Rates Hover Near Record Lows

“The sound and fury of the financial markets continue to warn of an impending recession; however, the silver lining is mortgage demand reached a three-year high this week,” says Sam Khater, Freddie Mac’s chief economist. “The decline in mortgage ratesover the last month is causing a spike in refinancing activity—as homeowners currently have $2 trillion in conventional mortgage loans that are in the money—which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up 7% from a year ago.”

Freddie Mac reports the following national averages for the week ending Aug. 15:

  • 30-year fixed-rate mortgages: averaged 3.60%, with an average 0.5 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.53%.
  • 15-year fixed-rate mortgages: averaged 3.07%, with an average 0.5 point, rising from last week’s 3.05% average. A year ago, 15-year rates averaged 4.01%.
Source: Freddie Mac

Latest Data Shows Housing Clash

Lower mortgage rates are prompting higher demand from home buyers to buy, but they aren’t finding enough homes for sale. Mortgage rates last week reached the lowest average since November 2016.

“July’s data highlight tension in the housing markets between buyers eager to take advantage of lower mortgage rates and potential sellers concerned about slowing price growth,” says George Ratiu, realtor.com®’s senior economist. “The decline in newly listed properties suggests that some would-be sellers are stepping back from the market, during the peak buying season, when most people are searching for their next home.”

July saw flat inventory growth, which realtor.com® researchers say could lead to inventory declines much sooner than originally anticipated. Newly listed properties were down 7% in July compared to a year ago, realtor.com® reports.

Source: realtor.com®

Mortage Rates Lowest Since 2016

“There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment,” says Sam Khater, Freddie Mac’s chief economist. “Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”

Freddie Mac reports the following national averages for the week ending Aug. 8:

  • 30-year fixed-rate mortgages: averaged 3.60%, with an average 0.6 point, falling from last week’s 3.75% average. Last year at this time, 30-year rates averaged 4.59%.
  • 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.20% average. A year ago, 15-year rates averaged 4.05%.
Source: Freddie Mac

Fed Just Cut Interest Rates

The Federal Reserve today cut interest rates for the first time since the Great Recession took hold in 2008. The Fed says its decision to lower interest rates a quarter-point , which comes after months of pressure from President Donald Trump, is designed to stave off the threat of an economic downturn.

Lower borrowing costs are helping buyers manage rising home prices. For example, buyers who spend $1,500 on monthly mortgage payments can afford to purchase a $402,500 home this year compared to $367,500 last year, when mortgage rates averaged 4.57%, according to realtor.com®. “Last year, buyers would have needed an additional $145 a month on top of the $1,500 to afford a $402,500 home,” says Danielle Hale, realtor.com®’s chief economist.

Source: “Realtor.com® Reports How Much More Home Buying Power There Is Today Thanks to Lower Mortgage Rates,” Forbes.com (July 30, 2019); “The Fed Just Cut Interest Rates. Here’s What That Means for You,” The New York Times (July 31, 2019); National Association of REALTORS®

Mortgage Rates at 3-Year Lows

After a slight uptick last week, mortgage rates fell back to a more regular pattern of hovering near three-year lows. Home buyers are responding to the lower rates, and mortgage applications for home purchases have continued to rise steadily the last two months to the highest year-over-year change since the fall of 2017, says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reported these national averages rates for the week ending July 25:

  • 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.5 point, falling from last week’s 3.81% average. Last year at this time, rates averaged 4.54%.
  • 15-year fixed-rate mortgages: averaged 3.18%, with an average 0.5 point, falling from last week’s 3.23% average. A year ago, 15-year rates averaged 4.02%.
Source: Freddie Mac

Hispanics Home Buyers Gaining

Hispanics are posting the largest homeownership gains of any ethnic group, new Census Bureau data shows. The wave of growth is a far cry from four years ago when the Hispanic homeownership rate reached a 50-year low. Since then, ownership among this segment has risen 3.3 percentage points.

