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40 MORTGAGE RATES DOWN ON TEPID HOUSING NUMBERS Fixed mortgage rates recently moved down to their lowest levels so far in 2014, according to surveys from Freddie Mac and finance site Bankrate.com. e average interest rate on the 30-year fixed- rate mortgage (FRM) came down to 4.32 percent (0.7 point) for the week ending January 30, Freddie Mac reported in its Primary Mortgage Market Survey. e next week, the average 30- year rate was 4.39 percent. A year ago at this time, the 30-year FRM averaged 3.53 percent. e 15-year FRM for the week ending January 30 averaged 3.4 percent (0.6 point), down from 3.44 percent in the previous survey. In adjustable-rate changes, the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.12 percent (0.5 point), down from 3.15 percent. e one-year ARM increased slightly, meanwhile, rising 1 basis point to 2.55 percent (0.4 point). Frank Nothaft, VP and chief economist for Freddie Mac, points to weaker housing data as the driving force behind that week's rate movements. "Mortgage rates eased somewhat as new home sales fell 7 percent in December to a sea- sonally adjusted pace of 414,000 units, below the consensus," Nothaft said. At the same time, "[t]he S&P/Case-Shiller 20-city composite house price index declined 0.1 percent for the month of November, the first decrease since November 2012," he said. Bankrate's weekly national survey showed similar numbers, with the 30-year fixed dropping to 4.5 percent and the 15-year fixed slipping to 3.56 percent. e 5/1 ARM was also down a few points, falling to 3.37 percent. "Some uneven economic data, particularly disappointment in the December jobs report and durable good orders, along with a bout of stock market volatility, have brought long- term bond yields and mortgage rates lower," Bankrate said in its report. "is decline comes despite the ongoing tapering of bond purchases by the Federal Reserve. Eventually, an improving economy and continued Fed tapering is expected to push mortgage rates higher." Buyer Competition Declines Amid December Freeze December's bitterly cold weather kept home shoppers away from the market, driving competition down further across most markets. According to Redfin's most recent Real- Time Bidding Wars report, 52 percent of offers made by the company's agents faced competition in December, down from 52.8 percent in November and 62.4 percent a year earlier. Market-by-market data paints a revealing picture of the factors that influenced buyer competitiveness over the month. "Between November and December, half of the markets highlighted in this report experienced an uptick in bidding wars, while the other half saw competition fall," explained Redfin analyst Ellen Haberle. "e contrasting bidding war trends likely reflect regional and seasonal factors that impacted the U.S. markets in December, including holidays, snowstorms, and the limited number of homes for sale." Competition plummeted in the Northeast, which experienced "[p]articularly frosty weather" in the year's final month. Instances of competing offers dropped most in Boston and Baltimore, falling 19.7 and 13.5 percentage points, respectively. According to Redfin agent Adam Welling: "Boston had multiple snowstorms during December, which fully shut down home tours at times. For the adventurous homebuyers who braved the arctic-like conditions, the reward was a bit of space in a market that had otherwise been congested and claustrophobic." ough competition in the market was expected to return as December's chill thawed and the new season started up, Haberle said the bounce-back was "likely to be muted somewhat by continued snowy weather across the Midwest and the East Coast during January, which probably will lead many buyers to put their home shopping plans on hold." In January, 58 percent of home offers encountered a competing offer, down from 70 percent the previous year, according to Redfin. KNOW THIS

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