March 12, 2007 11:43am
Article from: AAP
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HOME loan approvals grew modestly for a second consecutive month as consumers slowly returned to the housing market after last year's three interest rate rises.
Loan approvals had previously dropped for four months in a row.
Australian Bureau of Statistics' data shows housing finance approvals for owner occupied dwellings rose 0.3 per cent in January to 61,969 compared to December.
Economists had expected finance approvals to rise 1.0 per cent in January.
Economists said people may have been more comfortable in taking out a loan in January after a low quarterly inflation reading suggested the central bank would not have to raise interest rates again any time soon.
Since then, the central bank has indicated that it is in no haste to lift rates further, although has warned that they are more likely to rise than fall in the future.
Housing Industry Association chief economist Harley Dale said there may not be a sustained recovery in the housing market until well into this year.
"We will be some way into 2007 before we see any sign of sustained recovery," Mr Dale said.
"We are still seeing the effects of the third of the three rate rises impacting on this kind of data.
"We're a way off from seeing some strength come back through. The new housing sector is going to take some time to recover."
But Westpac senior economist Matthew Hassan said that while last year's interest rate rises had kept housing finance figures for January below expectations, the result was still stable.
Total housing finance by value rose 2.3 per cent in January, seasonally adjusted, to $20.179 billion. "Once again it's suggesting to us that the household sector and the housing sector have been very resilient in the face of interest rate rises, particularly the last rate rise in November," he said.
"Normally you might have expected any weakness from the rate move to still be extending into January, but here we've got a pretty solid firming."
Mr Hassan said the 1 per cent rise in housing construction during the month, as well as the 4.6 per cent gain in the purchase of new dwellings was positive.
"Those are pretty solid numbers and they bode well for construction as the year progresses," he said.
"We're seeing this as resilience and the sector's positioned well for a recover as the year progresses, probably gaining momentum in the second half."
Monday, March 12, 2007
Federal Home Loan Bank of Pittsburgh
Federal Home Loan Bank of Pittsburgh601 Grant StreetPittsburgh, PA 15219-4455USA
www.fhlb-pgh.com412-288-3400412-288-2899 (Fax)Neil.cotiaux@fhlb-pgh.com
For More Information Contact
Neil Cotiaux, Public Relations Manager412-288-2851
Cyla Alcantara, PR Coordinator412-288-2860
Description
The Federal Home Loan Bank of Pittsburgh (FHLBank) is a privately-owned, privately-capitalized cooperative of financial institutions operating in Delaware, Pennsylvania and West Virginia. It provides low-cost funding to, buys mortgages from, and makes affordable housing grants through its several hundred member institutions. Chartered by Congress in 1932, FHLBank Pittsburgh uses no tax dollars. It is one of 12 FHLBanks that serve regional banking districts across the country.
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Somali Refugees Begin Learning Financial Skills; Resettled Muslim Minority Gains a New Tool for American Living
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www.fhlb-pgh.com412-288-3400412-288-2899 (Fax)Neil.cotiaux@fhlb-pgh.com
For More Information Contact
Neil Cotiaux, Public Relations Manager412-288-2851
Cyla Alcantara, PR Coordinator412-288-2860
Description
The Federal Home Loan Bank of Pittsburgh (FHLBank) is a privately-owned, privately-capitalized cooperative of financial institutions operating in Delaware, Pennsylvania and West Virginia. It provides low-cost funding to, buys mortgages from, and makes affordable housing grants through its several hundred member institutions. Chartered by Congress in 1932, FHLBank Pittsburgh uses no tax dollars. It is one of 12 FHLBanks that serve regional banking districts across the country.
Federal Home Loan Bank of Pittsburgh News, Events and Reports
Category
Submission Date
Submission Title
News
2.27.2007
The Federal Home Loan Bank of Pittsburgh Allocates $24.2 Million for Affordable Housing Program; Community Financial Institutions Can Be Paired With Affordable Housing Developers for Grants
News
12.21.2006
Four Families, Struggling, Get New Lease on Life with Habitat Homes
News
6.16.2006
FHLBank Pittsburgh Awards $6.58 Million in Grants for 28 Projects with More Than 700 Units of Affordable Housing across Its District
News
3.22.2006
Somali Refugees Begin Learning Financial Skills; Resettled Muslim Minority Gains a New Tool for American Living
News
2.27.2006
Carper, Castle Unveil $6 Million Program for First-Time Homebuyers: 'First Front Door' to Help with Down Payment, Closing Costs in Delaware
Interest-free home loan launched
March 13, 2007
ADELAIDE Bank Ltd has launched a mortgage product that lets borrowers buy a 20 per cent of home without having to make interest payments.
