Mortgage rates posted a sharp drop last week, which sparked a refinancing rush among home owners, the Mortgage Bankers Association reported Wednesday.
Mortgage application volume, including applications for refinancings and home purchases, surged 9.3 percent week over week on a seasonally adjusted basis.
The gains were almost all attributed to refinancing applications, which posted a 16 percent week-to-week increase. Applications for home purchases rised just 0.2 percent. Still, purchase applications are 25 percent higher than a year ago, the MBA reports.
Source: “Wealthy Borrowers Behind 9.3% Jump in New Mortgages,” CNBC (2/10/16)
Does your home need a more inviting first impression from the outside? Stager Cora Sue Anthony with Antony Staging, says you don’t have to break the bank to get an instant lift to a home’s curb appeal. In fact, in a short video she highlights how spending just $106 on some paint and a new light fixture could instantly amp up a home’s curb appeal.
Here are ‘Four Steps’ that can entice buyers to look at your home:
1. Paint the front door. Try out a bold color – such as red – to get buyers’ attention focused on the door.
2. Paint the mailbox. Try either red or black. Anthony says since she painted the home’s door red in the video example, she painted the mailbox the opposite color – black.
3. Paint the railings. Use black to add depth.
4. Change out the light fixture. Make sure the new light fixture matches the aesthetics of the home’s exterior, but this can dress up the outside while also brightening the space.
Watch the video at realtor.com®.
One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to new data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year, down from 46.6 percent in January 2011.
The number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.
Sharp declines in REO sales is the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.
Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)
For the fifth consecutive week, mortgage rates trended down, surprising even forecasters. The 30-year fixed-rate mortgage is now at its lowest average since April 30, 2015.
“Market volatility — and the associated flight to quality — continued unabated this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate fell 7 basis points as well, to 3.72 percent. Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows. These declines are not what the market anticipated when the Fed raised the Federal funds rate in December.”
Freddie Mac reports the following mortgage rates for the week ending Feb. 4:
- 30-year fixed-rate mortgages: averaged 3.72 percent, with an average 0.6 point, dropping from last week’s 3.79 percent average. A year ago, 30-year rates averaged 3.59 percent.
- 15-year fixed-rate mortgages: averaged 3.01 percent, with an average 0.5 point, falling from last week’s 3.07 percent average. Last year at this time, 15-year rates averaged 2.92 percent.
Source: Freddie Mac and “Market Now Predicts ZERO Fed Hikes in 2016,” CNNMoney (Feb. 3, 2016)
As home values rise, more home owners are tapping into their equity with cash-out mortgage refinances. But they’re not taking out nearly as much as they did in the past.
The average amount taken out by owners was more than $60,000. According to Black Knight Financial Services, the average loan-to-value ratio after the refinance was 67 percent – the lowest level ever. On average, borrowers then left 33 percent of equity still in the home after the cash-out refinance.
Forty-two percent of mortgage refinances last fall had borrowers who took cash out of their homes and did not refinance just to get a lower interest rate – the highest share since 2008, CNBC points out.
Source: “Owners Cautiously Taking Cash Out of Homes,” CNBC (Feb. 1, 2016)
The infamous groundhog – Pennsylvania’s Punxsutawney Phil – may not only have the power to predict how many more weeks are left to winter but also the ability to predict the start to housing’s busiest time of year.
Phil didn’t see his shadow on Tuesday’s Groundhog Day, which, if superstition holds true, means that winter will be shorter this year, with a warmer February across the country.
If the groundhog is correct, Jonathan Smoke, realtor.com®’s chief economist, says, that could spark an early start to the spring homebuying season.
“When the housing market is strong like it is now, and Phil doesn’t see his shadow, February sees an average 11 percent year-over-year increase in existing-home sales,” Smoke continues. “Thanks to Punxsutawney Phil, we know that the spring housing market starts early this year — and buyers and sellers had better be ready.”
Source: “Guess What? Spring Home Buying Starts Now (Thanks, Punxsutawney Phil!)” realtor.com® (Feb. 2, 2016)
According to RealtyTrac, here are some characteristics of seriously underwater properties as of the end of 2015:
- 41% were non-owner occupied; 59% were owner-occupied;
- 57% had been owned 10 years or less; 43% had been owned more than 10 years;
- 63% had a loan originated in 2008 or earlier; 37% had a loan originated in 2009 or later;
- 33% of all properties valued $100,000 or less were seriously underwater; 8.7% of properties valued more than $100,000 were seriously underwater.
“The yield on the 10-year Treasury stabilized around 2 percent this week, and the 30-year mortgage rate dipped 2 basis points to 3.79 percent,” says Sean Becketti, Freddie Mac’s chief economist. “The recent market turmoil has given the Fed pause. As was universally expected, the Fed stood pat this week but kept its options open for a rate increase in March. … A hesitant Fed, sub-4-percent mortgage rates, at least for a little while longer, and strong housing fundamentals should generate a three percent increase in home sales this year.”
Freddie Mac reports the following mortgage rates for the week ending Jan. 28:
Source: Freddie Mac
Mortgage rates fell further last week and home buyers and home refinancers quickly rushed to take advantage. Total mortgage applications — for home purchases and refinances — rose 8.8 percent on a seasonally adjusted basis last week, the Mortgage Bankers Association reports.
“Borrowers are clearly seeing the rate drop as perhaps a last opportunity to seize on historically low rates,” CNBC reports.
Applications for home purchases, viewed as a gauge of future home sales, rose 5 percent week over week and are now 22 percent above a year ago.
Source: “Mortgage Applications Up 8.8% as Buyers Look to Lower Rates,” CNBC (Jan. 27, 2016)
Expenditures for home improvements should see healthy gains in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006.
2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.
For more information about the LIRA, including how it is calculated, please visit the Joint Center for Housing Studies website.