In housing and mortgage news this week:

• A survey of housing prices revealed a sharp drop in year-over-year values as of the end of April
• Existing home sales recorded a mild uptick in May

Despite the bad news/good news nature of the above developments, they are not as contradictory as they might seem. They do, however, have markedly different implications for existing home owners and potential buyers.

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Are you living in Florida and facing foreclosure? According to WWSB ABC 7 Florida foreclosures, were up about 6% last month. United way started up a hotline to help some people save their homes. United Way 2-1-1 of Manasota is a 24-7 hotline that connects callers with Suncoast groups offering assistance. More and more people are needing help so to accommodate this growth, 2-1-1 is expanding its reach.

For more on this:
2-1-1
United Way Announces $3.4 Million Investment in Community
New 2-1-1 number to assist all residents
2-1-1- arrives in Dunn County

A sharp jump in mortgage rates was the week’s most significant development.

• 30-year mortgage rates rose to 6.32%, largely in response to growing inflation fears
• Federal Reserve officials may also respond to the inflation threat, as they’ve begun to hint at possible hikes in the Fed rate later this year
• The grim news on the interest rate front overshadowed what otherwise would have been a bright spot, a bounce back in mortgage application activity

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Recently-released data on home sales sent mixed signals to prospective buyers:

• The S&P/Case-Shiller index of home prices in 20 major markets showed a 14.4% year-over-year decline through the end of March, 2008
• The U.S. Commerce Department reported that the number of new home sales increased 3.3% in the month of April  

While conflicting signals on housing might give home buyers reason to pause, two other developments might spur them to action:

• Revised GDP data strengthened the earlier indication that the U.S. economy avoided slipping into recession in the first quarter of 2008
• Mortgage rates broke out of a month-long holding pattern and showed hints of a possible upward trend

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Few have emerged unscathed from the mortgage mess. But you’d think that if you were renting rather than owning that you could just duck and wait until things settle down, right? It depends. In some communities, high rates of foreclosure have turned so many former homeowners into renters that rents have been pushed up. To make things worse, good tenants have found themselves served with eviction notices when their landlords default on the property and a lender takes possession.

At the same time, lenders have tightened underwriting standards, requiring better credit scores, higher income, and larger down payments before granting mortgages. So those who might have become homeowners as home prices fell are finding that home ownership remains just out of reach. Finally, fear of making a homebuying mistake has kept a sizable portion of the population from buying — pushing rents up.

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