This week's wrap-up begins with the survey of average mortgage interest rates across the country.  The average 30 year fixed mortgage dipped back below 5% to end the week at 4.97% with an average of 0.7 points down.  The 15 year fixed mortgage also fell a bit to 4.34% with 0.6 points down.  According to the Mortgage Bankers Association, 69.7% of all mortgage activity is refinance of existing sales.    To check out the latest listings that have come on the market, check out Springshomes.com

Locally, the real estate market numbers ending January 31, show that the overall market has 6 months of inventory.  During the month of January...

there were 464 closings reported through the Pikes Peak MLS.  One year ago, there were 413 closings and two years ago there were 534.  While this may look like a major decline, it isn't when looking at the numbers from percent of listings to closings.  These numbers are between 8% and 11%; increasing over the last three years.   As of January 31, there were 4,119 active listings in the PPMLS with a median list price of $181,000.  The median list price in 2009 was $179,900 and for 2008 was $204,900. The median list price is a better gauge than average because it really gets to the heart of the market's activity. 

Two areas really stand out in terms of improvement and transition; Tri-Lakes and Southwest. 

The Tri-Lakes have 295 active listings with 29 reported closings.  This is a nearly 5 fold increase in closings over last year.  The median sales price was $360,000 compared to $270,500 in 2009 and $318,000.  This particular market has regained all ground lost over the last two years.  The days on market is down to 109 days.

The Southwest area demonstrates an interesting trend in a year over year comparison; an increasing median sales price and a declining average sales price.  The average sales price increased for a period in 2009 but has steadily declined.  The median has varied but generally increasing.  The numbers demonstrate what we already knew intuitively: homes priced in the middle to upper price ranges are selling.  Financing for jumbos is available to some but can be an uncertain risk due to double income households fearing for jobs.  For complete market stats, visit Springshomes.com.

On January 1, new accounting rules went into effect which allow Fannie Mae and Freddie Mac to accelerate the purchase of delinquent home loans guaranteed by the agencies.  The particular group of loans to be targeted were packaged into mortgage backed securities held primarily by pension and insurance companies.   Historically, when guaranteed mortgages were delinquent, the agencies would simply pay the principal and interest note.  A potential write down from a buyout would be negative for investors so the ideal situation was for Fannie or Freddie to pay the note.  At present, there are so many delinquent mortgages that neither  the investment groups or the government agencies can sustain the historical approach.  It is anticipated that all told, this will free up $100 billion of MBS investment funds which can be redirected back towards the newly packaged securities as a result of this buyout.  The negative will be upon MBS investors who typically expect a higher investment return.

Lennar Corp., a national homebuilder, boosted its stock this week by becoming a 40% stakeholder in a portfolio of delinquent commercial and residential real estate loan with a collective unpaid balance of $3 billion.  These holdings come from 22 failed bank receiverships.  The remaining 60% of the portfolio is  held by  the FDIC.   Lennar has a history of making a successful run at this in the real estate downturn of the 1990's.  Stuart Miller, Chief Executive for Lennar, told the media that this was a large part of their business model fro profitability in previous downturns.  The controversy surrounds the FDIC financing of the deal; $627 million at zero percent interest for seven years.  Lennar does have strong cash reserves but critics find this type of financing deal by the FDIC very dangerous wondering what risk there really is to Lennar.