Buyers Prove Sensitive to Mortgage Rates

Even the slightest fluctuations in mortgage rates are having a big impact on application volume. Total mortgage applications, including for refinancings and home purchases, dropped 2.1 percent on a seasonally adjusted basis last week as rates rose slightly, the Mortgage Bankers Association report.

The average 30-year fixed-rate mortgage bumped up to 3.67 percent last week from a 3.64 percent average the previous week, MBA reports. Applications for refinancings dropped 3 percent last week. Still, refinancings are nearly 45 percent higher than the same week a year ago.

Applications for home purchases dropped slightly by 0.3 percent last week and are 7.7 percent higher than a year ago, MBA reports. However, applications for purchases are now at a six-month low.

Source: “Weekly Mortgage Applications Drop 2.1% as Rates Edge Higher,” CNBC (Aug. 24, 2016)

Tiny Homes Are Making a Bigger Mark

Tiny houses are trending bigger nationwide. Interest in small-home living among the public has gained momentum since the recession, and made some Americans crave a simpler, less expensive way to live, according to U.S. News & World Report.

These small homes, often built on a trailer and portable, tend to be under 700 square feet. They tend to cost a fraction of a typical home, as low as $10,000 or up to $100,000, depending on the size.

TV shows are giving viewers a peek at this new type of living, especially on networks that HGTV that have shows featuring small-home living such as “Tiny House Hunters,” “Tiny House Nation,” and “Tiny House, Big Living.”

Source: “The Big Impact of Tiny Homes: How Little Houses Are Changing Real Estate,” U.S. News & World Report (Aug. 5, 2016)

Home Loan Rates Move Even Lower This Week

Fixed-rate mortgages dropped slightly this week compared to the previous week, and continue to hover near all-time lows.

Freddie Mac reports the following national averages for the week ending Aug. 18:

  • 30-year fixed-rate mortgages: averaged 3.43 percent, with an average 0.5 point, dropping from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
  • 15-year fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, dropping from last week’s 2.76 percent average. A year ago, 15-year rates averaged 3.15 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.76 percent, with an average 0.4 point, rising from last week’s 2.74 percent average. A year ago, 5-year ARMs averaged 2.94 percent.

Source: Freddie Mac

Loan Demand Drops Despite Low Rates

Total mortgage activity – including refinances and home purchases – dropped 4 percent last week on a seasonally adjusted basis even though mortgage rates are near all-time lows, the Mortgage Bankers Association reported Wednesday.

“A strong job market and low rates continue to support home sales,” says Michael Fratantoni, MBA’s chief economist. MBA reports the average on the 30-year-fixed rate mortgage remains near all-time lows, decreasing last week to 3.64 percent (from 3.65 percent the previous week).

Source: “Mortgage Applications Fell 4% Even as Rates Sit Near Record Lows,” CNBC (Aug. 17, 2016)

Study Reveals Best Real Estate Pricing Strategy

Set the asking price just below a round number – that’s the best technique for pricing a home for sale, according to new research published in the Journal of Housing Research.

“Our study suggests that by using the just below pricing strategy sellers can price their home slightly higher without driving away potential buyers,” says Eli Beracha, one of the study’s author. “As a result, they end up selling their house for more.”

“We tested the age-old debate concerning the best technique to price a home when listing it for sale,” Seiler says. “We find that using a price just below a round number works best, particularly in connection to the left-most digit in the price. So, $199,000 works better than $200,000.”

Source: “Left Digit in Sales Price Affects Home Buyers Most,” BUILDER (Aug. 11, 2016)

Home Loan Rates Hold Steady This Week

Average fixed-rate mortgages remained near historic lows this week, keeping financing costs lower for home shoppers and home owners looking to refinance.

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

  • 30-year fixed-rate mortgages: averaged 3.45 percent, with an average 0.5 point, rising from last week’s 3.43 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
  • 15-year fixed-rate mortgages: averaged 2.76 percent, with an average 0.5 point, increasing from last week’s 2.74 percent average. A year ago, 15-year rates averaged 3.17 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.74 percent, with an average 0.5 point, increasing from last week’s 2.73 percent average. A year ago, 5-year ARMs averaged 2.93 percent.

Source: Freddie Mac

Who Pays What in Closing Costs: By State

The latest findings come from Bankrate.com’s survey of average closing costs by state. (Note: The survey excludes discount points, taxes, title fees, property insurance, association fees, interest, and other prepaid items in its calculations.)

“Thanks to the new and improved mortgage disclosures that the Consumer Financial Protection Bureau introduced last October, closing cost estimates have become more accurate because they mandate that lenders include all costs ahead of time,” says Holden Lewis, Bankrate.com’s senior mortgage analyst. “This is great for consumers who can now comparison shop with more confidence.”

View a full breakdown of all states and Washington, D.C., to find the average home buyers pay in closing costs.

Source: http://www.bankrate.com/finance/mortgages/closing-costs/closing-costs-by-state.aspx

July Marked a Big Month for Housing

The housing market heated up in July, with several factors favoring buyers this summer.

Jonathan Smoke, realtor.com®’s chief economist, says this summer one of the best in a decade: we’re seeing the highest consumer confidence for a July since 2007, we’ve also had the highest nominal home prices for a July on record, and we’ve had the lowest July mortgage rates on record.

“The good news for would-be buyers who have struggled to find a home or have been outbid in prior attempts is that the balance of power shifts a bit more in your favor in late summer and fall,” Smoke writes in his column at realtor.com®. “This is the time of the year when sales slow down, but inventory is at its peak. That means there are more homes for sale per buyer now, and yet mortgage rates remain close to their all-time lows. The window to enjoy the best summer in a decade for real estate remains open for the well-qualified and those ready to act.”

Source: “Finally, a July to Remember – and to Buy a Home,” realtor.com® (Aug. 4, 2016)

Mortgage Rates Near 2016 Lows Again

After climbing for the last three consecutive weeks, mortgage rates reversed course this week, falling back near the lowest averages of the year.

Freddie Mac reports the following national averages for the week ending Aug. 4:

’30-year’ fixed-rate mortgages: averaged 3.43 percent, with an average 0.5 point, dropping from last week’s 3.48 percent average. A year ago, 30-year rates averaged 3.91 percent.

’15-year’ fixed-rate mortgages: averaged 2.74 percent, with an average 0.5 point, falling from last week’s 2.78 percent average. Last year at this time, 15-year rates averaged 3.13 percent.

Source: Freddie Mac

Buyer Traffic Strong; Sellers Still Hesitant

Housing demand remains strong this summer, even as inventory issues persist in many markets across the country, according to the REALTORS® Confidence Index for June.

Overall housing demand this summer is on the rise due to more jobs being created and by low mortgage costs. According to NAR Research, “Job creation is strongly associated with the demand and supply of homes: strong job growth improves the prospect for home ownership, while job contraction in an area may lead to more homes being sold as people move out of the area.”

More details and national chart at: “Buyer Traffic Continued to Outpace Supply in Many States in April–June 2016,” National Association of REALTORS®’ Economists’ Outlook Blog (Aug. 3, 2016) and REALTORS® Confidence Index