Home Loan Interest Rates Are Hovering Below 4%

Mortgage rates posted another drop this week, offering more relief to home buyers.

Freddie Mac reports the following national averages for the week ending July 27:

’30-year fixed-rate’ mortgages: averaged 3.92 percent, with an average 0.5 point, falling from last week’s 3.96 percent average. Last year at this time, 30-year rates averaged 3.48 percent.

’15-year fixed-rate’ mortgages: averaged 3.20 percent, with an average 0.5 point, dropping from last week’s 3.23 percent average. A year ago, 15-year rates averaged 2.78 percent.

Source: Freddie Mac

After Brief Hike, Mortgage Rates Fall Below 4%

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week.

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending July 20:

  • 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent.
  • 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent.

Source: Freddie Mac

The Real Costs of Tiny Homes

The tiny home movement—homes that often fall within the 100- to 400-square-foot range—is becoming more trendy as owners are drawn to the homes’ minimalism and sliced costs. But buyers may not want to count on cutting their savings by purchasing a tiny home.

A tiny home usually has more costs up front. If you build it yourself, the average cost is about $23,000, according to The Tiny Life. This usually doesn’t include the land price, so buyers will need to pay more to purchase a plot of land or lease land for the home. Additionally, about 68 percent of tiny home owners don’t have a mortgage at all, compared to just 29.3 percent of buyers of traditional homes.

Tiny-home living promotes less spending on utilities as an added perk, but buyers will need to watch those upfront payments as well. Tiny homes often use alternate forms of energy, such as propane, solar energy, or composting. Even for a tiny house, a solar-power system can cost about $8,000, according to The Financial Times.

Source: “Tiny House Living: How Much Money Can You Really Save?” CheatSheet.com (July 11, 2017)

Labor Shortage Causes Headaches for Builders

Buyers eyeing newly constructed homes may need to brace for building delays and higher prices due to an ongoing labor shortage. About two-thirds of homebuilding contractors say they’re struggling to finish projects on time because of the labor shortage, according to a new survey sponsored by USG Corp. and the U.S. Chamber of Commerce. More than one-third say they sometimes have to turn projects down.

“There is reason for concern in the lack of qualified talent,” says Tom Donohue, CEO of the Chamber of Commerce. Further, more construction projects are being started with an insufficient number of workers. Construction spending zoomed to $359.5 billion in the first four months of this year, which is 5.8 percent higher than the same period in 2016, according to Census data.

During the housing downturn, many workers left the industry for other employment and have not returned. Also, the construction workforce is aging ,says Steve Jones, senior director of Dodge Data & Analytics. “You have an aging workforce in an industry that doesn’t lend itself to long careers because it’s hard, physical work, and then you lose a whole bunch of people.”

Source: “Labor Shortage Squeezes Real-Estate Developers,” The Wall Street Journal (June 27, 2017) [Log-in required.]

Home Loan Interest Rates Hold at Low Levels

Home shoppers are getting another week to lock in some of the lowest mortgage rates of the year.  “The 30-year mortgage rate remained relatively flat, falling 1 basis point to 3.90 percent. Mortgage rates are continuing to hold at year-to-date lows amidst ongoing economic uncertainty,” says Sean Becketti, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, dropping from last week’s 3.91 percent average. Last year at this time, 30-year rates averaged 3.56 percent.
  • 15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.5 point, dropping slightly from last week’s 3.18 percent average. A year ago, 15-year rates averaged 2.83 percent.

Source: Freddie Mac

After Steady Decline, ‘Mortgage Rates Rise’

Mortgage rates increased this week for the first time in more than a month, but they still remain near their yearly lows.

Freddie Mac reports the following national averages for the week ending June 15:

  • 30-year fixed-rate mortgages: averaged 3.91 percent, with an average 0.5 point, rising from last week’s 3.89 percent average. Last year at this time, 30-year rates averaged 3.54 percent.
  • 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, increasing from last week’s 3.16 percent average. A year ago, 15-year rates averaged 2.81 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.15 percent, with an average 0.5 point, rising from last week’s 3.11 percent average. A year ago, 5-year ARMs averaged 2.74 percent.

Source: Freddie Mac

There is ‘High Priority on Home Ownership’

More than two-thirds of Americans believe that owning a home is an essential part of the American dream, according to a new survey released by the National Association of Home Builders of more than 11,300 registered voters.

Other recent surveys also have shown a high desire for home ownership, despite the home ownership rate remaining stalled near a historical low of 64 percent. About 80 percent of millennials recently surveyed by rental website Apartment List say they hope to one day buy a home.

However, being able to afford one is the main obstacle, millennials say, that is holding them back. Thirty-six percent of the 24,000 millennial renters born between 1982 and 2004 surveyed said they’ll likely need to wait more than five years.

Source: National Association of Home Builders and “Wannabe Buyers Aren’t Saving Enough,” REALTOR® Magazine (5/30/2017)

Home Loan Interest Rates Are Still Dropping!

Good news, home buyers may want to rush to lock in: The 30-year mortgage rate hit its lowest level in nearly seven months this week, Freddie Mac reports.

Freddie Mac reports the following national averages for the week ending June 8:

  • 30-year fixed-rate mortgages averaged 3.89 percent, with an average 0.5 point, down from last week’s 3.94 percent average. Last year at this time, 30-year rates averaged 3.60 percent.
  • 15-year fixed-rate mortgages averaged 3.16 percent, with an average 0.5 point, dropping from last week’s 3.19 percent average. A year ago, 15-year rates averaged 2.87 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.11 percent, with an average 0.5 point, holding the same average as last week. A year ago, 5-year ARMs averaged 2.82 percent.

Source: Freddie Mac

Renters Admit They Favor Home Ownership

Seventy-two percent of renters “prefer” or “strongly prefer” to own a home rather than rent one, according to the latest SCE Housing Survey conducted by the Federal Reserve Bank of New York.

Nearly 56 percent of renters view homeownership as a “good investment,” the survey finds.

The majority of renters favor homeownership, despite expressing concerns about their ability to one day afford a home. However, they do believe it’s getting easier to qualify for a mortgage. Sixty-five percent of renters say qualifying for a mortgage is “somewhat difficult” or “very difficult,” but that is gradually declining. Twenty percent of renters view qualifying for a mortgage as “somewhat easy” or “very easy,” which is up from 15 percent in 2015.

Source: “Home Price Growth Expectations to Increase: Renters Perceive Easier Access to Mortgage Credit,” Federal Reserve Bank of New York (May 11, 2017)

Mortgage Rates Stuck in Holding Pattern

The 30-year fixed-rate mortgage continues to hover around 4 percent for the fourth week.

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

  • 30-year fixed-rate mortgages: averaged 4.05 percent, with an average 0.5 point, rising from last week’s 4.02 percent average. Last year at this time, 30-year rates averaged 3.57 percent.
  • 15-year fixed-rate mortgages: averaged 3.29 percent, with an average 0.5 point, rising from last week’s 3.27 percent. A year ago, 15-year rates averaged 2.81 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.14 percent, with an average 0.5 point, rising from last week’s 3.13 percent average. Last year at this time, 5-year ARMs averaged 2.78 percent.

Source: Freddie Mac