“There is a huge population that have benefitted from adjustable rate mortgages. When the rates adjusted, they adjusted down. Those homeowners have been riding those low, one-year arms. If they start to hear about rates going up, they may come out of the woodwork to lock into fixed rates,” says Strent.

That may be, but 88 percent of loans outstanding today are fixed, according to the Mortgage Bankers Association. Just 12 percent are adjustable rate. Even if rates do not rise any higher than they are today, which they may not, they would have to fall below last year’s lows to see the high refinance volume of 2012 continue in 2013.

(Read More: Link Between Credit and Mortgages: Not What You Think)

“The refi apocalypse is upon us,” says Mark Hanson, a mortgage analyst in Northern California. “The thought is that there are a bunch of homeowners on the fence who haven’t refi’d who will all jump in thinking they will miss out. The theory is 100 percent nonsense. The series will simply plunge. That’s because after 16 months of sub 4 percent rates — and every bank loan officer and mortgage broker doing everything they can after a long mortgage banking income drought that ended with Twist — there is nobody left to refi. In fact, the only reason refi applications stayed flat in Q3 and Q4 was because they passed a new law allowing refinances regardless of the LTV [loan to value]…the HARP unlimited LTV refi.”

While the Federal Reserve does not set mortgage rates, a signal that the economic recovery is improving and even the slightest hint that the Fed could end its purchases of mortgage-backed securities, could push rates slightly higher.

“The Fed likely won’t use its statement to markets to finger a specific date on which QE3 will end, but that won’t stop investors from guessing. If the herd believes that QE3 will terminate within the next 6 months, mortgage rates will likely rise. If QE3 is believed to extend into 2014 and beyond, mortgage rates will likely fall,” writes Dan Green of Waterstone Mortgage in his blog.

(Read more: What to Expect from Interest Rates This Year)

While refinances may suffer under even slightly higher rates, more important to the housing recovery is new mortgages to purchase homes. Purchase applications are still running at half the rate they were in 2007, when last the Dow hit a new high. Small moves in mortgage rates do affect purchasing power, but lending standards are a far bigger driver today. New regulations for lenders and a consolidation of lending overall to the mega-banks are certainly slowing, and in some cases stalling, the process for some would-be buyers.

(Read More: Cities That Are Most Prepared for Retirement)

Article source: http://www.cnbc.com/id/100420382

Sounding the Waters: Is the Bay Area Prepared for Sea Level Rise?

A new documentary attempts to find the answer

Sea level rise will irrevocably change life near the San Francisco Bay. That’s the premise of RISE: Climate Change and Coastal Communities, a documentary that starts airing this week on KQED Public Radio. Producer Claire Schoen sets the stage on a personal note.

Jan Sturmann

Climate scientists predict that sea level rise and extreme weather will cause flooding of San Francisco’s Financial District by 2050.

By Claire Schoen

“Mom, can you please can it with the climate change lecture  – just for once,” my children complained. At ages 22 and 26, my politically correct, Berkeley-raised kids are well educated in all things scientific and political. But… “Enough already,” they cry.

And I confess that their complaint has some validity: I can bring up the topic of climate change in pretty much any conversation.

But really, what other topic is there?

I do care deeply about war, immigration and famine. But all of these are affected by climate change which is a major cause of increasing drought, which in turn will create more and more wars to be fought over less and less arable land, pushing greater numbers of people to become environmental migrants the world over. This is not science fiction. And it is not the future. It is happening right now and it is being meticulously measured. The scariest part is that scientific estimates and predictions of the rate and intensity of climate change continue to be proven too low. It’s all happening bigger and faster than the models have shown. And it will get worse if we don’t radically slow our greenhouse gas emissions worldwide and figure out how to adapt to the impacts of climate change that are already too late to halt.

This past year has certainly been an eye-opener in the U.S., with a record-breaking number of record-breaking weather events:

• The Mississippi and Missouri Rivers both experienced catastrophic floods this year, affecting cities and towns along both waterways. There were evacuations in Memphis. The Corps of Engineers was forced to breach levees on the Mississippi, intentionally flooding one area in order to save a more populated one.
• Chicago has experienced two intense storms classified as 100-year events – in the last three years.
• 14 states are experiencing one of the worst droughts in U.S. history. The entire state of Texas which is now in its 6th year of exceptional drought, has been designated a natural disaster area.
• Tropical storms in Vermont devastated inland towns.

Since when is Vermont located in the tropics?

While no specific weather event can be attributed to climate change, the pattern of increasingly extreme weather is exactly what climate scientists are predicting.

So what does this mean for those of us living around the lovely San Francisco Bay?

We have relentlessly filled in the edges of the Bay – 40% of it – transforming wetlands into real estate and then covering them with homes, shopping malls and industrial parks. Climate change threatens this land, once considered a 100-year flood plain, with flooding every 10 years, every year, perhaps every high tide, as rising sea levels and extreme rain, wind and waves come together to form a perfect storm – again and again.

Upon embarking on the RISE project, my first act was to print out sections of a map of the Bay coastline, provided on the Pacific Institute website. It identifies those areas that are part of the 100 year flood zone. Pieced together, the map covers an entire wall of my studio. I quickly pinpointed my house. Whew – I’m safe.  But not really, as my bank, airport, highway, sewage system and the houses of many of my friends are situated in the flood zone. Truly we are all in this boat, together.

Will Travis, of the Bay Conservation and Development Commission provocatively suggests that what we need to build today are not houses, but campgrounds. Our stay at the edge of the rising tide is a temporary one. Yet, foolish animals that we are, we make big plans, instead, to develop entire new communities, the Redwood City Saltworks and Treasure Island, both sitting at sea level. Today’s sea level.

So, if not campgrounds, then what? The hard truth is that we don’t know what to do. But it’s time to come together to figure it out. To this end, I’m going to keep talking. Cause kids…it’s all about climate change.

Part 1 of RISE, entitled “Sounding the Waters,” airs on KQED 88.5 FM on Thursday, December 8, at 8 pm. Parts 2 and 3 air January 12 and February 9, respectively.

Article source: http://blogs.kqed.org/climatewatch/2011/12/08/sounding-the-waters-is-the-bay-area-prepared-for-sea-level-rise/

One piece of data does not a conclusion make…two pieces get closer. A new report on the apartment market out today from Reis, Inc [ REIS 35.00  +27.165 (+346.71%) ]. shows a big surge in net absorptions, despite very little new supply of apartment units. Apartment vacancies dropped 40 basis points to 6.2 percent, which is a record plunge.

Rents are rising steadily, but the renters keep coming.

“We are now seeing the results of a sharp convergence of positive factors for apartment rentals. First, as labor markets continue to improve and hiring picks up, demand for housing is increasing, particularly in the 20 to 34 year segment of the labor market,” notes Reis’ Victor Canalog. “However, with the single family home sales market still on the ropes, and with deflationary expectations for home prices for at least the coming year, few of these newly hired young workers have the appetite to commit to buying a home.”

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Article source: http://www.cnbc.com/id/42453929?__source=RSS*blog*&par=RSS