WASHINGTON (AP) ? Rates on 30-year mortgages dipped this week to the
lowest level in more than six months.Mortgage giant Freddie Mac said Thursday that 30-year, fixed-rate
mortgages fell to an average 6.31% this week, from 6.40% last week.

By Lou Barnes� Inman News�

Mortgage rates are a hair lower, with the lowest-fee, 30-year stuff approaching 6.75 percent, taken by the 10-year T-note’s decline to 5.05 percent.�

Why the 10-year has fallen toward the bottom of the four-month, 5-5.25 percent band is a matter of sorting dogs that bite from ones that merely bark. Ditto for measuring the odds of falling out of the bottom of that band.�

The 21st century is only five years old, but this week has brought another in an already long list of new-century lessons on the difference between the effective use of force and counter-productive use, whether in the name of self-defense, redress of grievance, or moral imperative.�

Events in and near Palestine this week do present a low-order risk of wider conflict and a threat to oil supplies. However, this latest spasm of righteous retribution among peoples who hate each other but are chained together has had little effect on financial markets, and instead produced widespread disgust at all parties involved — even Arab condemnation of Syria as Hezbollah accelerant.�

As the news has arrived, first from Gaza, now Lebanon, oil prices have moved, but the three bucks from $74 to $77 is hardly a panic, and has alternate explanation. There has been no news-synchronized flight of cash to Treasurys for safety. The stock market is having an awful time, now testing multi-year lows, but has reasons far from the Middle East to do so (the Middle East does make good cover, though).�

The bond market has been moving lower in yield in the two weeks since the Fed’s last meeting on a consistent string of reports of a slowing economy, and rising oil prices. The pattern: the consumer is showing signs of long-expected exhaustion.�

Today we learned that retail sales failed to grow for the third month in a row, down 0.1 percent versus expectations of a gain. Makes sense, as the employment cost index (tipped upside down, a good measure of income from employment) has gained only 2.6 percent in the last year, the lowest gain on record, versus much higher energy and interest costs and the gradual evaporation of the wealth effect from home prices.�

The energy picture is disturbing. A global-security spike in oil prices would soon reverse; and, unfortunately, that’s not what this is. American gasoline consumption is running at the same level as last year, and we are competing with some hefty buyers. China’s oil imports surged 15 percent in the first 90 days of 2006, double the forecast, but consistent with an economy growing almost 10 percent per year, and the dawn of affluence is disproportionately increasing appetites for energy (cars!).�

Confounding everyone from those who would limit fossil-fuel use to prevent climate change to central bankers who would limit inflation, global energy demand continues to grow, firmly linked to GDP growth. Yes, we are more efficient, but as global GDP grows, oil demand grows faster than efficiency. US total consumption of gasoline has been the same since 1984, 55-65 million gallons per day. Automobiles are much more efficient, but there are a hell of a lot more of them, more every day.�

Some in the bond market think this latest rise in oil prices will be the coup de grace for consumers, while others think the inflation hazard will force the Fed to hike one or more times, which in turn will put the final kibosh on consumers. It doesn’t matter which: kibosh is kibosh.�

Stock market types are blaming oil, the Middle East, and North Korea for their evident distress, when a softening economy is a simpler explanation. Bonds have improved tick-for-tick on the stock market sell-off.�

The Fed is at 5.25 percent, and the entire Treasury curve is farther below the Fed than last week. In the seven similar circumstances in the last 40 years, a recession ensued six times, and the one miss was due to a rapid retreat by the Fed.�

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.

451 new franchises sold worldwide in first half of 2006�

Franchise sales for global real estate franchisor RE/MAX International are slightly ahead of projections for 2006, and were 1.8 percent stronger than the same time period in 2005, according to statistics at the end of June.�

A total of 451 new franchises had been sold by mid-year compared to 443 for 2005 which had set the previous record for first half of year sales and year end sales of 1,078, RE/MAX said today.�

Strongest sales numbers from January through June were in Portugal with 24 followed by Turkey at 23. In the United States, the Carolinas region completed 21 sales, while Texas had 18. Both South Africa and Australia also sold 18 new franchises. California/Hawaii closed 17, and both the New York region and Central Atlantic (Virginia, Maryland, West Virginia and Washington, D.C.) regions sold 16.�

“RE/MAX also expanded into Finland, Hungary, Romania and Mozambique this year,” said Peter Gilmour, RE/MAX senior vice president of international franchise sales and brokerage. “Expansion in European markets has been excellent for some time.”�

The RE/MAX franchise network includes more than 6,522 independently owned offices and 119,500 member sales associates.�

Compliments of Inman News July 14, 2006

After three months of declines, the pace of housing construction — measured by the number of new housing starts — rose 5% in May to a 1.957 million-unit annual pace, the Commerce Department reported June 20. (Economists had expected May housing starts to stabilize at a 1.85 million-unit pace.) Permits for future groundbreaking, an indicator of builder confidence, fell by 2.1% to a 1.932 million-unit pace in May, the lowest since November 2003 and the first time since January that total housing permits fell below starts.