Hispanics comprise 18% of the U.S. population, yet they accounted for nearly 63% of new U.S. homeowner gains over the past decade, according to the National Association of Hispanic Real Estate Professionals.

While the Hispanic ownership rate grows, ownership rates among blacks plunged to the lowest levels on record in the first quarter of this year, Census data shows. Economists note this is the first time in 20 years where Hispanics and blacks—the two largest racial minorities in the U.S.—are no longer following the same path when it comes to homeownership rates.

Source: “Wave of Hispanic Buyers Shores Up U.S. Housing Market,” The Wall Street Journal (July 15, 2019) [Log-in required.]

Home Loan Interest Rates Inch Up

After three weeks of mostly staying steady, average mortgage rates rose this week. Rates still remain at multiyear lows, keeping borrowing costs low for those shopping for homes this summer.

“Despite this slight increase in rates, home buyers are taking advantage of the multiyear low rates in droves, which is evident in the consistently higher refinance and purchase application volumes. The improvement in housing demand should provide sufficient momentum for the housing market and economy during the rest of the year,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending July 18:

  • 30-year fixed-rate mortgages: averaged 3.81%, with an average 0.6 point, up from last week’s 3.75%. Last year at this time, 30-year rates averaged 4.52%.
  • 15-year fixed-rate mortgages: averaged 3.23%, with an average 0.5 point, rising from last week’s 3.22% average. A year ago, 15-year rates averaged 4%.
Source: Freddie Mac

Survey: Renters Rely Heavily on Web Reviews of Landlords

Consumers largely depend on online reviews and ratings websites when deciding where to rent a property, according to the 2019 Renter Insight & Digital Engagement survey, based on a survey of more than 1,000 adults who are searching for a rental.

“It is imperative that U.S. property owners and managers carefully monitor and evaluate their online reputation if they wish to remain competitive in today’s dense real estate market,” says Aaron Clifford, senior vice president of marketing at Binary Fountain, an online reputation management platform, that commissioned the study.

Sixty-four percent of renters said they used online reviews to search for a rental property at the beginning of their search, the study found. Most read between one and 10 reviews before making a decision on a rental property. Further, 85% of respondents said they looked at online ratings and reviews even after a friend or family member recommended a property.

Source: Binary Fountain and “More Renters Going Online to Rate Their Landlord,” Real Estate Weekly (June 28, 2019)

How Burglars Often Enter a Home

Cove, a home security firm, surveyed nearly 1,000 people who have experienced a break-in at least once to learn more about how burglars entered the home and what they wished they had done in hindsight to better protect their property.

Home invasions aren’t always random. Studies show that many break-ins are committed by a person who lives within two miles.

A broken window tended to be the most common point of entry for a burglar. The following chart breaks down how burglars most often gained access to a home.

“Research conducted with convicted home invaders shows burglars typically avoid breaking into homes they consider more complicated,” researchers note. “While an active alarm system is likely to deter a break-in, so are big dogs that might be considered aggressive or likely to defend the home.”

Interesting graphs at source: “Break-In Hindsight,” Covesmart.com (July 2019)

Interest Rates ‘Lowest Since 2016’

For the seventh time in the last nine weeks, the 30-year fixed-rate mortgage dropped, reaching the lowest average since November 2016, Freddie Mac reports in its weekly mortgage market survey.

“Through late June, home purchase applications improved by five percentage points compared to the previous month. In the near term, we expect the housing market to continue to improve from both a sales and price perspective says Sam Khater, Freddie Mac’s chief economist.”

Freddie Mac reports the following national averages for the week ending June 27:

  • 30-year fixed-rate mortgages: averaged 3.73%, with an average 0.5 point, falling from last week’s 3.84% average. Last year at this time, it’s rates averaged 4.55%
  • 15-year fixed-rate mortgages: averaged 3.16%, with an average 0.5 point, falling from last week’s 3.25% average. A year ago, 15-year rates averaged 4.04%.
Source: Freddie Mac