AUSTIN (Austin American-Statesman) – Applications for mortgages have jumped in the past week as the average interest rate on 30-year loans fell below 5 percent for the first time since May, the Mortgage Bankers Association reported Wednesday.

As the average interest rate for 30-year loans fell from 5.08 percent to 4.97 percent in the week ending Sept. 18, the association’s index of mortgage activity rose 12.8 percent and was 14 percent higher than the same week in 2008.

As has been the case for months, most applications continue to be for refinancings, which accounted for almost 64 percent of the total.

The association’s purchase index was up 5.6 percent last week from the previous week.

The average rate for 15-year loans was unchanged at 4.41 percent, and the rate for one-year adjustable loans slipped to 6.52 percent from 6.61 percent the previous week.

SAN ANTONIO (San Antonio Express-News) – The Texas Department of Housing and Community Affairs is no longer accepting applications for short-term loans to homebuyers eligible for the $8,000 federal tax credit.

Because first-time homebuyers generally have enough money to cover their down payment, but not always enough to pay closing costs, the state has been offering 90-day loans since July to help them use the federal tax credit.

Since the department set aside $7.5 million and began offering the loans, it has received 1,225 applications. It stopped accepting loans to ensure it could process them by Dec. 1, the deadline to finalize home purchases while taking advantage of the tax credit.

WASHINGTON (National Association of Home Builders) – Builder confidence in the new single-family home market edged higher for a third consecutive month in September, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released Wednesday.

The HMI rose one point to 19 this month, its highest level since May 2008.

The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”

The index gauging current sales conditions rose two points to 18, while the index gauging traffic of prospective buyers rose one point to 17. Meanwhile, the index gauging sales expectations for the next six months declined one point to 29.

Specifically, the Southern region of the United States posted a two-point gain to 19.

WASHINGTON, D.C. (New York Times) – The Federal Reserve acknowledged on Wednesday that an economic recovery was underway but signaled that it was still much too early to start raising interest rates.

In a statement following a two-day meeting by the Fed’s policy makers, the central bank repeated that it would keep its benchmark overnight interest rate at virtually zero for “an extended period.”

Policy makers also announced that they would extend the Fed’s program to buy up almost $1.5 trillion worth of mortgage-related securities through the end of March.

CARY, N.C. (Local Market Monitor) – Five large Texas cities and ten smaller ones are among the nation’s top markets when it comes to expected home price performance, according to Local Market Monitor’s latest Home Price Forecast.

Among the largest markets — those with populations exceeding 600,000 — Dallas-Plano-Irving, Fort Worth–Arlington, Houston–Sugar Land–Baytown, San Antonio and Wichita Falls filled five spaces on the ten-slot list of cities with the best expected performance in home price over the next year.

The same survey of the smallest U.S. markets revealed ten Texas cities were tops, tied with other cities across the country. These were Abilene, Amarillo, Brownsville-Harlingen, College Station–Bryan, Corpus Christi, Killeen–Temple–Fort Hood, Laredo, Lubbock, Texarkana and Waco.

The study predicts local market behavior over the upcoming 12 months in over 300 markets, identifying those that are stable and have opportunity for growth.

HOUSTON (Houston Chronicle, Associated Press) – The number of housing permits filed in the Houston area last month jumped for the second time this year.

Builders filed 2,428 permits for single-family homes, town homes and condominiums in August — up 7.5 percent from the same month last year.

“It’s good news in the sense that there is some strength returning to the market,” said Research Economist Dr. Jim Gaines of the Real Estate Center at Texas A&M University.

Some builders are scrambling to put more homes on the ground by the end of November when the federal government’s $8,000 tax credit for first-time buyers expires.

Nationally, applications for building permits rose 2.7 percent in August to an annual rate of 579,000 units, slightly below the 580,000-unit level that had been forecast. Permits for single-family homes dipped 0.2 percent but rose for multifamily units by 15.8 percent.

VIDEO OF DOTZOUR’S TAR SPEECH ONLINE

COLLEGE STATION (Real Estate Center) – The full video of Dr. Mark Dotzour’s speech at the Realtors’ convention in Dallas two weeks ago is now available on the Real Estate Center’s website.

An audio-only version of the same speech was posted on the Center’s website last week.

AUSTIN (Austin Business Journal) – The Texas economy is predicted to begin a slow, steady recovery in 2010, according to BBVA Compass’ U.S. Regional Watch third-quarter report.

The report predicts a 1.7 percent increase in the state’s gross domestic product (GDP) in 2010, following a small contraction in 2009. This will be aided in part by a surge in home sales, according to the bank’s economists.

Home sales across Texas are predicted to increase by 4.5 percent in 2010 after declining by 12 percent by the end of 2009.

Though Texas projected a 9.5 percent deficit at the beginning of the year, it is the only state among the seven Sun Belt states covered by BBVA Compass to forecast a balanced budget in 2010.

The report also said that Texas will benefit the most from funding through the federal government stimulus program, considering the amount of money to be received by the state equates to its entire 2009 budget shortfall.

For more on the Texas economy, check out the Real Estate Center’s monthly economic reviews.

HOUSTON (CONTI Organization) – CONTI Organization has purchased its first multifamily property in Houston by purchasing a nonperforming loan on 266 units.

CONTI acquired the note for less than $3.45 million, foreclosing Sept. 1. The seller was a national insurance company.

The property, formerly called Lenox Court Apartments, is on Beechnut St. in southwest Houston.

Renamed Villa Adora Apartments, the property is currently 46 percent occupied.

CONTI plans to invest over $1.4 million in the apartments, which were built in 1980 and feature brick exterior construction with pitched roofs and individual HVAC units.

WEST LAKE VILLAGE, Calif. (J.D. Power and Associates) – Two new studies from J.D. Power and Associates ranked home builders in 24 markets by customer satisfaction and home quality. The studies included the four major Texas metros.

In Austin, David Weekley Homes and Pulte Homes tied for the top builder in overall customer satisfaction. Standard Pacific Homes followed and also ranked the highest in home quality.

In Dallas–Fort Worth, Darling Homes was first in overall customer satisfaction, putting Drees Custom Homes in second and Ashton Woods in third. However, Ashton Woods held the top position for quality.

Village Builders and Ashton Woods tied for overall customer satisfaction in Houston, and were followed by Highland Homes. J. Patrick Homes was tops in quality.

San Antonio’s top builder in overall customer satisfaction and quality was Pulte Homes. KB Home was second in overall customer satisfaction.

Across the 24 markets surveyed, overall customer satisfaction with homebuilders averaged 811 on a 1,000-point scale, up 32 points from 2008.

For information on determining factors for the studies and more comprehensive rankings in each market, visit www.jdpower.com/homes.