Mortgage Rates Retreat Slightly This Week

The 30-year fixed-rate mortgage decreased slightly, following two months of steady rises.

“The 30-year mortgage rate moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year mortgage rate in over two months, a stark contrast from last week’s jump following the FOMC announcement.” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending March 23:

  • 30-year fixed-rate mortgages: averaged 4.23 percent, with an average 0.5 point, falling from last week’s 4.30 percent average. Last year at this time, 30-year rates averaged 3.71 percent.
  • 15-year fixed-rate mortgages: averaged 3.44 percent, with an average 0.5 point, dropping from last week’s 3.50 percent average. A year ago, 15-year rates averaged 2.96 percent.

Source: Freddie Mac

Home Loan Interest Rates Hit 2017 High

For the first time in weeks, the 30-year mortgage rate moved with treasury yields and jumped 11 basis points to 4.21 percent. The strength of Friday’s employment report and the outcome of next week’s FOMC meeting are likely to set the direction of next week’s survey rate.

Freddie Mac reports the following national averages rates for the week ending March 10:

  • 30-year fixed-rate mortgage (FRM) averaged 4.21 percent with an average 0.5 point for the week ending March 9, 2017, up from last week when it averaged 4.10 percent. A year ago at this time, the 30-year FRM averaged 3.68 percent.
  • 15-year fixed-rate mortgage  (FRM) this week averaged 3.42 percent with an average 0.5 point, up from last week when it averaged 3.32 percent. A year ago at this time, the 15-year FRM averaged 2.96 percent.

Source: Freddie Mac

How Will Housing Fare In the Next Decade?

Housing demand over the next decade will be significantly higher than it is today, predicts Lawrence Yun, the chief economist of the National Association of REALTORS®, in his latest column at Forbes.com. Rising populations and a growth in the job market likely will release a pent-up demand in housing over the next 10 years, he says.

The ages you’ll need to watch for in the housing market over the next decade: those in their 30s and 40s. The population of people in their 30s is expected to grow by 5 million over the next decade, reaching 48 million. Yun says that 12 percent increase likely will lead to more first-time home buyers. Plus, the number of Americans in their 40s will increase by 3 million, and he predicts they’ll be looking to trade up in real estate.

Overall, Yun notes, “Within reasonable parameters of economic growth and interest rate movements, home sales should do well over the next decade, clocking in at around 6 million a year.” The ages we’ll need to watch for in the housing market over the next decade: those in their 30s and 40s. The population of people in their 30s is expected to grow by 5 million over the next decade, reaching 48 million. Or course, every region will vary, what’s predicted for your market?

Source: “Housing Demand Over the Next Decade,” Forbes.com (March 2, 2017)

 

Maybe Rethink That Retirement Age?

Workers over the age of 65 are staying active in the workforce, opting to push back retirement.

In the year 2000, about 13 percent of Americans 65 and over reported being employed full or part time. But, by May 2016, that percentage had increased to 18.8 percent. As such, nearly 9 million Americans who are age 65 and over are employed. Further, over the next five years, that percentage is expected to rise to 32 percent of the workforce.

However, workers still need to be practical and anticipate retiring one day, and you should plan for it.

Source: “Workers Are Working Longer—and Better,” The New York Times (March 2, 2017)

Home Buyers: Watch Out for Deed Restrictions

Deed restrictions can bring nasty surprises to homeowners looking to remodel or even when buying a home. These restrictions can limit a number of property features, such as the number of bedrooms in your home, the building height, the type of vehicles in your driveway, the fencing permitted, the type and number of trees that can be removed from a property, and even the style and color of construction materials used in a renovation (which often is intended to limit architectural variations).

During the escrow process or before making an offer, make sure you are aware of any deed restrictions—often called “restrictive covenants” — before buying to avoid problems later on. The property does not have to be part of a homeowners association to be limited by a developer rule included in a deed.

“Deed restrictions turn up during title searches and a careful reading of the current deed,” a realtor.com® article notes. Anyone who buys the property must abide by the restrictions, even if they were put in place on the land a century ago. Deed restrictions are known for being difficult to change and often take a judicial ruling to invalidate them.

