Average fixed-rate mortgages moved slightly lower this week, a welcome reversal following three consecutive weeks of increases.
Freddie Mac reports the following national averages for the week ending May 21:
- 30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.7 point, dropping from last week’s 3.85 percent average. Last year at this time, 30-year rates averaged 4.14 percent.
- 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.6 point, dropping from last week’s 3.07 percent average. A year ago, 15-year rates averaged 3.25 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.88 percent, with an average 0.5 point, dropping from last week’s 2.89 percent average. Last year at this time, 5-year ARMs averaged 2.96 percent.
Source: Freddie Mac
Lenders are showing signs of loosening up when it comes to home buyers seeking a mortgage. The Mortgage Bankers Association’s Mortgage Credit Availability Index ticked up slight in April, following an increase the previous month too. Increases in the index are indicative of an overall loosening of credit.
MBA’s index shows that mortgage credit availability has increased consistently over the last several months, coinciding with recent announcements from the federal government of programs that have been designed to open the credit box. Fannie Mae and Freddie Mac’s move to back 3 percent down payment loans as well as the Federal Housing Administration’s action to reduce its mortgage insurance premiums have helped ease credit, MBA Chief Mike Fratantoni says.
Other government offerings also helped to ease credit even more in the latest report, reflecting April data, MBA notes.
Source: “MBA: It Keeps Getting Easier to Get a Mortgage,” HousingWire (May 12, 2015) and “REALTORS® Confidence Index,” National Association of REALTORS® (April 2015)
The Federal Housing Finance Agency announced that it would be extending its participation in the Home Affordable Mortgage Program and the Home Affordable Refinance Program through the end of 2016.
“These programs have provided critically important relief for many borrowers by allowing them to lower their monthly payments and, as a result, have prevented many foreclosures,” says Mel Watts, FHFA director, regulator of Fannie Mae and Freddie Mac.
Under HARP, home owners who have loans backed by Fannie Mae or Freddie Mac can refinance at lower interest rates, even if their home has lost value. HAMP, on the other hand, provides incentives for lenders to alter mortgage terms of borrowers in order to make the loans more affordable.
HAMP and HARP were started after the housing crisis to help home owners avoid foreclosure. While the number is lessening, Watt estimates that about 600,000 borrowers could still be helped by HARP.
Source: “Fannie, Freddie Participation in Foreclosure Prevention Programs Extended,” Reuters (May 8, 2015)
The 30-year fixed-rate mortgage climbed to average 3.80 percent this week while 15-year rates rose above 3 percent, both reaching their highest levels in nearly two months, Freddie Mac reports in its weekly mortgage market survey.
Freddie Mac reports the following national averages for the week ending May 7:
- 30-year fixed-rate mortgage: averaged 3.80 percent, with an average 0.6 point, rising from last week’s 3.68 percent average. Last year at this time, 30-year rates averaged 4.21 percent.
- 15-year fixed-rate mortgages: averaged 3.02 percent, with an average 0.6 point, rising from last week’s 2.94 percent average. A year ago, 15-year rates averaged 3.32 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.90 percent, with an average 0.4 point, up from last week’s 2.85 percent average. Last year at this time, 5-year ARMs averaged 3.05 percent.
- 1-year ARMs: averaged 2.46 percent, with an average 0.4 point, dropping from last week’s 2.49 percent average. A year ago, 1-year ARMs averaged 2.43 percent.
Source: Freddie Mac
Sixty-two percent of potential home buyers say that now is a better time to purchase a home than it was a year ago, according to Chase’s new national survey, “Insights From the Mind of the Homebuyer.” The top reasons that are motivating more Americans to get off the fence are rising rental costs and historically low interest rates, the survey found.
Thirty-two percent of more than 1,000 consumers surveyed say they want to buy soon in order to take advantage of low rates. What’s more, 35 percent say that the 30-year fixed-rate mortgage rising above 4 percent would delay their decision to buy.
Twenty percent of consumers surveyed say that the rising cost of rent is making home ownership look like a better value and is the top reason why they want to buy. Also, 20 percent of those surveyed say that their desire to make an upgrade from their current home was their top motivation for buying.
