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

Survey: Home Inspection Benefits

Very few home inspections ever come back completely clear. Indeed, 86% of buyers who recently had a home inspected said their inspector identified at least one problem, according to a new survey from Porch.com, a home remodeling resource, which surveyed about 1,000 buyers who hired a home inspector.

Some of the most common issues uncovered threatened the essential components of a home too. In a fifth of the cases, the home’s roof was a major culprit. Other issues included cosmetic flaws, but also more serious cracks and leaks were found, according to the survey. Electrical problems also were common, and among the most concerning, since they can pose a fire risk, according to the study. Problems with windows  appearing in more than 18% of reports.

More information on charts at: “Home Inspection Leverage,” Porch.com (July 2019)

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

Build More Homes or Get Fined?

In a move to address the housing shortage, some California cities may start to face some stiff penalties if they don’t start building more homes. Under a new bill, cities could face fines up to $600,000 per month if they don’t build more homes for their residents.

A court can find a city or county in violation of state laws that set targets for how much housing a community needs to build for its population needs.

If found in violation, local governments would have a year to comply before the fine kicks in. Following six months of fines, the court could even take over a local government’s authority over its housing plans, according to the bill.

Survey: ‘Senior Housing Demand’

Investors are eyeing senior housing and plan to increase their buying within the sector over the next 12 months, according to the CBRE U.S. Seniors Housing & Care Investor Survey. Sixty-two percent of investors surveyed say they intend to increase the size of their portfolios with elderly living segments over the next year.

“Senior housing demand should remain at relatively healthy levels through 2019, given expected steady economic growth and lower mortgage rates,” says Jeannette Rice, Americas head of multifamily research at CBRE. “Demographic trends are positive for the asset class, with the baby boomers nearing the traditional age for senior housing and nearly 9,000 turning 70 every day this year.”

Source: “Report: Investors Plan to Increase Spending on Senior Housing,” Real Estate Weekly (July 10, 2019)

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)

Rates Stay Near 3-Year Lows

“The recent stabilization mortgage rates reflects modestly improving U.S. economic data and a more accommodative tone from the Federal Reserve to respond to the rising downside economic risk from trade tensions and soft global economic data. On the housing front, the latest weekly purchase applicationdata suggests home buyer demand continues to rise, which is consistent with the slowly improving real estate data from the last two months,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending July 11:

  • 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.5 point, unchanged from last week. Last year at this time, 30-year rates averaged 4.53%.
  • 15-year fixed-rate mortgages: averaged 3.22%, with an average 0.5 point, rising from last week’s 3.18% average. A year ago, 15-year rates averaged 4.02%.
Source: Freddie Mac

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