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Daily Real Estate News  |  March 5, 2008

Article 1) Bank CEO Sees End to Housing Woes

Bank of America’s CEO Ken Lewis recently spoke with the South Florida Sun-Sentinel about the housing market. Here are some of his comments:

Q: When do you expect the nation's housing market to improve?

A: At best, it's a guess, but my anticipation is that by the end of the year, we'll begin to hit a bottom. But we're not going to see improvement for several more quarters. Prices will begin to normalize, but it will take some time and some pain.

Q: How will the mortgage industry be different now that the housing boom has ended?

A: It'll be a much simpler world. We're not going to see as many complex loans because there are no takers. Going forward, you'll see more prudent lending, with borrowers having more down payments. It'll be a more traditional environment than you've seen over the past five or six years.

Q: Will you allow Countrywide [which Bank of America is in the process of acquiring] to continue in the subprime business?

A: They have stopped all subprime loans and have stopped buying subprime loans from brokers. That would be the model under which we would operate.
Source: South Florida Sun-Sentinel, Paul Owers (03/04/2008)

Article 2) Legendary Builder Says Slump is Near End 
Florida home builder Arthur Rutenberg, 80, says you can take it to the bank: The home-building bust is at or near bottom.

"Anyone who buys a home right now will say in five years, 'I'm glad we bought when we did,' " Rutenberg says.

Still active in the business, the developer spoke while inspecting a newly completed $1.5 million Arthur Rutenberg Homes luxury model in Orlando. Rutenberg remains chairman of Arthur Rutenberg Homes Inc., which has 32 franchised home building operations in Florida, Georgia, and South Carolina.

Rutenberg said the current building bust is especially deep because the run-up in prices and sales that preceded it was so robust. As a result, it takes a little longer to get prices and annual growth "back to a long-term trend line," he says

Rutenberg franchises closed last year on 726 homes valued at about $400 million, down from a peak of more than $600 million in 2005.
Source: Orlando Sentinel, Jerry W. Jackson (03/04/2008)

Article 3) Mortgage Applications Rise Slightly
Mortgage applications rose 3 percent last week to 684.9, according to the Mortgage Bankers Association’s weekly seasonally adjusted index.

On an unadjusted basis, the index increased 15.3 percent compared with the previous week, which was cut short because of President’s Day. It was up 1.1 percent compared with the same week a year ago.

The refinance share of mortgage activity increased to 52.4 percent of total applications from 52 percent the previous week.

Mortgage rates were down compared to the previous week.

• 30-year fixed-rate mortgages decreased to 5.98 percent from 6.27 percent.
• 15-year fixed-rate mortgages decreased to 5.26 percent from 5.77 percent.
• 1-year ARMs decreased to 5.83 percent from 5.84 percent.

Source: Mortgage Bankers Association (03/05/2008)