WASHINGTON – Demand for big-ticket manufactured goods and new home sales both were better than expected in March, raising hopes that the long slides in manufacturing and housing are slowly coming to an end.

The Commerce Department said Friday that orders for durable goods dropped 0.8 percent last month, about half the 1.5 percent decline that economists expected. A rise in orders for commercial and military aircraft helped cushion weakness elsewhere.

The small drop followed a 2.1 percent increase in orders in February. That was the first gain after six straight monthly declines.

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The Valley's new home market showed more promise last month as both sales and construction permits increased, according to the latest Phoenix Housing Market Letter by analyst RL Brown.

New home sales totaled 912 last month, up from 713 in February but still down from 1,890 in March 2008. Sales had fallen slightly from January to February.

Most of the sales were of inventory or speculative homes - those built without having a contracted buyer - helping to diminish the amount of inventory homes on the market, Brown said. Sales were up despite "really stiff" competition from bank-owned homes, he said.

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Foreclosures dropped sharply last month across the Valley as lenders backed off in anticipation of new federal loan modification and refinancing programs, according to the latest existing home sales report from Arizona State University's Realty Studies Department.

Foreclosures represented 31 percent of existing home transactions last month, down from 51 percent in February. Foreclosures will remain a primary concern in the coming months with the end of many lender hiatus programs and the weak job market, said Jay Butler, ASU realty studies director.

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In March, there were 200 more new-homes sales across the Valley than the month before. That may not sound like much, but it's significant in the current slowdown.

Last month, 912 new homes sold across metropolitan Phoenix, a 28 percent increase from February, according to RL Brown's latest "Phoenix Housing Market Letter."

Even better for the market is that many of the recently sold new homes were built last year or the year before, either speculatively or for buyers who pulled out of deals. Depleting the inventory of built-but-unsold homes will help the area market rebound.

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Spring brings little sprouts of recovery for the Valley’s housing market. Arizona was one of the first states to feel the housing market crash and now appears to be one of the first heading toward recovery.

The front page of Friday’s USA Today shows Arizona’s housing slump will begin to turn this year. New research from the University of Utah shows the glut of homes for sale here will sell off enough to bring back the demand for new home construction.

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 Banking giant gives nod to legislation that would allow judges to alter mortgages for homeowners who have filed for bankruptcy.

NEW YORK (CNNMoney.com) -- Citigroup reached an agreement with Democratic lawmakers Thursday on legislation that would allow judges to reduce mortgage debt for individuals who have filed for bankruptcy.

Sen. Dick Durbin of Illinois, the bill's architect, said he hoped the participation of Citigroup would entice other mortgage lenders to sign onto the program.

"I hope other institutions will follow suit," he said. Durbin appeared at a press conference along with fellow sponsors of the bill, Sen. Christopher Dodd of Connecticut and Sen. Charles Schumer of New York.

Until recently, members of the banking industry, including Citigroup (C (C, Fortune 500), Fortune 500), as well as other housing-related groups like the National Association of Realtors, have criticized the notion of allowing the courts to have a say over their mortgage portfolios.


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Dec. 24 (Bloomberg) -- Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren’t getting much relief from lower borrowing costs.

The average 30-year fixed rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month, according to financial data firm BanxQuote.

Banks remain reluctant to lend after recording $678 billion in mortgage-related losses and writedowns in the past year and as house prices plunge. The collapse of the private mortgage securities market means lenders find there’s little demand for jumbo loans they want to sell. If low conventional rates entice enough homeowners to refinance, jumbo home loans may become more affordable as loan payoffs add liquidity to the banking system, said Keith Gumbinger, vice president of mortgage-research firm HSH Associates Inc. in Pompton Plains, New Jersey.

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Spike in refinancing following Fed moves leads to nearly 50% jump in Mortgage Bankers' index; home purchases also up.

NEW YORK (CNNMoney.com) -- Near record low mortgage rates sent mortgage applications shooting higher last week, especially for refinances, according to an industry report.
The Mortgage Bankers Association reported that its overall Market Composite Index, a measure of mortgage loan application volume, shot up 48% on a seasonally adjusted basis for the week ending Dec. 19.

That was driven by a 62.6% leap in the group's Refinance Index. But the Conventional Purchase Index also increased 17.7%. The only component of the overall index to fall was the Government Purchase Index, which largely tracks FHA loans. It slipped 3.4%

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Ben Bernanke & Co. cite the weakness in the economy and the reduced inflation threat as justification to cut rates to a record low range of 0% to 0.25%.

NEW YORK (CNNMoney.com) -- In its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%, and said it expects to keep rates near that unprecedented low level for some time to come.

The central bank typically sets a specific target for its federal funds rate instead of a range. The rate had previously been at 1% and this marks the first time the Fed has cut rates below 1%. Most investors were expecting the Fed to cut rates to either 0.25% or 0.5%.

The federal funds rate is an overnight lending rate used as a benchmark to set rates for a variety of loans, including adjustable rate mortgages, credit cards, home equity lines of credit and business loans. This marks the tenth time it has cut rates in the last 15 months.

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Rates on a 30-year fixed mortgage dropped to 5.19% this week, after the Fed slashed interest rates to historic lows.

NEW YORK (CNNMoney.com) -- Mortgage rates fell this week, with the 30-year fixed mortgage sinking to its lowest rate in 37 years as the Federal Reserve cut interest rates to historic lows.

