Tag Archives: US

US mortgage demand falls for third straight week

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Sep 8, 2011 – PropertyGuru.com.sg

Despite mortgage rates falling to record lows, the demand for home loans in the US continued to fall for the third consecutive week, according to the latest data from the Mortgage Bankers Association (MBA).

The MBA’s seasonally adjusted mortgage applications index, comprising both home purchase and refinancing demand, fell 4.9 percent in the week ending 2 September 2011.

In addition, MBA’s seasonally adjusted refinancing application index also dropped 6.3 percent, while its estimate of loan requests for home acquisitions surged 0.2 percent.

The rates for a 30-year fixed mortgage averaged 4.23 percent, a decrease from 4.32 percent a week ago. It was also the second lowest rate since MBA started its survey almost 22 years ago.

The group also noted that 15-year loan rates averaged 3.41 percent, a decrease from 3.49 percent in the prior week.

“Despite these rates, refinance application volume fell for the third straight week and is more than 35 percent below levels at this time last year,” said Mike Fratantoni, Vice President of Research and Economics at MBA.

“Purchase application volume remains relatively flat at extremely low levels, close to lows last seen in 1996,” he added.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

S’poreans should save for rainy days: Khaw

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Aug 8, 2011 – PropertyGuru.com.sg

Global economic uncertainties have affected Singapore and Singaporeans need to “save for a rainy day”, said National Development Minister Khaw Boon Wan.

Delivering his message yesterday on the sidelines of a national day observance ceremony in Sembawang, the minister called on Singaporeans to be more prudent and reminded them that spending more than one earns is unwise.

He noted that the US and Europe are in debt because they did not save and worse, have overspent.

“You earn S$1,000 but you spend S$1,200, where does the S$200 come from? These are common-sense values but sometimes, people forget,” he said.

In comparison, he said the Japanese are much better in managing debt but their lack of political leadership is their greatest problem.

“For 20 years, no (Japanese) political leader came forward to say the right thing. Everyone tried to be popular, be populist, and say what people like to hear. But what people like to hear, sometimes, may not be the right thing,” he said.

He stressed that political leaders have the responsibility to lead a country but sometimes “get punished by voters for saying the right thing.”

“So, Singaporeans have to decide — do you always want to hear pleasant things even though they are dishonest?”
“Sometimes you get fine weather, sometimes rainy. But if you have always saved for the rainy day, you’ll be pretty steady and safe,” he noted.

His comments followed Deputy Prime Minister Tharman Shanmugaratnam’s warning that it will be tough for the country in the next three to four years, as advanced economies experience slow growth and possible bouts of recession.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

US credit downgrade could adversely affect mortgage market

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Aug 8, 2011 – PropertyGuru.com.sg

The US mortgage market, which has been supported by the government, could be affected by the country’s recent credit downgrade, with the possibility of a hike in borrowing costs for consumers.

Karen Shaw Petrou, Managing Partner of Federal Financial Analytics, said that the “sufficiently perilous” status of the US mortgage market and the downgrade “can do nothing but harm the market”.

Standard & Poor’s cautioned in July that a downgrade of the credit rating will trigger a downgrade of major mortgage-finance players Fannie Mae and Freddie Mac — the firms that were nationalised three years ago and have maintained their triple-A rating since the government guaranteed their debt.

Currently, no one knows the extent of the impact of the downgrade on the mortgage market, even if the market is primarily intertwined with the federal government.

As a direct result of the government’s rating, the securities issued by the government-owned corporation Government National Mortgage Association, or Ginnie Mae, have been given a triple-A rating.

Approximately 90 percent of new mortgages are backed by Freddie, Fannie or Ginnie.

If the company’s ratings are to be downgraded, borrowing costs will increase, which will translate to an increase in mortgage rates or losses to the firms.

The US$4 trillion in mortgage-back securities guaranteed by Fannie and Freddie and held by investors are not rated and traded as safe investments, as they are government assured.

The combination of the downgrade, Euro-zone debt crisis and roller-coaster nature of the US economy could lead to greater volatility in the mortgage market.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

Global property investment up 7%

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Jul 13, 2011 – PropertyGuru.com.sg
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Global direct property investment volumes in the second quarter totalled more than US$101 billion, an increase of seven percent from Q1 2011 and a whopping 47 percent from Q2 2010, according to latest research conducted by Jones Lang LaSalle (JLL).

“The upswing in activity continues, with exceptional gains in North America, which was late to the recovery, driving that region to the top spot in terms of volumes,” said Arthur de Haast, Head of the International Capital Group at JLL.

“Looking ahead, debt concerns in some advanced economies and the risk of overheating in some emerging markets will induce caution and careful asset selection, adding to a natural deceleration in the recovery. Nevertheless, the pipeline of product in the market gives us confidence that full-year volumes will reach our forecast of US$440 billion.”

The highest property investment volumes came from the US, while volumes for the region rose 56 percent from Q1 2011 to US$49 billion.

Meanwhile, the investment volumes in Europe, the Middle East and Asia (EMEA) region, largely stood still in Q2 2011 at US$34 billion.

Asia Pacific saw a 30 percent decline in investment volumes compared with the last quarter but still a decent increase year-on-year to US$18.5 billion. The massive natural disasters in Japan, the region’s largest real estate investment market, worsened a normal seasonal slowdown.

“Our forecast calls for a further US$240 billion to transact in the second half. There are several supportive factors to note: Japan will rebound from March’s natural disasters; there is additional bank product coming up for sale in Europe and the United States, some of it very good quality; and the large emerging markets appear to be absorbing the impact of regulatory measures without a ‘hard landing’,” said Paul Guest, JLL’s Global Capital Markets Research Director.

“Nonetheless, the rate of growth has started to decelerate and this will continue, particularly as central banks continue to tighten around the world.”

To contact the journalist, you may send your message to editor@propertyguru.com.sg