Home Loan Interest Rates Inch Slightly Higher

“Treasury yields marched higher this week. As a result, the 30-year mortgage rate jumped 7 basis points to 3.66 percent,” says Sean Becketti, Freddie Mac’s chief economist. “The Federal Reserve’s decision to leave the Federal funds rate unchanged triggered a 9 basis point drop in the 10-year Treasury yield on Wednesday, however the drop occurred too late to impact this week’s survey.”

Freddie Mac reports the following national averages for the week ending April 28:

  • 30-year fixed-rate mortgages: averaged 3.66 percent, with an average 0.6 point, rising from last week’s 3.59 percent average. Last year at this time, 30-year rates averaged 3.68 percent.
  • 15-year fixed-rate mortgages: averaged 2.89 percent, with an average 0.6 point, increasing from last week’s 2.85 percent average. A year ago, 15-year rates averaged 2.94 percent.

Source: Freddie Mac

3 Housing Trends Emerging This Spring

The spring tends to be real estate’s most active season of buying and selling. So what housing trends are emerging right now that you should be aware of? The Street recently took a look at three trends it sees as getting bigger this spring:

1. Inventories are favoring the seller. With a limited number of homes for sale across the country, home sellers have the upper hand as home buyers are forced to compete for limited inventories. Inventories of less expensive “starter homes,” in particular have dropped, which is making it difficult for first-time buyers to break into the market. Home buyers need to be ready to act when they see a home they want.

2. More buyers may consider a new home. Some home buyers may seek greater alternatives to limited inventories and consider building a home and buying new. Ralph McLaughlin, chief economist with Trulia, says there’s a 10-year high for homes being bought off of a plan alone. “Why? The inventory of existing homes continues to fall,” he notes.

3. Buying is cheaper than renting. Seven in 10 respondents of a recent Freddie Mac survey believe it’s cheaper to pay rent than a monthly mortgage on a home. Saving for a down payment may a big hurdle for many. However, studies show that buying trumps renting in 98 of the 100 largest metros in the nation.

Source: “3 Real Estate Trends to Watch This Spring,” The Street (April 20, 2016)

Latest Home Trend Uses Garage Doors

Garage doors are not just for hiding your cars any longer. A growing trend has designers and architects installing garage doors in other places of a home.

The doors are serving as retractable room dividers that separate kitchens from patios, for example. Also, they’re being used on exterior walls. With a press of a remote-control button, home owners can then open up the home’s interior to the outdoors.

The trend is nothing new for beach homes, which for years have been using garage doors to open up homes. But garage-door makers say they’re seeing more demand for garage doors — other than just for the garage — across the country. Vickie Lents with Entrematic, garage-door maker has seen demand for glass garage doors, for example, skyrocket by 75 percent in the past three years.

Garage doors are being made more insulated and with low-e glass and frosted panels to help maintain temperatures.

Source: “Garage-Door Styles That Work Indoors,” The Wall Street Journal (March 29, 2016)

Survey: Real Estate Is the Best Investment

Americans ranked real estate as the best long-term investment, even over stocks and gold, according to a recent Gallup Poll of about 1,000 U.S. adults. Real estate has been the top investment choice for the past two years, and it’s lead is increasing over four other popular investment choices.

Thirty-five percent of Americans selected real estate as their top investment choice compared to 22 percent for stocks and mutual funds; 17 percent for gold; 15 percent for savings accounts/CDs; and 7 percent for bonds. By comparison, 34 percent of Americans said gold was their top long-term investment choice in 2011 while 19 percent said real estate.

“As the average sale price of new homes in the U.S. increased from $259,300 in August 2011 to $348,900 in February of this year, the percentage of Americans picking real estate as the best long-term investment almost doubled,” according to Gallup. “During approximately the same time span—from August 2011 to April of this year—gold prices plunged from $1,910 to $1,254 per ounce, and the percentage thinking gold would be the best investment was cut in half.”

Source: Gallup.com

Mortgage Rates Staying Near Yearly Lows

Home buyers and owners can still lock in low mortgage rates. Freddie Mac reports in its weekly mortgage market survey that rates mostly remained unchanged this week.

“Volatility in financial markets subsided over the past week, allowing Treasury yields to stabilize,” says Sean Becketti, Freddie Mac’s chief economist. “As a result, the 30-year mortgage rate was mostly flat, up only 1 basis point to 3.59 percent. The release of March’s existing-home sales report, which shows monthly growth at 5.1 percent, suggests home buyers are taking advantage of low mortgage rates.”

