Rates Increased, But Don’t Worry

No reason for home shoppers to get nervous: Economists largely predict mortgage rates will dip in the weeks ahead. Also, rates are still more than a percentage point lower than a year ago.

“Despite this week’s uptick in mortgage rates, the housing market remains on the upswing, with improvement in construction and home sales,” says Sam Khater, Freddie Mac’s chief economist. “While there has been a material weakness in manufacturing and consistent trade uncertainty, other economic trends like employment and homebuilder sentiment are encouraging.”

Freddie Mac reports the following national averages for the week ending Oct. 17:

  • 30-year fixed-rate mortgages: averaged 3.69%, with an average 0.6 point, rising from last week’s 3.57% average. Last year at this time, 30-year rates averaged 4.85%.
  • 15-year fixed-rate mortgages: averaged 3.15%, with an average 0.5 point, rising from a 3.05% average last week. A year ago, they averaged 4.26%..
Source: Freddie Mac

Mortgage Rates ‘Are Dropping’

The 30-year fixed-mortgage fell 8 basis points this week, averaging 3.57%, Freddie Mac reports. The lower rates are drawing out more home buyers in the fall market.

“The 50-year low in the unemployment rate combined with low mortgage rates has led to increased home buyer demand this year. Much of this strength is coming from entry-level buyers—the first-time home buyer share of the loans Freddie Mac purchased in 2019 is 46%, a two-decade high,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Oct. 10:

  • 30-year fixed-rate mortgages: averaged 3.57%, with an average 0.6 point, falling from last week’s 3.65% average. Last year the 30-year rates averaged 4.90%.
  • 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.14% average. A year ago, 15-year rates averaged 4.29%.
Source: Freddie Mac

Housing Market Forecast is Bright

Freddie Mac economists predict that the 30-year fixed-rate mortgage will remain below 4% for the remainder of this year, which could continue to bode well for the housing market to ease affordability concerns somewhat for potential buyers.

With lower mortgage rates, economists are predicting that home prices will also moderate, appreciating at 3.4% in 2019, which is in line with long-term growth. Plus, Home Sales Up for Second Consecutive Month and More New Homes Are Entering the Pipeline)

Much of the high demand in the housing market lately has been coming from young adults. “The millennial cohort has now entered the housing market in force and is already driving major changes in buying and selling patterns,” Frank Martell, president and CEO of CoreLogic, said in a statement about its latest housing index that showed home prices moderating.

Source: Freddie Mac

Qualify for a Appraisal Exemption?

For the first time in 25 years, federal regulators are increasing the property value limit under which buyers of certain homes must obtain an appraisal as part of selling. Federal banking agencies have approved a plan enabling certain homes worth $400,000 or less to be subject to an evaluation rather than an appraisal.

For nearly a year, the Federal Deposit Insurance Corp., office of the comptroller of the currency, and board of governors of the Federal Reserve deliberated on the proposed rule change, reviewing hundreds of comments from the public. Regulators finally approved the rule last Friday. The new rule doesn’t apply to transactions in which the buyer is purchasing the home with financing wholly or partially insured by a government-run or government-sponsored agency, including the Federal Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, and Freddie Mac. As a result, the majority of residential transactions in the U.S. will not be affected by this new rule.

Latest Fed Rate Cut Benefit

The Federal Reserve lowered its benchmark interest rate by another quarter of a percentage point on Wednesday to a range of 1.75% to 2%, citing concerns over a global economic slowdown. Mortgage rates aren’t directly tied to the Fed’s interest rate, but they do tend to be influenced by them.

Still, while mortgage rates remain low, the Fed’s actions Wednesday will likely have little impact, at least initially, in directly bringing rates down more, several economists said after the Fed’s announcement.

Following its meeting, the Fed said that the U.S. economy is in “strong shape and unemployment remains low.” “If the economy does turn down, a more extensive series of rate cuts could be warranted,” Fed Chairman Jerome Powell said at a news conference following the Fed’s meeting.

Mortgage Rates Increase

“Purchase mortgage applications up nine percent from a year ago. The improved demand reflects the still healthy underlying consumer economic fundamentals such as a low unemployment rate, solid wage growth and low mortgage rates. While there has been a material weakness in manufacturing and consistent trade uncertainty, so far, the American consumer has proved to be resilient with solid home purchase demand,” says Sam Khater, Freddie Mac’s Chief Economist.

Freddie Mac reports the following national averages for the week ending Sept. 12:

  • 30-year fixed-rate mortgage averaged 3.56 percent with an average 0.5 point for the week ending September 12, 2019, up from last week when it averaged 3.49 percent. A year ago at this time, the 30-year FRM averaged 4.6 percent.
  • 15-year fixed-rate mortgage averaged 3.09 percent with an average 0.5 point, up from last week when it averaged 3.0 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent.

Source: Freddie Mac

Home Loan Rates Remain Low!

“Mortgage rates continued the summer swoon due to weaker economic data,” says Sam Khater, Freddie Mac’s chief economist. “While economic growth is clearly slowing due to rising manufacturing and trade headwinds, economic fundamentals are still solid for U.S. consumers. The unemployment rate is low, housing affordability is improving, home buyer demand is rising, and home price growth is stable.”

Freddie Mac reports the following national averages for the week ending Sept. 5:

  • 30-year fixed-rate mortgages: averaged 3.49%, with an average 0.5 point, falling from last week’s 3.58% average. Last year at this time, they averaged 4.54%.
  • 15-year fixed-rate mortgages: averaged 3%, with an average 0.6 point, dropping from last week’s 3.06% average. A year ago, 15-year rates averaged 3.99%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.30%, with an average 0.4 point, dropping from last week’s 3.31% average. A year ago, averaged 3.93%.
Source: Freddie Mac

Smartphones Are Guiding Buyers

Mobile devices are what buyers turn to for finding properties and real estate agents. This has put increasing importance on real estate pros to make sure their websites are mobile friendly and they’re connecting in a way that clients most desire.

The typical home buyer used a mobile device to search for properties online, looking at websites with photos, home listings, and information about the homebuying process, according to the newly released “Real Estate in a Digital Age 2019 Report” published by the National Association of REALTORS® that looks at technology use within transactions.

Overall, 76% of all buyers say they found their home on a mobile device. Seventeen percent of buyers surveyed said they also found their agent on a mobile device, too.

Source: “Real Estate in a Digital Age,” National Association of REALTORS® (8/2019)

Mortgage Rates at 2016 Territory

The 30-year fixed-rate mortgage averaged 3.55% this week, the lowest average since November 2016, Freddie Mac reports. The lower mortgage rates are boding well for the housing market.

“The drop in mortgage rates continues to stimulate the real estate market and the economy,” says Sam Khater, Freddie Mac’s chief economist. “Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months, while refinances surged to their highest share in three and a half years.”

Freddie Mac reports the following national averages for the week ending Aug. 22:

  • 30-year fixed-rate mortgages: averaged 3.55%, dropping from last week’s 3.60% average. Last year at this time, they averaged 4.51%.
  • 15-year fixed-rate mortgages: averaged 3.03%, with an average 0.5 point, falling from last week’s 3.07% average. A year ago, 15-year rates averaged 3.98%.
Source: Freddie Mac

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