Government-sponsored mortgage lender Freddie Mac (FRE, Fortune 500) said Thursday that fixed rates on 30-year mortgages averaged 5.19% for the week ending Dec. 18. That's down from 5.47% last week and below the year-ago rate of 6.14%.

"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac vice president and chief economist.

"The decline was supported by the Federal Reserve announcement on December 16th, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."

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Materials costs are plunging, and contractors are begging for work. Suddenly that long-postponed remodel is looking like a smart idea.

(Money Magazine) -- If you're struggling to see a silver lining in the beaten-down real estate market, consider this one: It may be a rotten moment to sell your house, but if you've postponed a much needed renovation project on your home - replacing a rotting deck, repairing a leaky roof or updating an antiquated bathroom - now just might be the best time in years to tackle that task.

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Buying a home might be out right now, but you might have the cash to make improvements to the place you have.

Major upgrades requiring a contractor might give you pause, but a simple faucet upgrade, paint job or switch to energy-efficient lighting probably is manageable Ace Hardware, a fixture in nearly every neighborhood, is benefiting from that trend.

As home construction has declined, so have sales at big-box home-improvement stores.
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But Ace Hardware Corp., with its smaller-store format and focus on building long-term relationships with customers who do their own home repairs, reported revenues that were even with the year before in its most recent quarterly earnings statement. And Ace's quarterly net income was up 13.2 percent, to $33.4 million.


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The Federal Reserve's attempt to stabilize the housing market set off a chain reaction across the U.S. on Tuesday, dropping interest rates and quickly spurring a burst of refinancing activity by borrowers eager to lower their mortgage costs.
Some brokers said it was the most activity they've seen in at least one year, although there was no way to determine the volume of refinancing.

At Bank of America Corp., call volume was roughly twice what was expected at call centers and via the Internet, said Matt Vernon, national sales executive.

"It's the folks who have been sitting on the sideline. They're jumping in with this news."

Rates on 30-year fixed-rate mortgages dropped by roughly half a percentage point to about 5.5%, for borrowers with good credit scores and substantial equity in their homes, say mortgage brokers and lenders.

While the initial flurry of calls came from people seeking to refinance, economists predicted lower rates also will spur some home buying among bargain-seekers. The surge in refinancing will help the overall economy by putting more cash in consumers' pockets and reducing the pressure on some borrowers struggling to make payments.

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By Jim Christie
SAN FRANCISCO (Reuters) - California Democrats who control the state Assembly said on Tuesday they would push for a 120-day moratorium on foreclosures after mortgage default notices have been filed, compared with a 90-day stay proposed by Gov. Arnold Schwarzenegger.
The rival plans will be debated during special session of the state legislature that Schwarzenegger called last week to tackle a state budget shortfall that has widened to more than $11 billion because revenues have plunged amid recent financial market turmoil and the state's housing slump.
Some areas of California, the most populous U.S. state, are among the hardest hit in the nation by foreclosures stemming from risky mortgages such as subprime loans taken on during the state's booming homes market earlier this decade.

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Paulson says Treasury will broaden reach to include non-bank financial firms and seek out private capital to match U.S. funds.

NEW YORK(CNNMoney.com) -- Treasury Secretary Henry Paulson said Wednesday the government would broaden the reach of the $700 billion bailout plan to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.

In this second stage of the bailout, officials also hope to attract private capital, possibly through matching investments, to give the government's injections more heft.

Paulson also said the government is no longer planning to buy troubled mortgage assets, the original goal of the plan. And officials are continuing to examine ways to help homeowners and slow the tide of foreclosures.

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A new program aimed at homeowners who haven't defaulted yet could help 130,000 mortgage borrowers stay in their homes.

NEW YORK (CNNMoney.com) -- Citigroup says it will expand its foreclosure prevention efforts and try to keep 130,000 troubled borrowers with $20 billion in mortgages in their homes.

The news follows similar initiatives announced earlier this year by IndyMac Bank, which was seized by the Federal Deposit Insurance Corp. last summer, as well as Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) each of which heralded enhanced housing rescue efforts.

Banks are undoubtedly feeling pressured to be more aggressive in aiding home owners, given how many billions of taxpayer dollars have poured into the industry to stem the credit crisis.

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NEW YORK (Reuters) - Los Angeles home foreclosures fell sharply in October from September as a new California law came into effect, while the number of foreclosures in Miami continued to grow at a slower rate, real estate research website PropertyShark.com said on Tuesday.
The number of newly scheduled auctions on foreclosed properties in Los Angeles county fell 51 percent, the greatest monthly decline in two years.
The law, passed on July 8, requires lenders to contact homeowners and explore options to avoid foreclosure before initiating the process. Some sections of the law became effective on Sept 8.


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Stumble It!

By JENNIFER LOVEN, AP White House Correspondent Jennifer Loven, Ap White House Correspondent

WASHINGTON – An impatient White House prodded banks and other financial companies Tuesday to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans. Wall Street soared nearly 900 points on bargain-hunting and hopes of a hefty interest rate cut by the Federal Reserve.

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(CNN) -- Tracy Orr sat in the back of the room and prepared to watch her foreclosed home go up for auction this past Saturday. That's when a pesky stranger sat down beside her and struck up a conversation.

Within moments, the four-bedroom, two-bath home in Pottsboro, Texas, went up for sale. People up front began casting their bids. The home that Orr purchased in September 2004 was slipping away.

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