Mortgage Rates Tick Up

“With Federal Reserve policy on cruise control and the economy continuing to grow at a steady pace, mortgage rates have stabilized as the market searches for direction,” said Sam Khater, Freddie Mac’s Chief Economist. “The risk of an economic downturn has receded and, combined with the very strong job market, it should lead to a slightly higher rate environment.”

  • 30-year fixed-rate mortgage averaged 3.73 percent with an average 0.7 point for the week ending December 12, 2019, up from last week when it averaged 3.68 percent. A year ago at this time, the 30-year FRM averaged 4.63 percent.
  • 15-year fixed-rate mortgage averaged 3.19 percent with an average 0.7 point, up from last week when it averaged 3.14 percent. A year ago they averaged 4.07 %.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36 percent with an average 0.4 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 5-year ARM averaged 4.04 percent.

Source: Freddie Mac

5.4% Jolt for Home Prices for 2020

More home appreciation is likely to come in the new year. In a new report released by CoreLogic, economists predict home prices will spike by 5.4% from October 2019 to October 2020. That is even higher than the 3.5% annual appreciation in national home prices posted this October, the real estate data firm notes.

“We expect home prices to rise at least another 5% over the next 12 months,” says Frank Martell, president and CEO of CoreLogic. “Interestingly, this persistent increase in home prices isn’t deterring older millennials. In fact, 25% of those surveyed anticipate purchasing a home over the next six to eight months.”

The CoreLogic Home Price Index is a projection of home prices that is calculated using a variety of economic variables and state-level forecasts.

Home price increases by state is shown in ‘Table 2’ at article source: CoreLogic

2020 Conforming Loan Limits

The Federal Housing Finance Agency approved a higher conforming loan limit that will take effect Jan. 1, 2020. The cap on loans purchased or acquired by Fannie Mae and Freddie Mac during 2020 will increase to $510,400, the FHFA said Tuesday. That marks an increase over the $484,350 limit for 2019.

Higher limits are available for properties that contain two, three, or four units. The limits for multiunit properties range from $653,550 to $981,700.

View a map showing the 2020 maximum loan limits nationwide. (Note: El Dorado County, CA. is $530,001 to $765,599 for 1 – 4 units)

Source: FHFA and “Conforming Loan Limit Increased to $510,400,” Mortgage News Daily (Nov. 26, 2019)

Mortgage Prepayments Climb

Mortgage prepayments, a common gauge for housing and refinancing demand, jumped to its highest level since May 2013—a good sign for the market, according to a new analysis from data and analystics firm Black Knight. Mortgage prepayments were at 1.81% in October, more than double the figure a year ago. That represents a 134% year-over-year increase, Black Knight reports.

What’s causing the improvement? Low mortgage rates are prompting more people to refinance their mortgage or buy a home. Consumers typically pay off previous loans when they buy a new home.The uptick is apparent: Existing-home sales increased 1.9% in October to a seasonally adjusted annual rate of 5.46 million—4.6% higher than a year ago, the National Association of REALTORS® reported last week.

Source: “Mortgage Prepays Surge to 6-Year High, Black Knight Says,” HousingWire (Nov. 25, 2019)

Double Master Suites = Growing Trend

Double master bedrooms are proving to be a growing trend in new luxury developments, Forbes.com reports.

Builders are responding by adding two master suites into more floor plans, whether it’s a single-family home or condo. K.Hovnanian Homes offers several townhouse communities with two master bedrooms. The rooms include large bathrooms attached and walk-in closets.

Some are adding a dual master bedroom on the main level with a separate entrance. “We include features like secondary master suites so that families and loved ones can maintain close connections as they grow,” Gregory Malin, CEO and founder of Troon Pacific, told Forbes.com. “These spaces also allow the owners to age in place, as they can maintain their independence while having their children just steps away.”

Which Home Security System?

Consumers show preferences for certain types of security options, according to Safehome.org, a home security survey. For example, the group of consumers who say they feel safe were two times more likely to have a front door security system, the survey found. Professionally monitored security systems help many consumers feel safe, but certain demographics felt more at ease with other features. For example, baby boomers prefer security cameras around the property, men surveyed felt most safe with guns, and renters and homeowners in rural areas felt safest with an entry keypad with a security code and alarm.

About a third of consumers surveyed with a home security system use a variety of accessories, including door sensors and security keypads. Thirty percent of those surveyed also chose all-in-one security systems, which usually consist of live streaming cameras, motion sensors, arming and disarming functionality, and sirens.

Source: “Security in the Home,” Safehome.org (2019)

Re-Acceleration in Home Prices

Good news for sellers: Home prices are on the rise. But buyers should brace for higher prices.

Nearly all—93%—of the largest metros in the U.S. saw home prices rise in the third quarter over the past year. A shortage of homes for sale, combined with higher demand, continues to push home prices higher, according to the latest quarterly report from the National Association of REALTORS®, released Thursday.

While the majority of metros saw higher prices in the third quarter, a few markets did register lower prices, notably in areas long-known for high costs. Single-family median home prices moderated in the third quarter in markets such as San Jose-Sunnyvale-Santa Clara, Calif. (–4.6%); San Francisco-Oakland-Hayward, Calif. (–2.5%); and San Diego-Carlsbad, Calif. (–0.8%).

Home Design Trends for 2020

From shiny kitchen cabinets to wooden ceiling beams, several home design trends aim to liven up neutral interiors in the new year. Home remodeling website Houzz recently asked designers to chime in about what design trends they expect to grow more popular over the next few months. Here are a few of their trends.

High-gloss kitchen cabinetry. Flat-panel cabinets with a high-gloss finish are gaining popularity. The shinier finish bounces light around the space. Also, the flat-panel design gives a modern look that makes the cabinets appear like they’re receding.

Wooden beams. More attention in home design is being placed on dressing up the home’s fifth wall. Wood ceiling beams are one way to do that.

Brass accents. Kitchen designs are incorporating more black or dark kitchen cabinets paired with brass or gold hardware for a visual pop.

Source: “10 Design Trends Coming to a Home Near You,” Houzz.com (Oct. 29, 2019)

Open House? Avoid This Mistake!

Besides staging, cluttering, and stowing away jewelry or valuables, home sellers are overlooking the need to tuck prescription drugs away from medicine cabinets and drawers, they say. A recent article at realtor.com® warns of the dangers and calls out specific medications like Oxycontin, attention deficit disorder medications like Concerta and Adderall, depression and anxiety medications like Zoloft and Xanax, and sleep aids like Ambien for being targets of open house vandals. Some over-the-counter cough suppressants or heartburn medications also may be at risk of being swiped.

“If you’re getting ready to show your home, walk around the house thinking like a stranger,” realtor.com® notes in the article. “What’s easy to pick up? What might be easy to sell? This is a great guideline for medications, but also for hiding any valuables in your home. Think about wine, perfume bottles and expensive lotions.”

Source: “The One Thing Home Sellers Forget to Hide Before an Open House,” realtor.com® (Nov. 5, 2019)

‘Zombie’ Foreclosures Lurking?

More than 1.5 million—or 1.5% of U.S. single-family homes and condos—were vacant in the fourth quarter of 2019 , according to a new report from ATTOM Data Solutions. Marking improvements, but so-called “zombie” foreclosures are still plaguing some markets.

Despite an ongoing housing shortage, several markets are still dealing with zombie foreclosures. These are homes that have been vacated by the owners and remain vacant while lingering in the foreclosure process. The percentage of zombie properties was at 2.96% in the fourth quarter, down from 3.2% in the third quarter.