Source: “Building, Buying, or Beefing Up a Home? Watch Out for Annoying Deed Restrictions,” realtor.com® (3/01/17)

Older Americans Face Challenges When Aging

Freddie Mac released today its Insight for February, which outlines challenges, costs and potential solutions of addressing the desire of older Americans to age in place. Survey data shows half of all 55+ Americans and three quarters of 75+ Americans are impacted by at least one physical functional limitation, heightening the growing demand for retrofitting.

Insight Highlights: 1)The Freddie Mac survey of the 55+ population indicates almost two-thirds of homeowners — 43 million people — wish to age in place. 2)Two-thirds of survey participants report their homes are not accessible for someone with arthritis, limited mobility, or in a wheelchair. 3)About 1.5 million older households today need some retrofitting, and that number rises to 2.0 million per year by 2030. 4)If a major retrofit is required, it can be 40 times more expensive than a simple retrofit such as adding some grab bars and new drawer handles. Retrofitting may be too expensive for many of those who wish to age in place.

Don’t Underestimate Power of Pets

Pets are having more of an influence in home buying and selling as well as renovation, a new study by the National Association of REALTORS® shows. Eighty-one percent of Americans say that animal-related considerations play a role when deciding on their next living situation, according to the 2017 Animal House: Remodeling Impact report.

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership ” says NAR President William E. Brown. “REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

99 percent of pet owners say they consider the animal part of the family. Eighty-nine percent of respondents say they would not give up their animal because of housing restrictions or limitations. Home owners are willing to move for their pets too. Twelve percent of pet owners have moved to accommodate their animal; 19 percent would consider moving to accommodate their animal in the future.

Source: National Association of REALTORS®

From Boom to Bust? Farmlands Are In Trouble

Many farmers are facing higher debt as a multiyear drop in prices for corn, wheat, and other commodities plagues on. That is pushing more farmers out of business. The Farm Belt will soon have fewer than 2 million farms, the lowest in years.

Still, economists aren’t predicting the crisis to be as severe as the one that struck the Farm Belt in the 1980s, in which farmland values plummeted and interest rates soared.

Economists expect farmland values to fair much better this time around. After all, farm incomes had record highs in 2013. Many farmers still have significant cash reserves. Plus interest rates are still relatively low.

Lenders say farmers are going through their saving fast. They say younger farmers – without sufficient reserves — and large growers – those who may have expanded too much during the boom years — may be the most vulnerable. Large growers may have accumulated too much debt in recent years as they expanded operations and also locked into multiyear land leases at high rents.

Source: “The Next American Farm Bust Is Upon Us,” The Wall Street Journal (2017)

Survey: Higher Rates Don’t Scare Buyers

Despite mortgage rates reaching a two-year high last week, home buyers say the increases aren’t scaring them away from their real estate search, according to a new Redfin survey. Only 2.6 percent of respondents say they have decided to postpone their search since rates rose above 4 percent.

Twenty-five percent of respondents say the rise in rates does not impact their homebuying decisions, and about 24 percent say they feel a greater sense of urgency to buy before rates go up further. However, 23 percent say the rate increases may prompt them to look in other areas or  buy a smaller home. About 26 percent of buyers say they might take more time with their search and see if rates go back down again.

Source: “Rising Mortgage Rates: Homebuyers Are More Resilient Than You Might Think,” Redfin Blog (Dec. 20, 2016)

Home Loan Rates Move to Higher Averages

Fixed-rate mortgages headed up this week, reaching their highest averages since early summer.

Freddie Mac reports the following national averages for the week ending Nov. 3:

30-year fixed-rate mortgages: averaged 3.54 percent, with an average 0.5 point, rising from last week’s 3.47 percent average. Last year at this time, 30-year rates averaged 3.87 percent.
15-year fixed-rate mortgages: averaged 2.84 percent, with an average 0.5 point, rising from last week’s 2.78 percent average. A year ago, 15-year rates averaged 3.09 percent.

Source: Freddie Mac