Freddie Mac reports the following national averages for the week ending April 21:

30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.6 point, rising from last week’s 3.58 percent average. A year ago, 30-year rates averaged 3.65 percent.

15-year fixed-rate mortgages: averaged 2.85 percent, with an average 0.5 point, falling from last week’s 2.86 percent average. Last year at this time, 15-year rates averaged 2.92 percent.

Source: Freddie Mac

Home Sellers See Highest Price Gains in Years

Most home sellers are seeing plenty of equity when selling their home. In March, sellers on average sold for $30,500 more than what they had paid for their home – a 17 percent gain, according to RealtyTrac’s March and First Quarter 2016 Home Sales Report. That marks the highest average price gain for sellers in any month since December 2007, the onset of the Great Recession.

“Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom,” says Daren Blomquist, RealtyTrac senior vice president. “That should encourage more home owners to take advantage of the prime seller’s market and list their homes for sale this year.”

Source: RealtyTrac

Get to Know the ‘Transitional Kitchen’

When it comes to kitchen design, it’s time to throw some of the old traditional rules out and embrace the mix-and-match transitional kitchen approach.

What is a transitional kitchen exactly? It’s a style that equal parts functional and expressive. It accommodates the individual needs of the family, showcases the personality of the home owners, but is also universally appealing and homey. And it’s hotter than ever.

In a recent survey by the National Kitchen and Bath Association, home owners listed the transitional kitchen as their top style pick, beating the traditional kitchen for the first time in many years.

Bottom line: A transitional kitchen at its essence should be functional for owners’ specific needs, but the other main rule is that there are no rules. The days where kitchen design had to solely embrace one style may be over, and buyers and owners alike are looking for a space that mixes and matches elements that reflects their individual personality.

Source: “Elements of Transitional Kitchen Style,” Houselogic.

Factors Boosting Housing Market This Month

Four current housing market factors that will likely translate into greater sales this April:

1. Low mortgage rates: Mortgage rates have moved lower this month and are hovering near the lowest averages in the past three years. Lower mortgage rates help boost home buyers’ purchasing power as well as buyers’ ability to qualify for a mortgage.

2. More urgency: Many buyers were frustrated last year with their inability to buy. This spring, they’re heading to the housing market more determined. Loan applications for purchases are up 20 percent.

3. More searching: Realtor.com® reports a record number of people searching and looking at its website for homes. Nevertheless, there are 2 percent fewer homes for sale that they’ll find when compared to last year.

4. Faster sales: The time that listings spend on the market has dropped dramatically. Nationwide, the median days on the market dropped 14 days in the first two weeks of April compared to the first two weeks of March.

Source: “Mid-April Forecast: Warm Weather Will Bring Out Home Buyers,” realtor.com® (April 15, 2016)

Home Loan Rates Reach a New Low for 2016

The 30-year fixed mortgage rate dipped to its lowest average of the year this week, averaging 3.58 percent, Freddie Mac reports in its latest mortgage market survey.

“Demand for Treasuries remained high this week, driving yields to their lowest point since February,” says Sean Becketti, Freddie Mac’s economist. “In response, the 30-year mortgage rate fell 1 basis point to 3.58 percent. This rate represents yet another low for 2016 and the lowest mark since May 2013.”

Freddie Mac reports the following national averages for the week ending April 14:

  • 30-year fixed-rate mortgages: averaged 3.58 percent, with an average 0.5 point, dropping from last week’s 3.59 percent average. Last year at this time, 30-year rates averaged 3.67 percent.
  • 15-year fixed-rate mortgages: averaged 2.86 percent, with an average 0.5 point, falling from last week’s 2.88 percent average. A year ago, 15-year rates averaged 2.94 percent.

Source: Freddie Mac

Home Owners May Be Too Upbeat About Prices

Home owners may be slightly too optimistic about their home’s value compared to what appraisers say it’s actually worth. Home values are, on average, about 2.17 percent lower than what home owners expect compared to appraisers’ estimates, according to Quicken Loans’ latest Home Price Perception Index (HPPI).

The gap between home owner expectations and appraisal estimates widened in March. In February, appraisals were 1.99 percent lower than what home owners expected.

“The varying HPPI values across the country illustrates the importance of examining the market at the local level,” says Quicken Loans Chief Economist Bob Walters. “If home owners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think – depending on what area of the country they’re in. … It’s not always easy for home owners to keep their finger on the pulse of their equity.”

Source: Quicken Loans