The 30-year fixed-rate mortgage averaged 3.65 percent this week, remaining near its 2015 low and offering “positive news for potential home buyers in the market this spring,” Freddie Mac reports in its mortgage market survey.
The low rates are helping to provide a boost to loan demand. Mortgage applications for home purchases in 60 of the 100 markets that Freddie Mac tracks in its index are up compared to the same point last year.
Freddie Mac reports the following national averages for the week ending April 23:
- 30-year fixed-rate mortgages: averaged 3.65 percent, with an average 0.6 point, dropping from last week’s 3.67 percent average. Last year at this time, 30-year rates averaged 4.33 percent.
- 15-year fixed-rate mortgages: averaged 2.92 percent, with an average 0.6 point, falling from last week’s 2.94 percent average. A year ago, 15-year rates averaged 3.39 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.84 percent, with an average 0.4 point, dropping from last week’s 2.88 percent average. Last year at this time, 5-year ARMs averaged 3.03 percent.
Source: Freddie Mac
CEOs of the largest companies renting out single-family homes say they plan to raise rents up to 5.7 percent this year. Investors are switching their focus from buying properties to optimizing the revenue from the thousands of properties they bought, taking advantage of the increased demand for rental homes, Bloomberg reports.
“In the 2015 rental season, we’re really seeing the ability to move rents,” David Singelyn, chief executive officer of American Homes 4 Rent—the largest publicly-traded single-family landlord, with about 35,000 homes—said at a recent conference.
“We are focusing aggressively on rent bumps,” says Stephen Schmitz, American Residential Properties CEO. “There’s a supply imbalance in some markets. The same thing that keeps occupancy high also drives rents.” Schmitz says they plan to bump up rental rates by 4 percent on renewals and up to 5.7 percent for new tenants.
Source: “U.S. Single-Family Landlords Are Raising Rents, CEOs Say,” Bloomberg (April 21, 2015)
“We have downsized our first-quarter economic growth expectations in light of several transitory factors that weighed on consumption,” says Doug Duncan, Fannie Mae’s chief economist. “Although some momentum was lost in the first quarter as consumers remained cautious in their spending, perhaps putting an emphasis on repairing their personal balance sheets and replenishing savings, we expect that consumer spending will catch up during the second quarter and continue in subsequent months, supporting our forecast of 2.8 percent growth for the year. We believe this momentum will carry over into the housing market, as well, particularly if strong consumer income growth continues.”
However, Fannie Mae economists caution that there could be some volatility, particularly with consumer spending and the financial markets, leading up to the Federal Reserve’s first expected rate hike in the coming months.
Source: “Q1 Economic Growth Measures Downsized, But Expected to Spring Forward,” Fannie Mae (April 20, 2015)
The decision on whether to renovate or relocate in retirement can be complex and emotional. A recent report revealed that as people edge towards retirement age, the more they value the emotional connection to their home rather than the financial value.
After meeting with remodeling experts, architects, real estate pros, and financial advisors, these remodeling guidelines should be considered:
- Think about how long you plan to stay in the home and spend the money that’s comfortable to continue to enjoy living there.
- Consider the potential consequences of the remodeling plan, so remodelers don’t have to go back and fix previous jobs.
- Talk to a local real estate professional who knows the neighborhood and can advise on features that are currently in demand for potential buyers.
- Focus on features that will improve the curb appeal and the overall value of the home.
Source: “Renovation vs. Relocation in Retirement,” The New York Times (April, 10, 2015) and “Most Americans Want to Move in Retirement,” REALTOR® Magazine Daily News (April 3, 2015)
Fixed-rate mortgages were mostly unchanged this week, remaining near the lowest averages of the year, Freddie Mac reports in its weekly mortgage market survey. Freddie Mac reports the following national averages for the week ending April 16:
- 30-year fixed-rate mortgages: averaged 3.67 percent, with an average 0.7 point, rising slightly from last week’s 3.66 percent average. Last year at this time, 30-year rates averaged 4.27 percent.
- 15-year fixed-rate mortgages: averaged 2.94 percent, with an average 0.5 point, rising from last week’s 2.93 percent average. A year ago, 15-year rates averaged 3.33 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.88 percent this week, with an average 0.5 point, rising from last week’s 2.83 percent average. Last year at this time, 5-year ARMs averaged 3.03 percent.
