Rates Average Close To 7% As Market Prepares For Fall Slowdown

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…

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…

Home Prices Surged In May

Competition for limited inventory has led to surprisingly hot home prices this spring season. Zillow’s latest market report found that home values grew 1.4% between April and May, the highest since June 2022. This is cooler growth than the previous two springs, but more than in 2018 or 2019. The typical home is valued at $346,856, up 0.9% YOY and 3.4% from January’s low point. Buyers are desperate to make this market work for them despite its challenges, with sales up nearly 10% from April to May. At the same time, inventory reached a record low. “Many homeowners are still opting not to sell and give up historically low mortgage rates. But those who do have been rewarded with bidding…

What Happens To Housing If The U.S. Defaults On Its Debts?

As the country approaches D-Day for defaulting on its debts, analysts are breaking down the impact of such a scenario on the economy. The Treasury Department said in January that the U.S. was close to its $31.4 trillion borrowing limit. As a result, it announced “extraordinary measures” to keep the government’s funding above water through spring. Treasury Secretary Janet Yellen and other experts are now saying the U.S. could default on its debt as early as June in a worst-case scenario. Dramatic as the news may be, it’s highly unlikely that Congress would actually allow a breach of the debt ceiling. “While we have a highly polarized Congress negotiating, it isn’t in either party’s interest to let a default happen,”…

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…

Prices Climb In Q1 As Demand For Budget-Friendly Homes Heats Up

Home sale prices went up last quarter due to high competition in budget-friendly markets. The National Association of Realtors’ latest quarterly report found that single-family existing-home sales prices increased in 152 of 221 metros — about 70% — in Q1 2023.  The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $1,859, up 33% YOY. The divide in demand between affordable and expensive markets is the main factor in these numbers. High-end markets with the most expensive homes are seeing declines, while cheaper areas are seeing intense competition for the few affordable homes for sale, pushing prices up. “Generally speaking, home prices are lower in expensive markets and higher in affordable markets, implying greater…

Zoomers Prioritize Pet-Friendliness Over Their Romantic Partners When Choosing A Home

Zoomers are approaching homeownership from a different perspective than past generations, focusing more on their pets than their romantic partners. A recent Zillow survey found that Gen Z adults consider a fenced backyard more essential than a double sink in the primary bathroom, a home office for their partner, or a kids’ playroom. When asked whether it was more important to have a pet-friendly home or a kid-friendly home, features, 10% more Zoomers chose the former. At the same time, almost a full quarter of Gen Z pet owners would move if their home wasn’t working for their pets. Only 12% said the same about their partners’ preferences. “Young adults may be delaying parenthood, but they’re not putting off pet…

Rates Down Again, But Waning Banking Fears Add Volatility

The average mortgage rate ticked down again this week, but waning banking sector concerns have rates seesawing. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.32%, down from 6.42% the week prior. A year ago at this time, the 30-year FRM averaged 4.67%. The 15-year fixed-rate mortgage dipped from 5.68% to 5.56%. A year ago, it averaged 3.83%. “Economic uncertainty continues to bring mortgage rates down,” said Sam Khater, Freddie Mac’s Chief Economist. “Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers.” Some buyers returned to the market early in order to snag a…

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…

Existing Home Sales Exploded In February

Existing-home sales exploded in February, breaking a full-year downward streak thanks to retreating interest rates. Sales increased by 14.5% to a seasonally adjusted annual rate of 4.48 million from 4.02 million the month prior, according to the latest data from the National Association of Realtors. It’s the largest monthly percentage increase since July 2020. All four major regions saw sales increase month-over-month and decrease year-over-year. At the same time, the median price for an existing home slid YOY alongside rates, down 0.2% to $363,000. This is the first YOY decline in 131 consecutive months, the longest streak on record. “Conscious of changing mortgage rates, homebuyers are taking advantage of any rate declines. Moreover, we’re seeing stronger sales gains in areas…