Zillow Launches “BuyAbility” Tool For Home Shoppers

Zillow Home Loans launched a new tool to help buyers gauge whether they can afford a home. Users input their income, credit score, and monthly budget. BuyAbility then offers buyers a real-time estimate of the price and monthly payment on a home they’re considering, personalized to their specific budget. It also gives users an idea of whether they could qualify for a loan on a specific property. The program operates on real-time mortgage rates from Zillow Home Loans, so users can check back regularly to see how their finances stack up as the market changes. “What many people don’t realize is that your mortgage rate is highly dependent on your credit score. The better your credit score, the lower the…

Metros With Fewer Mortgages See Less Rate Lock-In

Inventory is doing best in cities with fewer mortgages and older homeowners, reinforcing the impact of high interest rates on the market. That’s according to a new report from Zillow, which found that metros where more homes are owned outright are seeing the fastest growth in new listings. Pittsburgh, Buffalo, and Cleveland have the highest share of homeowners free from rate lock-in.  Generationally, Baby Boomers are the most likely not to be impacted by mortgage rates when deciding to purchase a home. That’s compared to just 6% of Millennial homeowners. More than 10 million homeowners are mortgage-free and could afford monthly payments if they decided to move today. This demographic skews older and tends to live in more affordable markets,…

Home For The Holidays: Will It Be Better To Buy At Thanksgiving Or Christmas?

By ERIN FLYNN JAY Holiday home shoppers who are sensitive to mortgage interest rates near 8% may resist the idea of buying before Thanksgiving, hoping that Santa Claus brings relief, but is waiting until Christmas the answer this season? On Wednesday, the Federal Reserve held its target range for the federal funds rate at 5.25% to 5.5%, and mortgage rates slipped in anticipation of the news. But Orphe Divounguy, senior macroeconomist at Zillow Home Loans, warned that investors will likely recalculate their inflation forecasts based on employment and wage growth data, “causing large swings in mortgage rates.” That means uncertainty for homebuyers. Matt Ronne, senior loan officer with Motto Mortgage Preferred Brokers in Athens, TN, said that this year, with…

Fed’s Decision To Hold Steady Welcome News In Mortgage World

By PATRICK LAVERY As experts almost unanimously predicted, the Federal Reserve Board on Wednesday held its target range for the federal funds rate at 5.25% to 5.5%, meaning after a year and a half of upheaval, the range will approach the end of 2023 not having budged for more than a third of this year, from the last rate hike at the end of July until at least the Federal Open Market Committee’s next meeting two weeks before Christmas. That may belie the fact that the Fed has raised the rate a total of 5 1/4 percentage points since early 2022, but for now, the stability is welcome news – at least in the housing market. “Mortgage rates fell this…

Mortgage-Free Living: Are Americans Paying Off Their Houses?

By CHUCK GREEN Okay, you’ve undoubtedly heard of those who play with house money. Yeah, that rocks. By the same token, you’re probably similarly familiar with those who don’t owe money on their house. No mortgage. Zippo. That not only rocks – and thunderously, at that — it brings the house down. C’mon, who doesn’t dream of having a mortgage-burning party and being free of that debt? But home mortgage burnings are nearly unheard of in present-day America as the country is now more of a mortgage-ownership society than a home-ownership society. Mortgage balances were at $12.04 trillion at the end of March, according to officials at the Federal Reserve Bank of New York’s Center for Microeconomic Data. The free…

Leaders React To Mortgage Fee Changes As Debate Continues

By CHUCK GREEN Industry leaders and economists are sharing their opinions about changes to fees for loans backed by Fannie Mae and Freddie Mac after reports that homebuyers with good credit scores and substantial down payments will pay more so fees for borrowers limited by income or wealth can be reduced. The changes to the loan-level price adjustment matrix by officials at the Federal Housing Finance Agency went into effect on May 1 and are the target of two bills in Congress. Rep. Stephanie Bice of Oklahoma, vice chairwoman of the Republican Main Street Caucus, introduced the Free Market Mortgage Act. She said the changes will force homebuyers with good credit to pay more for their mortgages to subsidize loans…

Rates Down As Buyers Hit The Spring Market

Homebuyers lucked out again this week as rates continued sliding, falling by nearly twenty basis points. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage rate averaged 6.42%, down from 6.60% the week prior. A year ago at this time, the 30-year FRM averaged 4.42%. The 15-year fixed-rate mortgage dipped from 5.90% to 5.68%. A year ago, it averaged 3.63%. “Mortgage rates continued to slide down as financial market concerns came to the fore over the last two weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “However, on the homebuyer front, the news is more positive with improved purchase demand and stabilizing home prices. If mortgage rates continue to slide over the next few weeks, look for a…

It’s Their Move: What Will The Feds Do About Interest Rates?

By PATRICK LAVERY Speculation about what actions leaders at the Federal Reserve will take at their meeting starting Tuesday has been building for weeks, and opinions over the right course of action are varied. Should they stay the course, steadily raising interest rates to try to continue to curb inflation? Should they be more aggressive? Or should they pull back, letting the United States slide into a recession? These questions have been swirling for months but the sudden collapse of Silicon Valley Bank and New York-based Signature Bank changed the dynamics of the conversations seemingly overnight. Nadia Evangelou, senior economist and director of real estate research for the National Association of Realtors, said prior to the bank collapses, she could…

Q&A About Mortgage Rates With Economist Orphe Divounguy

By KIMBERLEY HAAS With the average mortgage rate hitting over 7% for the first time in 20 years, people are talking about what the 2023 housing market will look like. Freddie Mac reported Thursday that their Primary Mortgage Market Survey found the 30-year fixed-rate mortgage averaged 7.08%, up from 6.94% the week prior. A year ago at this time, the 30-year FRM averaged 3.14%, and in 2021, existing-home sales hit 6.12 million, their highest level since 2006. Zillow’s Home Value and Sales Forecast now calls for 5.2 million existing home sales in 2022, up slightly from September’s expectations for 5.1 million sales following a better-than-expected August. The outlook from there is cloudier and recent declines in mortgage applications and pending home…

Dr. Skylar Olsen Rejoins Zillow

Dr. Skylar Olsen has returned to Zillow as Chief Economist, the company announced. “I’m honored to return to Zillow as chief economist and help home buyers, sellers, and renters across the country better understand their options and how to best navigate what has become an increasingly trying housing market,” Dr. Olsen said. “I truly revel in the opportunity to provide the tools and information to help people make some of the biggest, most impactful decisions of their lives.” Dr. Olsen worked at Zillow from 2012 to 2020, with her most recent position being Senior Principal Economist. She lefts two years ago to found her consultancy, Reimagine Economics, and to serve as head of economics at digital mortgage startup Tomo. She…