A property survey is a map of a property showing where structures, servitudes, easements and boundaries are located. To most buyers, being required by the mortgage company to have an updated survey for closing just seems like a waste of money. And, who wants to spend more money than absolutely necessary?

The New Orleans Metro Real Estate Market is BIG TIME beating the odds after enduring the after effects of the largest natural disaster in the history of the United States. The real estate market is hot and on the upswing. Property values in several affected areas have appreciated an average of 15% from Pre-Katrina levels and market unit sale volumes are up as much as 35% over unit sales in the same period in 2005.

By Andrea Coombes
From Marketwatch Americans might envision the ideal retirement as involving a move to a small, slow-moving town in a warm climate, but most retirees don’t end up relocating after all. In fact, even among those who do make a move, most usually choose to live in a major metropolitan center, loath to give up the cultural attractions and other conveniences that are hard to find in more placid settings. “We have our image of people retiring and they move,” said Elinor Ginzler, director for livable communities at AARP. “That’s the national myth. The reality is … most people don’t move,” she said. “Community is incredibly important to our older citizens. They feel connected to their community.” A quieter part of a major metropolitan area anchored by a large city, often in a warmer climate, is a popular relocating-retiree choice. “Generally, people are moving from metropolitan counties where there are dense populations to other metropolitan counties that are less dense,” said Ron Manheimer, director of the University of North Carolina’s Center for Creative Retirement in Asheville, N.C. Seventy-one percent of people age 60 and over who have relocated to another state in the five years leading up to the 2000 Census settled in metropolitan counties, Manheimer said, citing statistics from a forthcoming book that he edited: the second edition of “Retirement Migration in America,” by Charles Longino. These days, the county’s top county for new retirees is Maricopa County, Ariz., which includes Phoenix. In that five-year period, almost 69,000 people 60 and over settled there. “People want all the amenities of the big city; they just don’t want to live in it,” Manheimer said, noting that the availability of shopping, major airports, cultural attractions and medical services figure into the decision on where to relocate. Going to the sun It’s not surprising that an Arizona county would top the list: Retirees who do relocate often seek warmer climes. Of those 60 and older who moved to a new state in the five years before the turn of the millennium, the top 15 counties nationwide in terms of net migration of those older folks all were in Florida, Arizona and Nevada, according to Longino, also a professor of gerontology at Wake Forest University, in Winston-Salem, N.C. Other retirees choose to go back to their hometowns. In 2000, 17% of Americans over age 60 who had moved across state lines in the previous five years had moved back to their earlier hometowns. Still, most retirees don’t move. Over the five-year span, 76.1% of those 60 and older stayed put. Of the rest, 18.5% moved within their states, 4.6% moved to other states, and 0.8% moved abroad. “Some people think everyone moves in retirement. The vast, vast majority stay put,” Manheimer said. “They have their friends and families, a familiar environment and their favorite places, or they may not be able to afford moving.” Will baby boomers change that? Some surveys find a majority of boomers hope to stay in their homes for as long as possible, while other research shows boomers planning to move when they retire. An AARP survey in 2005 found 89% of people aged 50 or older hoped to stay in their current homes as long as possible. But a poll that year by Harris Interactive for Pulte Homes, the house builder, found 59% of respondents aged 41 to 49 planning to move to a new home upon retirement, with 45% of that group expecting to move out of state. Still, whether their desires will be borne out is uncertain. On the verge Is your own retirement imminent? Manheimer, who runs an annual workshop to help retirees sift through relocation issues, said questions about new locations require careful consideration. Visit the center’s Web site. “It’s not just a matter of moving. It’s all kinds of expectations about starting over a new life, making new friends, getting re-energized, getting into new things they’ve never done before. There’s that, and what are they leaving behind?” he said. To help ensure you make a relocation decision that’s right for you, ask yourself the following questions:•If you want to continue working in some capacity, are jobs available in your desired location?