Nearly 70 percent say they are worried they may have already missed the best time to buy because of rising home prices. Three out of four home buyers say they’re concerned their offer will be outbid by others, and three in five say they think they’ll need to buy a smaller home or consider other neighborhoods outside of their top choices because of rising prices, the survey finds.
The number of trees on a lot can be a powerful influence for home buyers. 18 percent of repeat buyers and 25 percent of buyers purchasing a new home said that being on a wooded lot or on a lot with many trees was very important to them, according to National Association of REALTORS®’ home buyer and seller surveys.
If buyers can’t live with a wooded lot, they certainly at least want one nearby. Twenty-three percent of recent buyers surveyed felt that convenience to parks or recreational facilities was an influencing factor for their neighborhood choice.
Home buyers may not only want trees for beauty but also for savings. At least three trees strategically placed on a lot can save an average household between $100 and $250 in annual energy bills, according to the U.S. Department of Energy.
Source: “National Arbor Day: Trees and the Home Purchase,” National Association of REALTORS® Economists’ Outlook blog (April 24, 2015)
The 30-year fixed-rate mortgage averaged 3.65 percent this week, remaining near its 2015 low and offering “positive news for potential home buyers in the market this spring,” Freddie Mac reports in its mortgage market survey.
The low rates are helping to provide a boost to loan demand. Mortgage applications for home purchases in 60 of the 100 markets that Freddie Mac tracks in its index are up compared to the same point last year.
Freddie Mac reports the following national averages for the week ending April 23:
- 30-year fixed-rate mortgages: averaged 3.65 percent, with an average 0.6 point, dropping from last week’s 3.67 percent average. Last year at this time, 30-year rates averaged 4.33 percent.
- 15-year fixed-rate mortgages: averaged 2.92 percent, with an average 0.6 point, falling from last week’s 2.94 percent average. A year ago, 15-year rates averaged 3.39 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.84 percent, with an average 0.4 point, dropping from last week’s 2.88 percent average. Last year at this time, 5-year ARMs averaged 3.03 percent.
Source: Freddie Mac
“We have downsized our first-quarter economic growth expectations in light of several transitory factors that weighed on consumption,” says Doug Duncan, Fannie Mae’s chief economist. “Although some momentum was lost in the first quarter as consumers remained cautious in their spending, perhaps putting an emphasis on repairing their personal balance sheets and replenishing savings, we expect that consumer spending will catch up during the second quarter and continue in subsequent months, supporting our forecast of 2.8 percent growth for the year. We believe this momentum will carry over into the housing market, as well, particularly if strong consumer income growth continues.”
However, Fannie Mae economists caution that there could be some volatility, particularly with consumer spending and the financial markets, leading up to the Federal Reserve’s first expected rate hike in the coming months.
Source: “Q1 Economic Growth Measures Downsized, But Expected to Spring Forward,” Fannie Mae (April 20, 2015)
The Consumer Financial Protection Bureau issued guidance on how to provide mortgage applicants with a list of local home ownership counseling organizations. The new guidelines, which overwrite ones originally issued in 2013, offer guidance to lenders on how to provide applicants abroad with home ownership counseling lists; permissible geolocation tools; disclosures; and high-cost mortgage counseling qualifications.
“Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision,” says CFPB Director Richard Cordray. “Housing counselors are a crucial source of that helpful advice. We will continue to work to improve the home-buying experience for customers, and today’s interpretive rule will help industry comply with these important protections.” Your comments?
View CFPB’s full interpretive rule issued at the agency’s website.
Source: Consumer Financial Protection Bureau
Home prices can influence a home owner’s child’s future income, according to a new study by the Federal Reserve Bank of Boston.
“If home prices are rising, parents who are home owners may have additional resources to finance a child’s higher education, either because they feel richer or they can borrow against the home’s equity,” Maria Jose Luengo-Prado, a senior economist at the Federal Reserve Bank of Boston, says about the report. “This may allow their children to attend college or attend a higher-ranked [more expensive] school. On the other hand, the effect of rising house prices for parents who are renters is the opposite. Rising housing prices often mean higher housing costs. Rents go up. They may also need to save more money for a down payment to buy a house in the future.”
Source: “Salary Advantage Goes to Children of Homeowners,” The Wall Street Journal (April 12, 2015) Your comments?