Landlords See a Jump in Vacancy Rates Even as Rents Drop

More Apartment Owners Are Pushed Into Delinquency Amid Renter Job Losses;

The nation's apartment market deteriorated in the first quarter as rising unemployment dashed landlords' hopes that the housing downturn would create a soft landing by bringing former homeowners back as renters.

The vacancy rate for the top 79 U.S. markets jumped to an average 7.2%, a full percentage point increase over the past two quarters and the highest level since the first quarter of 2004, according to statistics from Reis Inc., a New York real-estate-research firm.
The jump in vacancies came even as landlords reduced rents. Asking rents, which exclude concessions and are often the starting point for rent negotiations

Mortgage Refinancings Seen Rising

Mortgage rates fall, set yet another record
30-year-fixed average at 4.75 percent, falling from 4.85 last week

The recent drop in interest rates will prompt about 18% of all U.S. households with mortgages to refinance this year, Jay Brinkmann, chief economist of the Mortgage Bankers Association, said in an interview. Mr. Brinkmann said Tuesday that rates on 30-year fixed-rate mortgages for borrowers with strong credit records are likely to be in a range of roughly 4.6% to 4.75% at least through the summer. In recent days, those rates have hovered between about 4.75% and 5%, down from 6% in mid-November, just before the Federal Reserve embarked on a plan to drive mortgage rates lower. Mortgage rates for much of this year have been the lowest since the 1950s.For a person with a $230,000 mortgage, refinancing to a 4.75% rate from 6% would yield savings of about $180 a month, Mr. Brinkmann said. But the best rates aren't available to all borrowers; higher costs apply to those with credit scores that are average or below, and those with high debts in relation to home values.

Mr. Brinkmann estimated that 9.5 million households will refinance their mortgages this year. The total number of households with mortgages is about 52 million.
As a result of that refinancing surge, new U.S. first-lien home-mortgage loans granted this year will surge to $2.78 trillion, up 72% from 2008's depressed level, the Mortgage Bankers Association said in a statement. The expected 2009 total includes refinancings of $1.96 trillion and home-purchase loans of $821 billion. The Federal Reserve last week promised to spend as much as $1.25 trillion to buy mortgage securities in 2009. The Fed also is buying long-term Treasury bonds to push down rates on those securities, whose pricing affects mortgage rates.
The Fed's purchases of mortgage securities provide funds for banks to lend to homeowners. But Mr. Brinkmann said the reaction of other investors in such securities will be important in determining how far mortgage rates drop and how long they stay low.

PRESIDENT OBAMA MEETS THE QUEEN!!

LONDON – President Barack Obama has arrived at Buckingham Palace for a private meeting with Queen Elizabeth II. Several thousand well-wishers crowded the traffic circle in front of the gated palace on Wednesday to cheer and wave as the limousine carrying Obama and first lady Michelle Obama rolled past.
On the eve of a global economic summit, Obama promised world leaders he would listen, not lecture, as they seek a common fix to the financial crisis. "We can only meet this challenge together," he said Wednesday as the U.S. and Russia spoke on the summit sidelines about nuclear warhead reduction. The flurry of diplomacy came as Obama stepped on the world stage for the first time as president, aiming to shore up both America's economy and its reputation across the globe. He met with British Prime Minister Gordon Brown, Russian President Dmitry Medvedev and Chinese President Hu Jintao — and promptly accepted invitations to visit Russia in July and China sometime in the second half of the year. Thousands of protesters converged on central London to rally against the economic summit. In the most dominant development, Obama and Medvedev announced talks to limit the number of nuclear warheads, the first major negotiations in years over what Obama called the "gravest threat to humanity." Meanwhile, speaking directly to anxious families back home, Obama sought to restore consumer confidence and encourage people to think about spending now to help their future. "Basing decisions around fear is not the right way to go," he said. "We are going to get through this difficult time."


The president also disputed criticism that the United States was feuding with other nations about the need to pump more money into economic stimulus policies.
"I am absolutely confident that this meeting will reflect enormous consensus about the need to work in concert to deal with these problems," Obama said. Obama prodded nations to spur growth and work together on regulatory reform, and not fall into the kind of protectionism and other mistakes that helped fuel the Great Depression. "That is a mistake that we cannot afford to repeat," Obama said during a news conference with Brown, the British leader.
Brown, too, sought to play up consensus. "We are within a few hours, I think, of agreeing a global plan for economic recovery and reform," he said. On Russia, the White House said the U.S. and its former Cold War foe are determined to reduce the number of nuclear warheads but have not settled on a specific number. "I think people on both sides of the Atlantic understand that as much as the constant cloud — the threat of nuclear warfare — has receded since the Cold War, that the presence of these deadly weapons, their proliferation, the possibility of them finding their way into the hands of terrorists continues to be the gravest threat to humanity," Obama said. The discussion centers on a replacement of the dying 1991 Strategic Arms Reduction Treaty, which limited the world's two largest nuclear arsenals. START expires Dec. 5. Both nations say they want to have a new agreement in place before then. Earlier Wednesday, Obama acknowledged strained relations between the two nations but says the time has come to emphasize areas where they can work together. Obama also gave focus to China.

The White House said Obama and Hu agreed to "intensify coordination and cooperation on global economic and financial issues." As economic leaders, the United States and China say they want to work together to address the economic crisis. Officials in both Russia and China have called for a new global currency to end the dollar's dominance, although it's unlikely that the idea will gain immediate traction. Obama's talks with Hu were sure to address Beijing's concerns about the safety of its position as Washington's biggest foreign creditor, with about $1 trillion in U.S. government debt. For the U.S., there are fears that any Chinese flight away from those investments would erode the U.S. ability to spend more on recession-fighting.
The G-20 meetings open with a working dinner Wednesday night and continue throughout Thursday. Before the summit even opened, divisions emerged among nations' leaders.
French President Nicolas Sarkozy has expressed dissatisfaction with how the summit has been shaping up and warned he would rather risk a public dispute than accept a vague consensus or a "false compromise." Brown said he was confident Sarkozy would still be at the table when the dinner was complete.

In London, Obama is also meeting with Brown's main rival — David Cameron, the leader of Britain's opposition Conservative Party.