Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real,americast.usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Oct 26 1992 Date: Mon, 26 Oct 92 04:43:26 EST Message-ID: 10-26 0000 DECISIONLINE: Real Estate USA TODAY Update Oct. 26, 1992 Source: USA TODAY:Gannett National Information Network HOMEBUYERS RUSH TO CLOSE: Kicked by rising interest rates, homebuyers are trying to seal their mortgages quickly before rates head any higher. "Lots of undecided people now have decided," says Sam Lyons at Great Western Bank in Chatsworth, Calif., which has experienced a burst of activity the past two weeks. Average rates on 30-year fixed-rate mortgages shot up to 8.23% last week from 8.06% the week before. (For more, see special Rates package below.) RATES SOAR QUICKLY: HSH Associates says that mortgage rates tend to drop very gradually; it often takes months for rates to drop far enough to make a difference. Yet, rates head higher overnight. "Rates do seem to spike quicker than they drop," says Paul Havemann, analyst at HSH. In January, mortgage rates ended a year long drop with the average rate at 8.31%. Two months later it was 9.12%. BOND MARKET AFFECTS MORTGAGES: Mortgage rates have jumped up lately, after a long, slow slide to 20-year lows. The reason for the quick rise: Benchmark 30-year Treasury bonds are near their lowest levels. Most mortgages are packaged into securities that compete with bonds. Anytime the bond market hits such lows, traders are skeptical the level will hold. They need more evidence that they should buy than they do to sell. GROUP AUCTIONS PRE-BUILT HOMES: As home builders continue their search for elusive funding, the nation's top auction-marketing firm has introduced a new program that breaks the construction financing barrier. Kennedy-Wilson Inc.'s program, auction-to-build, allows buyers to review lots, models and plans before bidding, then compete in an open forum for the home of their choice. BUSH SIGNS ORDER: President Bush signed an executive order Friday that would prohibit the use of union-only agreements on federal construction projects. The news was enthusiastically received by Associated Builders and Contractors and its 16,000 member firms which have been challenging the legality of such agreements in several court actions. BROKERS ANNOUNCE NEW CONDUITS: Brokers announced three new real estate mortgage investment conduits Friday, Bloomberg Business News said. PaineWebber priced a $400 million Freddie Mac REMIC backed by 15-year Gold 7%s for December Settlement. First Boston priced a $200 million REMIC backed by 15-year Gold 6.5%s to be settled in November. Prudential Securities announced a $500 million REMIC for December settlement. MGM CAN USE ITS OWN NAME: MGM Grand Inc. Friday was granted the right to name its new entertainment resort the MGM Grand Hotel, Casino & Theme Park in its litigation against Walt Disney Co. Construction on the $1 billion mega-resort began in October 1991 and is scheduled to be finished by early 1994. Walt Disney had sued over the right of MGM Grand to use the MGM name in conjunction with its theme park. GOLDRUSH GETS APPROVAL: The directors of Goldrush Casino & Mining Corp. said Friday that the Historical Architectural Review Committee of Black Hawk, Colo., has voted to accept and approve Goldrush's casino to be constructed in Black Hawk. The committee approved Goldrush's architectural renderings of the planned Phase I - an 80,000-spare-foot casino complex. REALTORS PROPOSE SALES: The Rhode Island Port Authority is expected to hear a proposal Monday by the state Dept. of Economic Development that would allow state realtors to conduct sales and marketing for the Quonset Point:Davisville Industrial Park. The goal: attract new business to the 2,000-acre park, which includes an airport and a shipping port. HOUSING COMPLEX STARTED: A 25-unit, $1.2 million complex is expected to be ready for residents Friday in Anthony, N.M. Ground was broken Friday on another 30-unit low-income housing complex there. The projects are a response to unplanned communities within 150-mile radius of the U.S.-Mexico border that have inadequate facilities, officials said. SPECIAL PACKAGE ON RATES: JUMP WAS A LANDMARK: Last week's jump by average rates on 30-year fixed-rate mortgages was the sharpest weekly increase since mid-January, according to the Federal Home Loan Mortgage Corp. Until two weeks ago, the average 30-year fixed rate was at or below 8%. Rates had fallen all summer. During the decline, lenders were overwhelmed by homeowners who were refinancing at lower rates. BORROWERS ENJOYED LOW RATES: "Rates were down for so long that many borrowers got busy," says Stephen Lind, senior vice president at Northern Trust in Chicago. Now that rates have shot to the highest level in four months, refinancing has dropped from an estimated 60% of new applications to 40%, he says. Applications for refinancing have been cut in half at NationsBanc Mortgage in Charlotte, N.C. LENDERS EXPECT DECREASE: Some lenders say there's not much change in their volume - yet. "Some borrowers are hopeful that this is just a blip in rates and they'll go back down again soon," said Jim Griffiths of Barnett Mortgage Co. in Jacksonville, Fla. The National Association of Realtors estimates that every 1 percentage point increase in mortgage interest rates eliminates 235,000 to 240,000 home sales. (End of package.) Real Estate Editor: Martin Baucom. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM