Average fixed mortgage rates continue to fluctuate week-to-week, with the 30-year fixed-rate mortgage dropping below 4 percent this week, offering temporary relief to home buyers and refinancers after hitting its highest average for the year earlier this month, Freddie Mac reports in its weekly mortgage market survey.
Freddie Mac reports the following national averages for the week ending July 30:
- 30-year fixed-rate mortgages: averaged 3.98 percent, with an average 0.6 point, dropping from last week’s 4.04 percent average. A year ago, 30-year rates averaged 4.12 percent. Earlier this month, 30-year rates reached the highest average for the year at 4.09 percent.
- 15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.6 point, dropping below its 3.21 percent average last week. A year ago, 15-year rates averaged 3.23 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.95 percent, with an average 0.4 point, dropping from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.01 percent.
Source: Freddie Mac
Americans traditionally have chosen to downsize in retirement, but that may no longer be the case. A wave of retirees are choosing to upsize and enjoy the best home of their lives in retirement, according to a recent Merrill Lynch and Age Wave retirement study of more than 3,600 respondents. In fact, 65 percent of retirees recently surveyed say they’re currently living in the best home of their lives.
The study showed that 49 percent of retirees say they didn’t downsize in their last move and 30 percent ended up moving into larger homes. Retirees’ top reasons for upsizing were wanting a home large and comfortable enough for family members to visit (33 percent) or even live with them (20 percent). One out of six retirees – or 16 percent – say they have a “boomerang” child who has moved back in with them, according to the study.
Nineteen percent of retirees also said they upsized in retirement in order to have a more prestigious home and 16 percent say they wanted a larger home to have more room for friends to visit, according to the study.
Source: “Home in Retirement: More Freedom, New Choices,” Merrill Lynch (July 2015)
Economic activity is expected to accelerate in the second half of the year, according to Fannie Mae’s Economic & Strategic Research Group.
“We believe consumer spending will be the largest contributor to growth for the remainder of the year, particularly as consumers’ confidence, household net worth, and income growth prospects have continued to strengthen amid an improving jobs market,” says Doug Duncan, Fannie Mae’s chief economist. “On the downside, the drop in oil prices will likely continue to weigh on nonresidential investment in structures, and on balance we expect net exports to be a drag on growth this year, due in large part to the debt crisis in Greece and deteriorating economic conditions in China.”
Fannie Mae economists expect the housing market to remain part of that strength.
Source: Fannie Mae
First-time home buyers have found themselves in a sellers market, faced with above-average price appreciation and bidding wars due to limited inventories of homes for-sale.
But in the second half of the year, the market is expected to shift toward more of a balance as more sellers – motivated by higher home prices – put their homes on the market, alleviating the inventory shortage. This will help provide buyers with more choices of homes to buy as well as likely soften the speed at which home prices are rising.
For potential first-time home buyers, the housing market will soon be more inviting, writes Jonathan Smoke, realtor.com®’s chief economist, in recent commentary. “Combined with a temporary reprieve from rising mortgage rates and slightly easier access to credit, buyers should find it easier to purchase a home in the months ahead,” Smoke says.
Source: “Don’t Lose Faith, Would-Be Home Buyers: It Will Get Better,” realtor.com® (July 23, 2015)
The total amount of time consumers spend on smartphones has surpassed PCs, with more than 50 percent of all digital time now spent on mobile devices, according to data from MarketingLand.com. “Mobile Internet usage is growing faster than Internet usage in general, up 23 percent compared with just 8 percent and, as a whole grew 34 percent year over year, while desktop digital advertising grew 11 percent.”
The findings should inform the way real estate professional present their advertising and listings. After all, 50 percent of home buyers used a mobile website or application in the home buying process last year, according to the National Association of REALTORS®.
While mobile advertising continues to grow, consumers are reporting that advertisements are disrupting their mobile experience. Contextual relevancy is key, according to a Forrester/Tapad report. Twenty-three percent of consumers surveyed say they want ads to be tailored to the content they’re viewing, and 21 percent expect ads to be tailored to their location, according to the report.
Source: “Buyer Behavior Trends Driving the Digital Shift Toward Mobile,” Marketingland.com (June 18, 2015) and “Over 50 Percent of all Digital Time Now Spent on Mobile,” RISMedia (July 21, 2015)
Changes in down payment requirements have more influence over home buyers’ willingness to buy than changes in mortgage rates, according to a new study published by economists at the New York Federal Reserve.
The Fed’s survey of buyers and renters found that the impact of interest rates may be overrated compared to the even the smallest changes in down payment requirements. The study found that dropping the required down payment from 20 percent to 5 percent increases the willingness to purchase, on average, by 15 percent among buyers and 40 percent among renters.
On the other hand, decreasing the interest rate on a 30-year fixed-rate mortgage raised the willingness to purchase a home by only 5 percent, on average. Buyers showed more influence by down payment changes even though the mortgage rate change could save them more money than the lower down payment.
Source: “Down Payments Motivate Buyers More Than Interest Rates,” Real Estate Economy Watch (July 20, 2015)
House hunters are now getting the ability to judge a home in a new way – by its sound level – in a new feature rolling out to House hunters.
A new company called HowLoud is dubbing itself as the WalkScore but for noise. So far, the new tool is only available in Los Angeles and Orange counties, but company officials are raising funds to roll it out nationwide.
HowLoud assigns a value to the noise level of a property based on a numerical scale, factoring in noise-makers like vehicle and airplane traffic. The company recently launched a crowdfunding campaign to roll out its prototype to the rest of the country. So far, the company has raised 40 percent of its $38,000 goal.
Source: “WalkScore, Except for Sound,” Architect (July 10, 2015)
Home owners are expected to increase their home improvement spending expenditures in the next year, says a new study, and recent increases in home equity are partially behind that anticipated surge. Also, a rise in recent home sales activity is a good indicator for the home improvement market, since recent home buyers usually spend about a third more on home improvements than non-movers, even when controlling for age or income differences, according to Harvard University’s Joint Center for Housing Studies’ Leading Indicator of Remodeling Activity.
JCHS has predicted a surge in remodeling on the horizon in the coming years, driven by a rising number of older adults who will want to outfit their homes with more age-in-place home features as well as projects spurred by an aging housing stock.
Source: “Pick-Up Projected in Home Improvement Activity Moving into 2016,” Joint Center for Housing Studies of Harvard University (July 16, 2015)
Fixed-rate mortgages reversed course this week and rose toward the highest level this year, amid ongoing volatility in the bond markets, Freddie Mac reports survey.
The average rate on the 30-year fixed-rate mortgage increased five basis points this week, averaging 4.09 percent, the highest level since October of last year.
Freddie Mac reports the following national averages for the week ending July 16:
- 30-year fixed-rate mortgages: averaged 4.09 percent, with an average 0.6 point, rising form last week’s 4.04 percent average. Last year at this time, 30-year rates averaged 4.13 percent.
- 15-year fixed-rate mortgages: averaged 3.25 percent, with an average 0.6 point, increasing from last week’s 3.20 percent average. A year ago, 15-year rates averaged 3.23 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.96 percent, with an average 0.5 point, increasing from last week’s 2.93 percent average. Last year at this time, 5-year ARMs averaged 2.97 percent.
Source: Freddie Mac
A new survey shows that consumers saving for a home are willing to forego modern conveniences in order to secure a down payment. That may even mean giving up phones, Internet, cable TV, or Starbucks, according to a newly released survey by the business advisory firm the Collingwood Group.
Potential first-time home buyers are making such sacrifices because they want to be able to make a sizable down payment on their home purchase. Nearly two-thirds recently surveyed by TD Bank say they’d like to put 20 percent down or more on their home purchase. The bank polled more than 1,000 consumers who were not home owners but intended to purchase a home within the next five years.
First-time home buyers are increasing their ranks lately, with their share in the housing market rising to 32 percent in May. That matches their highest share since September 2012, according to the National Association of REALTORS®. A year ago, first-time buyers represented 27 percent of all buyers.
Source: TD Bank First-Time Home Buyer Pulse and “Report Says More Millennials Value Home Ownership Over Conveniences,” MReport (July 14, 2015)