After absorbing a mixed December jobs report; the 10-year Treasury yield fell 8 basis points. The 30-year mortgage rate moved in tandem with Treasury yields falling 8 basis points to 4.12 percent, the second decline since the presidential election. The December jobs report showed 156,000 jobs added, barely meeting many experts’ expectations, while wage growth was at the high end of expectations at 0.4 percent. If strong wage gains persist, they may push inflation and interest rates higher.
Freddie Mac reports the following national averages for the week ending Jan. 12:
30-year fixed-rate mortgage (FRM) averaged 4.12 percent with an average 0.5 point for the week ending January 12, 2017, down from last week when it averaged 4.20 percent.
15-year FRM this week averaged 3.37 percent, down from last week when it averaged 3.44 percent.
Source: Freddie Mac
In about two-thirds of the country – or 66 percent of the largest U.S. counties – it’s more affordable to buy a home than to rent one, according to a report by ATTOM Data Solutions.
They compared the monthly rents of three-bedroom apartments to monthly payments on median-priced homes (including the mortgages, property taxes, and insurance) across 540 counties.
“It feels like buying a home is getting tougher and tougher from an affordability standpoint,” says Daren Blomquist, ATTOM’s senior vice president. “But the low interest rates have really helped.”
Source: “Buying a Home May Be More Affordable Than You Think,” realtor.com® (Jan. 5, 2017) and ATTOM Data Solutions
Rural areas are expected to see more growth in the 65-and-older population than urban areas over the next few decades, according to a report by the Urban Institute. But for those expecting to grow old in their home, it could prove problematic. Many of the aging homes in rural areas are not suitable for elderly homeowners, the report says.
Sixty-one percent of homeowners age 55 and older say they plan to remain in their home as they age, according to the 2016 Aging-in-Place Report. The report says more education is needed on not just explaining what it means to age in place but also what it means to “thrive in place,” the report notes.
“The number of aging homes that are good candidates for rehabilitation is expanding much faster than new households throughout rural America, making this rehabilitation need urgent,” the report notes. “Many households can make the investments themselves, installing energy-efficient systems can offer savings. As demand grows for home retrofits, so will the experience of contractors and the building industry more broadly, increasing innovation and decreasing cost.”
Source: “Aging Population Faces Challenges in Aging Homes,” MarketWatch (Dec. 28, 2016)
Spread this news: Home prices nationwide, including distressed sales, rose year over year by 7.1 percent in November 2016 compared to November 2015, CoreLogic’s Home Price Index shows.
Expect more price jumps ahead too, although at a more modest pace. Home prices likely will increase by 4.7 percent nationwide on a year-over-year basis from November 2016 to November 2017, according to CoreLogic’s forecasts. We believe our area will increase by over 6 percent.
Source: “Home Price Index Highlights: November 2016,” CoreLogic (Jan. 3, 2017)
The majority of the top 100 housing markets nationwide are improving compared to their historic benchmark range of housing activity, according to Freddie Mac’s Multi-Indicator Market Index.
The index measures the stability of the housing market by reflecting how single-family housing markets are performing to their long-term stable range based on home purchase applications, payment-to-income ratios (changes in home purchasing power based on home prices, mortgage rates, and household income), proportion of on-time mortgage payments, and local employment.
“The purchase applications indicator is up nearly 20 percent from last year and is reflected in the recent better-than-expected existing and new home sales purchase data,” says Len Kiefer, Freddie Mac’s deputy chief economist.
Source: Freddie Mac
Despite mortgage rates reaching a two-year high last week, home buyers say the increases aren’t scaring them away from their real estate search, according to a new Redfin survey. Only 2.6 percent of respondents say they have decided to postpone their search since rates rose above 4 percent.
Twenty-five percent of respondents say the rise in rates does not impact their homebuying decisions, and about 24 percent say they feel a greater sense of urgency to buy before rates go up further. However, 23 percent say the rate increases may prompt them to look in other areas or buy a smaller home. About 26 percent of buyers say they might take more time with their search and see if rates go back down again.
Source: “Rising Mortgage Rates: Homebuyers Are More Resilient Than You Might Think,” Redfin Blog (Dec. 20, 2016)
Higher mortgage rates and home prices aren’t deterring first-time buyers yet. Those new to the home-purchase game comprised 32 percent of the market in November, up from a 30 percent share a year ago, according to the National Association of REALTORS®’ latest housing report.
Overall, this has been a good year for this segment of the population. NAR’s 2016 Profile of Home Buyers and Sellers, released in November, showed that the annual share of first-time buyers was 35 percent in 2016, which is the highest since 2013 (38 percent).
“There are fewer available homes during the winter months but also fewer buyers,” suggests NAR President William E. Brown. “With mortgage rates and prices expected to increase as the year goes on, the first few months of 2017 could be an opportune time close on a home.”
So we suggest let us start your home search now, plus the loan options ASAP!
Source: National Association of REALTORS®
The Federal Reserve hiked short-term interest rates Wednesday, in a move largely predicted by economists. So, what does this mean for mortgage rates and buyers?
“That means rates like we’ve seen for most of the past five years are indeed history,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column. Rates in the 3 percent range are gone.
“Mortgage rates will move higher before the Fed acts again, so if the Fed carries out its three planned hikes in 2017, we could come close to 5 percent on 30-year conforming rates before the end of next year,” Smoke notes.
How big of an impact could rising rates have in the coming months? A median-priced home would be $978 per month payment at Wednesday’s rate of 4.2 percent (and assuming a 20 percent down payment), realtor.com® notes. Take that rate to 5 percent, the monthly payment jumps up to $1,074, nearly $100 more.
So, if you intend to buy next year and finance the purchase with a mortgage, now is a great time to begin!
Source: “Fed’s Rate Hike Confirms It: Time Is Running Out on Low Mortgage Rates,” realtor.com® (Dec. 15, 2016)
Fixed-rate mortgages were once again on the way up this week, marking the sixth consecutive month for increases. The 30-year fixed-rate mortgage, the most popular option among home buyers, reached a new high for the year.
Freddie Mac reports the following national averages for the week ending Dec. 8:
30-year fixed-rate mortgages averaged 4.13 percent, with an average 0.5 point, increasing from last week’s 4.08 percent average. Last year at this time, 30-year rates averaged 3.95 percent.
15-year fixed-rate mortgages averaged 3.36 percent, with an average 0.5 point, increasing from last week’s 3.34 percent average. A year ago, 15-year rates averaged 3.19 percent.
Source: Freddie Mac