But borrowers will have to give up 40 per cent of any appreciation in the value of their home. The product, patented as an Equity Finance Mortgage (EFM) is being distributed by Adelaide Bank and has been manufactured by Rismark International Ltd, which is 50 per cent owned by Macquarie Bank Ltd. It is a 25 year loan product with no principal monthly repayments required until the loan is repaid by the borrower. Used in conjunction with a traditional home loan, the EFM can be repaid in full by the borrower at any time. If the value of the home decreases, the lender will have to pay 20 per cent of the capital loss. Adelaide Bank chief general manager Stephen Small said he expected the introduction of EFMs to significantly improve housing affordibility. "EFMs can also be used by existing home owners to lower their current monthly mortgage repayments by 20 per cent, reducing their ongoing debt servicing costs,'' Mr Small said.He said EFMs could also allow borrowers to buy homes 25 per cent more expensive they might have been able to afford. Rismark first flagged it was creating the product back in late 2004. Since then it has been raising $1 billion from institutional investors to back the fund. Those investors will share in any capital appreciation in homes not claimed by the borrower. In Australia, the idea for the loans was first raised by the Federal Government's Home Ownership Taskforce in 2003. The man who led the taskforce, Christopher Joye, is now managing director of Rismark.
ADELAIDE Bank Ltd has launched a mortgage product that lets borrowers buy a 20 per cent of home without having to make interest payments.
But borrowers will have to give up 40 per cent of any appreciation in the value of their home. The product, patented as an Equity Finance Mortgage (EFM) is being distributed by Adelaide Bank and has been manufactured by Rismark International Ltd, which is 50 per cent owned by Macquarie Bank Ltd. It is a 25 year loan product with no principal monthly repayments required until the loan is repaid by the borrower. Used in conjunction with a traditional home loan, the EFM can be repaid in full by the borrower at any time. If the value of the home decreases, the lender will have to pay 20 per cent of the capital loss. Adelaide Bank chief general manager Stephen Small said he expected the introduction of EFMs to significantly improve housing affordibility. "EFMs can also be used by existing home owners to lower their current monthly mortgage repayments by 20 per cent, reducing their ongoing debt servicing costs,'' Mr Small said.He said EFMs could also allow borrowers to buy homes 25 per cent more expensive they might have been able to afford. Rismark first flagged it was creating the product back in late 2004. Since then it has been raising $1 billion from institutional investors to back the fund. Those investors will share in any capital appreciation in homes not claimed by the borrower. In Australia, the idea for the loans was first raised by the Federal Government's Home Ownership Taskforce in 2003. The man who led the taskforce, Christopher Joye, is now managing director of Rismark.
Saturday, March 10, 2007
U.S. home-loan refinancing surges
Borrowers rushed to refinance their existing home loans last week as interest rates fell to their lowest point since early December, the Mortgage Bankers Association said today.
The banking trade group's seasonally adjusted index of refinancing applications surged 15% for the week ending March 2. Demand for new home loans, however, was up just 1%.
Borrowers were encouraged by rates on 30-year fixed-rate mortgages that sank last week to 6.04%, down from 6.16%. Fixed 15-year mortgage rates averaged 5.73%, a drop from 5.84%. Rates on one-year adjustable-rate mortgages, or ARMs, decreased to 5.79% from 5.92%.
A year ago, the rate for 30-year fixed mortgages was above 6.3%.
The refinance share of applications increased to 46.1% from 43.2% the previous week, and the ARM share increased to 21.4% from 21.1%.
The mortgage bankers' survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.
More from MSN Money
The banking trade group's seasonally adjusted index of refinancing applications surged 15% for the week ending March 2. Demand for new home loans, however, was up just 1%.
Borrowers were encouraged by rates on 30-year fixed-rate mortgages that sank last week to 6.04%, down from 6.16%. Fixed 15-year mortgage rates averaged 5.73%, a drop from 5.84%. Rates on one-year adjustable-rate mortgages, or ARMs, decreased to 5.79% from 5.92%.
A year ago, the rate for 30-year fixed mortgages was above 6.3%.
The refinance share of applications increased to 46.1% from 43.2% the previous week, and the ARM share increased to 21.4% from 21.1%.
The mortgage bankers' survey covers about 50% of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.
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Safer than stocks Mortgage rates dived last week in large part because panicked investors were looking for safer places to park their money after former Fed Chairman Alan Greenspan spooked the stock market by mentioning the "R" word -- recession. Greenspan said it was "possible" the U.S. could fall into a recession later this year.
"You've got a whole 'flight to quality' thing here, where people are exiting stocks and riskier kinds of issues," says Bob Walters, the chief economist for Quicken Loans, told Bankrate.com. "People are dumping their money somewhere safe."
U.S. Treasurys were the main beneficiary, but mortgage-backed securities benefited greatly as well.
Video on MSN Money
Making sure home improvements pay offUpdating your home can be very expensive. Here are important issues to consider, including the possibility of over-improving.Mortgage bankers believe a steady influx of homeowners will refinance their nontraditional mortgages into something less exotic in 2007. A lot of them will refinance into 30-year fixed-rate mortgages, watching for opportunities to buy when rates take a dip.
Others will get hybrid ARMs, such as the 5/1 ARM, which has a relatively low introductory rate that lasts for five years, then adjusts annually thereafter. Hybrid ARMs are popular among people who expect to sell their houses within a few years.
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