Alley Block $200 Million Development?

Minneapolis: Should Historic Alley Block $200 Million Development?

City officials and developers debated that question in a recent hearing on the Pacific Condo/Hotel project proposed for the 200 block of Washington Avenue. Project consultants said they did not realize construction of a parking ramp over an alley would even be a point of contention. "The alley is not a core feature of the Warehouse District," Historian Charlene Roise told the Heritage Preservation Commission, referring to the alley next to the Monte Carlo Building. Heritage Preservation and Zoning & Planning commissioners disagreed, voting that elimination of the 150-year old alley would negatively impact building bulk and scale, ultimately hurting the historic character of the neighborhood.