Consumers: Home Appraisals Still Falling Short

Appraisals continue to lag homeowners’ price expectations, according to the latest Quicken Loans’ National Home Price Perception Index, which compares homeowners’ initial estimates and appraiser’s opinions of home values. Appraised values were 1.35 percent lower than homeowners’ expectations in August. That has narrowed from a 1.55 percent difference in July.

Many homeowners are still not understanding their home’s current value, according to the analysis. The perceptions can vary quite a bit across the country, too. For example, home values are 3 percent higher than homeowners’ estimated values in the West, while they are 3 percent lower than expected in the Midwest and Northeast.

More interesting data and graphs at: quickenloans.com/press-room/2017/09/12/quicken-loans-study-shows-consumers-continue-to-be-too-optimistic-with-anticipated-home-value/

Will These Lower Interest Rates Entice Buyers?

Fixed-rate mortgages continued to drop this week, lowering borrowing costs for home buyers.

“Following a mild decline last week, the 10-year Treasury yield rose 1 basis point this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate similarly remained relatively flat, falling just 1 basis point to 3.89 percent. Mortgage rates are continuing to hold at low levels.”

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

  • 30-year fixed rate mortgages: averaged 3.89 percent, with an average 0.4 point, dropping from last week’s 3.90 percent average. Last year at this time, 30-year rates averaged 3.43 percent.
  • 15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.5 point, falling from last week’s 3.18 percent average. A year ago, 15-year rates averaged 2.74 percent.

Source: Freddie Mac

The Housing Market Is Outperforming Forecast

The housing market has been off to a roar this spring. In fact, the market is performing so strongly that the National Association of REALTORS® has upgraded its forecast for the year.

At the start of the year, home sales were expected to match last year’s pace due to higher mortgage rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR’s chief economist. He now predicts existing-home sales to rise by 3.5 percent, and home prices likely will increase 5 percent this year.

“With no imminent threat of a recession, the housing market’s strong first quarter sets the foundation for continued gains the rest of the year,” Yun writes.

Source: “First Quarter GDP May Be Cool, But Housing Market Downright Balmy,” The Hill (May 1, 2017)

More Homeowners Tackle Renovation Projects

Homeowners are sprucing up their properties and undertaking more remodeling and repair projects, according to a recent study.

The Leading Indicator of Remodeling Activity, released by the Joint Center for Housing Studies at Harvard University, shows an annual growth in home improvement and repair expenditure this year that will remain above its long-term trend of 5 percent. Index authors, however, foresee a steady decline from 7.3 percent in the first quarter to 6.1 percent by the first quarter of 2018.

The National Association of Home Builders’ Remodeling Market Index also showed an increase in the first quarter of 2017, marking the highest reading in activity since 2015. The NAHB’s index shows that more remodelers are reporting that activity is higher now compared to the prior quarter. “A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” says Dan Bawden, the chairman of NAHB Remodelers. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.”

—Melissa Dittmann Tracey, REALTOR® Magazine

Home Loan ‘Interest Rates’ Edge Higher Again

Mortgage rates inched higher for the third consecutive week, but potential home buyers shouldn’t sweat it too much. Mortgage rates are still hovering below levels from a year ago.

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

  • 30-year fixed-rate mortgages: averaged 3.73 percent, with an average 0.5 point, rising from last week’s 3.68 percent average. Last year at this time, 30-year rates averaged 3.78 percent.
  • 15-year fixed-rate mortgages: averaged 2.99 percent, with an average 0.4 point, increasing from last week’s 2.96 percent average. A year ago, 15-year rates averaged 3.06 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.93 percent, with an average 0.5 point, increasing from last week’s 2.92 percent average. A year ago, 5-year ARMs averaged 2.97 percent.

Source: Freddie Mac

How’s Your City’s Well-Being?

Good news if you live in Florida, California, Colorado, or Texas – your residents display a high sense of well-being, according to the Gallup-Healthways Well-Being Index. These four states alone account for 14 of the top 20 well-being communities in the latest report.

