Seattle Times – Average US rate on 30-year mortgage falls to 3.71 percent

The Associated Press

WASHINGTON (AP) — Average long-term U.S. mortgage rates declined this week after three straight weeks of increases. The decline could be a spur to prospective buyers as the spring home buying season gets started.

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage slipped to 3.71 percent from 3.73 percent last week. The benchmark rate is above the 3.69 percent level it marked a year ago.

The average rate on 15-year fixed-rate mortgages eased to 2.96 percent from 2.99 percent last week.

After the Federal Reserve’s decision last week to keep a key interest rate unchanged in light of global economic pressures, prices of U.S. government bonds have risen sharply. That has pushed down the yields on the bonds, which mortgage rates follow.

The yield on the 10-year Treasury bond stood at 1.87 percent Wednesday, down from 1.91 percent a week earlier. The yield declined further to 1.85 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan also held steady, at 0.4 point.

Rates on adjustable five-year mortgages averaged 2.89 percent this week, down from 2.93 percent last week. The fee remained at 0.5 point.

US new-home sales soar in December

Commerce Department reports on sales of new homes in December.

The Associated Press

WASHINGTON (AP) — Americans rushed to buy new homes in December at the strongest pace in 10 months, with 2015 marking the strongest year for this segment of the housing market since 2008.

The Commerce Department said Wednesday that new-home sales surged 10.8 percent last month to a seasonally adjusted annual rate of 544,000. It was the third consecutive monthly gain since sales collapsed in September. The increase nearly pulled the sales rate even with the level of 545,000 in February 2015 and points to continued momentum for real estate and construction in the opening months of this year.

“This is a promising sign for the housing market as we move into 2016,” said Tian Liu, chief economist at Genworth Mortgage Insurance. “We expect the strong increase in new home sales to continue as the fundamentals in the housing market remain strong and newer vintage homes are in short supply.”

Sales of new homes accelerated sharply in 2015, rising 14.5 percent on the entire year to 501,000. Steady job growth that cut the unemployment rate to a healthy 5 percent has given many homebuyers increased confidence, while relatively low mortgage rates improved affordability. Yet sales of new homes continue to run below the 52-year historic average of 655,200, a sign of the severe hit absorbed by the market after the housing bubble burst.

New-home sales climbed strongly in the Northeast, South and West in December. They were nearly flat in the South — the country’s largest housing market.

The median new-home sales price fell 4.3 percent from a year ago to $288,900. But Ralph McLaughlin, chief economist at the real estate firm Trulia, cautioned that this doesn’t necessarily mean that affordability has improved for first-time buyers.

Only 19 percent of new-home sales were below $200,000 in 2015, a decrease from 23 percent in 2014.

“This is likely due to a combination of low inventory of new starter homes and fewer first-time homebuyers,” McLaughlin said.

Still, lower borrowing costs have helped reduce cost pressures and encourage sales, a trend likely to run through this year.

Mortgage buyer Freddie Mac says the average rate on a 30-year fixed-rate mortgage declined to 3.81 percent last week from 3.92 percent a week earlier. Rates have historically averaged 6 percent, meaning that interest expenses are relatively low for homebuyers.

University Link light-rail service starts March 19

Sound Transit’s 3-mile, $1.8 billion tunnel will connect Husky Stadium to Capitol Hill and Westlake Station and to the existing 16 miles of track to Seattle-Tacoma International Airport.

By Mike Lindblom
Seattle Times transportation reporter
Passenger service on the new University Link light-rail extension will begin March 19.

Sound Transit’s 3-mile, $1.8 billion tunnel will connect Husky Stadium to Capitol Hill and Westlake Station and, equally important, to the existing 16 miles of track stretching south to SeaTac.

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Transit-board Chairman Dow Constantine made the schedule announcement Tuesday at Capitol Hill Station, where workers are finishing the final sign installations; electronic-systems testing continues along the trackway.

Celebrations are planned for opening weekend, though no decision has yet been made whether to offer free rides as the agency did in July 2009, when the initial Westlake-Rainier Valley-Tukwila line opened.

A typical train ride from the south University of Washington campus to downtown will take eight minutes.

These two new stations, plus the Angle Lake park-and-ride station opening this fall in SeaTac, are supposed to add about 45,000 daily passengers by 2021, for a total 80,000 in a 21-mile corridor.

So in terms of public users, this year’s Link launch is arguably the biggest transportation advance in Seattle since 1989, when the Homer Hadley floating bridge was added to the I-90 corridor across Lake Washington.

Mayor Ed Murray said he’s lived on Capitol Hill for 32 years and thinks the tens of thousands of people using the station will help revitalize Broadway’s business and restaurant district. “It’s going to be a major, positive turning point for the densest neighborhood north of San Francisco,” he said.

U-Link construction is currently $150 million under budget and six months ahead of schedule, said agency CEO Peter Rogoff.

Supporters will point to the early opening as an argument for voters to increase their taxes in a Sound Transit 3 expansion measure this November.

However, longtime residents will recall that in the original Sound Move ballot measure of 1996, local politicians pledged train service to the hill and university by 2006. In addition, high construction risks forced the agency to eliminate a First Hill station. The agency instead funded a connecting city streetcar, mixed with slow general traffic, that opened Saturday.

The U-Link transit extension will be followed by the April opening of car traffic over the new floating section of the Highway 520 bridge.