Mortgage rates increased for a third consecutive week, pushing averages closer to 7% and adding pressure to buyers.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.96%, up from 6.90%. A year ago at this time, the 30-year FRM averaged 5.22%.
The 15-year fixed-rate mortgage also increased, up to 6.34% from 6.25%. A year ago, it averaged 4.59%.
“There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again,” said Sam Khater, Freddie Mac’s Chief Economist.“However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”
Demand has been sluggish…
As inflation slowly cools, consumers are feeling a lot more secure in their personal finances. But when it comes to homebuying, they’re still in the dumps.
Leaders at Fannie Mae said the Home Purchase Sentiment Index increased by 4 points YOY in July as consumers responded positively to the job security and mortgage rate components.
When asked to describe their feeling about the housing market, consumers became much more pessimistic, however, with 82% reporting that it’s a “bad time to buy” a home. This is a record high, up from 78% in June and above the last all-time high in October 2022.
“While consumers are reporting confidence in the components related to their personal financial situations, it’s unlikely we’ll see…
By KIMBERLEY HAAS
Fannie Mae and Freddie Mac were affected this week after Fitch Ratings downgraded the country’s credit rating.
On Tuesday, leaders at Fitch issued a press release saying they had downgraded the United States of America’s Long-Term Foreign-Currency Issuer Default Rating from AAA to AA+.
Fitch is one of three nationally recognized statistical ratings organizations. The other two are Moody’s Investors Service and S&P Global Ratings.
Expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance were cited as reasons for the downgrade.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike…
By Taylor Stork, President CHLA and EVP, COO Developer’s Mortgage Company and Kelly Welch, Executive Vice President, Equity Resources, Inc.
When a consumer goes into the market to obtain a mortgage loan, they enjoy consumer protections that are arguably more extensive and specific than any other financial product.
A few examples: TRID requirements for disclosures which hold lenders to early fee estimates, RESPA prohibitions against charging for services not provided, and LO Comp prohibitions on loan originators steering loans or varying their fee based on how much they think the borrower would pay.
The same is true for the servicing of mortgage loans. Servicers must follow detailed rules, and for the two-thirds of loans that are “federal agency loans” (FHA,…
By PATRICK LAVERY
When last we heard from the Federal Reserve on interest rates, on June 14, the Federal Open Market Committee agreed not to raise the target range for the federal funds rate for the first time in more than a year.
With the Fed’s next meeting now less than a week away, could Chairman Jerome Powell be preparing to announce one of the hikes that he said in June might still be remaining for this year? Or will the FOMC stick to a holding pattern?
And how are those developments going to impact a U.S. housing market that Powell has continuously characterized as sluggish throughout 2023?
It is predicted that the central bank will deliver a quarter of…
Mortgage rates retreated last week, dropping more than ten basis points in a one-week period.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.78%, down from 6.96% the week prior. A year ago at this time, the 30-year FRM averaged 5.54%.
The 15-year fixed-rate mortgage reversed course as well, down a whopping 24 bps from 6.30% to 6.06%. A year ago, it averaged 4.75%.
“As inflation slows, mortgage rates decreased this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Still, the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates.”
Existing-home sales saw their most sluggish levels in 14 years in June.
At the…
Recession is still on the horizon, but housing may support the economy moving through it, according to Fannie Mae’s Economic and Strategic Research Group.
In recent commentary, the group noted that mixed economic data has muddied the waters on the economy’s strength. But recession “remains the most likely outcome” of tightening monetary policy and late-stage business cycle dynamics.
Inflation has improved thanks to slowing domestic and global economic growth, but core inflation is still sticky.
“Lessons learned from the inflationary era of the 1970-80s … lead the ESR Group to expect that the Fed will maintain its restrictive monetary policy stance until it is abundantly clear that inflation pressures from the labor market have eased,” the group stated.
But that…
By CHUCK GREEN
To home sellers who agonizingly watched the prices of their abodes recede recently, leaving a nasty gash in profits, there’s little to say but “ouch.”
Want a touch of solace? Apparently, the waters are rippling with plenty of others in the same predicament.
A first quarter 2023 U.S. Home Sales Report released by ATTOM showed that on median-priced single-family home and condo sales across the country, profit margins dipped to 44.2%, sagging from 48.7% in the fourth quarter of last year.
A silver lining is that the typical investment return stayed relatively high. In fact, it was nearly double where it was four years ago. From the peak of 56.1% in the second quarter last year, the…
By KIMBERLEY HAAS
A Fannie Mae program designed to help build the credit scores of renters is finding success.
Launched in September, the Multifamily Positive Rent Payment Reporting pilot program allows property owners to share timely rent payment data with the three major credit bureaus. The goal is to accelerate the adoption of rent payment reporting so renters and prospective homebuyers with no or little credit can establish or improve their credit history.
Lenders can incorporate that data when evaluating potential homebuyers.
Leaders at Fannie Mae report that more than 263,000 rental units have been onboarded as of April 30. Over 10,000 renters in properties participating in the program have established credit for the first time and 58% of residents…
The Mortgage Bankers Association has once again adjusted its commercial and multifamily lending expectations downward as economic uncertainty continues to constrain the market.
MBA’s latest forecast shows commercial and multifamily borrowing falling 20% in 2023 to $654 billion, down from $816 billion in 2022.
This is a $9 billion reduction from its January prediction.
Multifamily on its own accounts for a 14% drop, slipping from $437 billion in 2022 to $375 billion this year. Apartment investment sales declined at the end of 2022 in response to the Central Bank raising interest rates.
“Higher interest rates, uncertainty about property values, and questions about the outlook for the cash flows of some properties led to a slowdown in commercial real estate transactions…