Source: Freddie Mac
The Consumer Financial Protection Bureau issued guidance on how to provide mortgage applicants with a list of local home ownership counseling organizations. The new guidelines, which overwrite ones originally issued in 2013, offer guidance to lenders on how to provide applicants abroad with home ownership counseling lists; permissible geolocation tools; disclosures; and high-cost mortgage counseling qualifications.
“Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision,” says CFPB Director Richard Cordray. “Housing counselors are a crucial source of that helpful advice. We will continue to work to improve the home-buying experience for customers, and today’s interpretive rule will help industry comply with these important protections.” Your comments?
View CFPB’s full interpretive rule issued at the agency’s website.
Source: Consumer Financial Protection Bureau
Fannie Mae announced a new program that allows first-time home buyers of its properties to receive up to 3 percent of the purchase price in closing cost assistance. On a $150,000 priced home, for example, buyers could receive up to $4,500 in closing cost savings.
Fannie Mae’s HomePath Ready Buyer Program requires eligible buyers to complete an online home buyer education course as well as purchase a HomePath property – the branding that Fannie Mae uses for the foreclosed properties it owns.
The education course buyers are required to take covers the responsibilities of owning a home and the home buying process. The course includes nine, 30-minute sessions and is offered exclusively online.
Visit the Fannie Mae website for information about the HomePath Ready Buyer Program.
Source: “Fannie Mae Launches HomePath Ready Buyer Education Program for First-Time Home Buyers,” Fannie Mae (April 14, 2015)
Home prices can influence a home owner’s child’s future income, according to a new study by the Federal Reserve Bank of Boston.
“If home prices are rising, parents who are home owners may have additional resources to finance a child’s higher education, either because they feel richer or they can borrow against the home’s equity,” Maria Jose Luengo-Prado, a senior economist at the Federal Reserve Bank of Boston, says about the report. “This may allow their children to attend college or attend a higher-ranked [more expensive] school. On the other hand, the effect of rising house prices for parents who are renters is the opposite. Rising housing prices often mean higher housing costs. Rents go up. They may also need to save more money for a down payment to buy a house in the future.”
Source: “Salary Advantage Goes to Children of Homeowners,” The Wall Street Journal (April 12, 2015) Your comments?
Last year, the spring selling season failed to meet market expectations, with sales of new and existing homes in 2014 mostly flat. The dismal selling season last year was most attributed to continued weak consumer confidence, steep home price increases from the previous year, and an uneven economic recovery, The Wall Street Journal reports.
But housing analysts believe 2015 is different. Here are a few reasons why:
- An improved economy: The economy has added 3.1 million jobs in the past year alone. Low gas prices lately have helped to lift consumer confidence.
- Mortgage lending is easing: Lenders have shown signs of easing tight borrowing requirements and costs (see FHA Lowers Its Mortgage Costs and 3% Down Payments May Be Game Changer).
- Boomerang buyers return: Former home owners who had lost their home to foreclosure in the aftermath of the financial crisis have repaired their credit and many are stepping back in to try to qualify to buy a home again.
Source: “Housing Market Sees Hopeful Signs of Spring,” The Wall Street Journal (April 9, 2015)
Average fixed-rate mortgages moved lower this week, amid a weaker than expected jobs report in March, Freddie Mac reports in its weekly mortgage market survey.
“Mortgage rates fell across the board following last week’s disappointing employment report,” says Len Kiefer, Freddie Mac’s deputy chief economist. The U.S. economy added 126,000 new jobs in March, well below market expectations of 247,000 jobs, Kiefer notes.
Freddie Mac reports the following national averages for the week ending April 9:
- 30-year fixed-rate mortgages: averaged 3.66 percent, with an average 0.6 point, dropping from last week’s 3.70 percent average. Last year at this time, 30-year rates averaged 4.34 percent.
- 15-year fixed-rate mortgages: averaged 2.93 percent, with an average 0.6 point, down from a 2.98 percent average last week. A year ago, 15-year rates averaged 3.38 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.83 percent, with an average 0.5 point, dropping from last week’s 2.92 percent. Last year at this time, 5-year ARMs averaged 3.09 percent.
Source: Freddie Mac