Interest rates are always an issue when purchasing a home. This year, they may be an even bigger issue. “Mortgage brokers are telling buyers that rates are rising, and if they are planning on buying, they need to be doing it as soon as possible before rates go up,” says Linda McCoy, board president of National Association of Mortgage Brokers (NAMB). If you finance the purchase of a property, as opposed to paying for all of it with cash, a mortgage interest rate is what it costs you per month to finance your home/property. “Your interest rate is effectively the lender’s compensation for letting you use its money to purchase your property,” says Aly J. Yale in an article for…
Mortgage rates flattened out after weeks of steadily rising, averaging 3.55% last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.55%. A year ago at this time, the 30-year FRM averaged 2.73%. “Following a month-long rise, mortgage rates effectively stayed flat this week. Recent rate increases have yet to significantly impact purchase demand, as history demonstrates that potential homebuyers who are on the fence will often enter the market at the start of rate increase cycles,” said Sam Khater, Freddie Mac’s Chief Economist. “We do expect rates to continue to increase but at a more gradual pace. Therefore, a fair number of current homeowners could continue to benefit from…
At least one economist says the Federal Reserve is already behind the inflation curve, and the mortgage industry should expect interest rate increases into 2023. “Short-term interest rates will be pushed up by the Federal Reserve [in 2022], as the Fed announced,” writes Dr. Bill Conerly in Forbes. “They will raise rates in quarter-point increments three or four times this year. They will still be behind the curve, most likely, and will raise short rates more aggressively in 2023.” Predicting future Fed moves isn’t easy — not even for the Fed itself. Last summer, the Federal Reserve said it wouldn’t raise rates at all until 2023. That proved to be untrue. In a video news conference after their two-day meeting…
Mortgage loan application volume fell 7.1% from last week, the Mortgage Bankers Association’s (MBA) weekly survey reported. The adjusted Market Composite Index, a measure of mortgage loan application volume, decreased 7.1%. The adjusted purchase index fell 2%, while the unadjusted purchase index fell 5% and was 11% lower YOY. The refinance index fell 13% and was down 53% YOY. Refinances made up 55.8% of total applications. Mortgage rates continue to climb, with the 30-year fixed-rate reaching its highest level since March 2020 last week, 77 basis points above the same time last year. “Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left…
Home prices across the country rose 1.1% month-over-month in November and 17.5% year-over-year, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®). For the nine census divisions, seasonally adjusted monthly house price changes ranged from +0.5 percent in the West North Central division to +1.9 percent in the South Atlantic division. The 12-month changes ranged from +13.3 percent in the West North Central division to +22.8 percent in the Mountain division. “House price levels remained elevated in November, but the data indicate a pivot,” said Will Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “The last four months reflect average gains of 1.0 percentage point, down from the larger prior changes during the…
Big cities could be making a comeback, with more expensive, populated housing markets appearing on the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index. The top 20 emerging markets listed averaged 500,000 residents this quarter, more than 100,000 people more than last quarter. It is a mix of coastal, Southern, and Midwestern markets. Six of the 100 largest U.S. metros made the list: Raleigh, NC; Colorado Springs; North Port, Fla; San Jose, CA.; Cape Coral-Ft. Myers, Fla; and Oxnard-Thousand Oaks, CA. “It could signal a reorientation of the real estate market,” says Realtor.com Chief Economist Danielle Hale. The rankings and their median list price are as follows: Naples, FL ($667,000)North Port, FL ($445,000)Kahului, HI ($937,000)San Luis Obispo, CA ($899,000)San Jose, CA…
Both rent and mortgage payment price growth reached record highs in December, according to a new report from Redfin. Rents jumped to $1,877, 14.1% year-over-year (YOY) and the largest annual jump since at least February 2019, the earliest month in Redfin’s data. The national monthly mortgage payment rose 21.6% YOY, also the largest increase in Redfin’s data history. “The growth in mortgage payments has been driven by both climbing prices and climbing mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “And those rising mortgage costs push more potential homebuyers into renting instead, which pushes up demand and prices for rentals. Mortgage rate increases are accelerating, which will cause both mortgage payments and rent to grow throughout 2022.” The 30-year fixed-rate…
Mortgage lenders should expect a small uptick in home purchases, while refi’s fall off the fiscal cliff. That’s the finding of the latest Freddie Mac’s latest Quarterly Forecast. Housing demand is expected to remain high, with home sales forecast to reach 6.9 million in 2022, then 7 million in 2023. “As mortgage rates rise, we do expect some moderation in housing demand, causing house price growth to temper. However, the combination of a large number of entry-level homebuyers facing a shortage of entry-level inventory of homes for sale should keep the housing market competitive,” said Sam Khater, Freddie Mac’s Chief Economist. “In 2022, we expect purchase originations to grow from $1.9 trillion in 2021 to $2.1 trillion in 2022 while…
As forbearance exits yet again hit an expected mid-month slowdown, resulting in an increase in active plans, according to Black Knight’s blog, Vision. Active forbearance plans rose by 36,000 (4.6%) this past week, driven primarily by a 9.6%, 25,000, increase in FHA/VA plans. Forborne loans held by portfolios and PSL rose by 8,000 (3.2%) while GSE plans rose by 3,000 (1%). The headline is ominous coming a week after new plan starts reached their highest level since an unexpected jump in December. However, new plan starts actually fell by 3% week-over-week. Restart activity paired with an exit “lull” pushed plan entries up. The majority of homeowners in Covid-19 related forbearance have exited their plans as the economy continues its slow…
Mortgage rates continue to rise, up to an average of 3.56% from 3.45%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.56%. A year ago at this time, the 30-year FRM averaged 2.77%. “Mortgage rates moved up again as the 10-year U.S. Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation,” said Sam Khater, Freddie Mac’s Chief Economist. “As a result of higher mortgage rates, purchase demand has modestly waned in advance of the spring homebuying season. However, supply remains near historically tight levels and home prices remain high, keeping the market competitive.” Inventory reached a record low in December, down 19.5%…