To measure well-being, researchers weighed purpose, social, financial, community, and physical data-points of 190 communities across the country.

Download a copy of the full report to see where your city ranks.

Source: Gallup-Healthways Well-Being Index

Market Unrest Pushes Down Mortgage Interest Rates

For the third consecutive week, mortgage rates edged down, with the 30-year fixed-rate mortgage continuing below 4 percent, Freddie Mac reports in its weekly market survey.

“The Freddie Mac mortgage rate survey had difficulty keeping up with market events this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate dropped 11 basis points to 3.81 percent, the lowest rate in three months. This drop reflected weak inflation and nonstop financial market turbulence that is driving investors to the safe haven of Treasuries. However, the survey was largely complete prior to Wednesday’s Treasury rally that drove the yield on the 10-year Treasury below 2 percent, down 29 basis points since the end of 2015.”

Freddie Mac reports the following mortgage rates for the week ending Jan. 21:

  • 30-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.6 point, dropping from last week’s 3.92 percent average. Last year at this time, 30-year rates averaged 3.63 percent.
  • 15-year fixed-rate mortgages: averaged 3.10 percent, with an average 0.5 point, falling from last week’s 3.19 percent average. A year ago, 15-year rates averaged 2.93 percent.

Source: Freddie Mac

HUD Weighs Smoking Ban in Public Housing

The Department of Housing and Urban Development is inching closer to making public housing completely smoke-free.

Last year, HUD announced its intention to ban properties of having tobacco-based products, saying the dangers of second-hand smoke prompted such action.

HUD Secretary Julián Castro and Surgeon General Dr. Vivek Murthy announced a proposed rule this week to make the nation’s public housing properties completely smoke-free. If approved, that would require 3,100 public housing agencies to ban smoking within 18 months. The agencies would be required to initiate policies that prohibit lit tobacco products in all living units, indoor common areas, and all outdoor areas within 25 feet of housing and administrative office buildings.

HUD is currently seeking public comment on the proposed rule for the next 60 days.

Source: “HUD Is About to Ban Smoking in Housing,” HousingWire (Nov. 12, 2015)

For 10 Weeks, Mortgage Rates Stay Below 4%

Results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates declining following the Federal Reserve’s decision to defer a hike in the Federal funds rate.

‘News Facts’ on rates for the past week:

  • 30-year fixed-rate mortgage (FRM) averaged 3.86 percent with an average 0.7 point for the week ending September 24, 2015, down from last week when it averaged 3.91 percent. A year ago at this time, the 30-year FRM averaged 4.20 percent.
  • 15-year FRM this week averaged 3.08 percent with an average 0.6 point, down from last week when it averaged 3.11 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent this week with an average 0.5 point, down from last week when it averaged 2.92 percent. A year ago, the 5-year ARM averaged 3.08 percent.

Source: http://freddiemac.mwnewsroom.com/

Rising Mortgage Rates Won’t Spook Buyers?

Mortgage rates are likely to rise in the coming weeks and many housing analysts have warned that the rises will likely shake the housing market as borrowing costs get more pricey. But the fear of rising rates isn’t concerning home buyers yet, according to a new consumer survey by the real estate brokerage Redfin.

Rising mortgage rates barely appeared in list that ranked the top buyer concerns. In fact, just five percent of consumers surveyed said their buyer concern was that “mortgage rates will go up before I can buy.” But buyers showed much more fear over home prices rising too high (27 percent); too much competition from other buyers (17 percent); not enough for-sale homes to choose from (14 percent); having to sell a home first (8 percent); and not having enough saved for a down payment (6 percent).

Nearly 72 percent of buyers recently surveyed say they expect interest rates to rise in the next six months. But fewer than 7 percent of potential home buyers said they were in a hurry to purchase a home before mortgage rates rose, according to the Redfin survey. Instead, buyers said they were more motivated to buy because of a new child, marriage, or other life event (26 percent); rent fatigue (13 percent); and a belief that real estate is a good investment (10 percent).

Source: “A 5 Percent Mortgage? No Big Deal, Homebuyers Say,” Forbes.com (9/11/15)