Comeback of ‘Split-Level Homes’

The split-level home—with its rooms on multiple floors—was all the rage in the 1970s, but you don’t see the style as much in contemporary homes. However, that may soon change. Google searches are revealing the split-level home is more in demand.

While the open floor plan is hot, more homeowners have been showing some desire to separate spaces more lately. The split-level blueprint allows for more separation between downstairs and upstairs than other home designs, and also allow for more separated noise and activity between family rooms and bedrooms. It’s also gaining popularity among multigenerational households.

Source: “Surprise! Split-Level Homes Are Becoming Popular Again—and I Know Why,” Apartment Therapy (Oct. 20, 2019)

 

Rates Increased, But Don’t Worry

No reason for home shoppers to get nervous: Economists largely predict mortgage rates will dip in the weeks ahead. Also, rates are still more than a percentage point lower than a year ago.

“Despite this week’s uptick in mortgage rates, the housing market remains on the upswing, with improvement in construction and home sales,” says Sam Khater, Freddie Mac’s chief economist. “While there has been a material weakness in manufacturing and consistent trade uncertainty, other economic trends like employment and homebuilder sentiment are encouraging.”

Freddie Mac reports the following national averages for the week ending Oct. 17:

  • 30-year fixed-rate mortgages: averaged 3.69%, with an average 0.6 point, rising from last week’s 3.57% average. Last year at this time, 30-year rates averaged 4.85%.
  • 15-year fixed-rate mortgages: averaged 3.15%, with an average 0.5 point, rising from a 3.05% average last week. A year ago, they averaged 4.26%..
Source: Freddie Mac

Mortgage Rates ‘Are Dropping’

The 30-year fixed-mortgage fell 8 basis points this week, averaging 3.57%, Freddie Mac reports. The lower rates are drawing out more home buyers in the fall market.

“The 50-year low in the unemployment rate combined with low mortgage rates has led to increased home buyer demand this year. Much of this strength is coming from entry-level buyers—the first-time home buyer share of the loans Freddie Mac purchased in 2019 is 46%, a two-decade high,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Oct. 10:

  • 30-year fixed-rate mortgages: averaged 3.57%, with an average 0.6 point, falling from last week’s 3.65% average. Last year the 30-year rates averaged 4.90%.
  • 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.14% average. A year ago, 15-year rates averaged 4.29%.
Source: Freddie Mac

Home Loan Rates Hold Firm

Home buyers looking for a purchase loan and homeowners who want to refinance are responding well to low mortgage rates. “While mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over 50% from a year ago thanks to increases in both refinance and purchase mortgage applications,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Oct. 3:

  • 30-year fixed-rate mortgages: averaged 3.65%, with an average 0.6 point, up slightly from last week’s 3.64% average. Last year, 30-year rates averaged 4.71%.
  • 15-year fixed-rate mortgages: averaged 3.14%, with an average 0.5 point, falling from last week’s 3.16% average. A year ago, 15-year rates averaged 4.15%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.38%, with an average 0.4 point, unchanged from last week’s average. A year ago, they averaged 4.01%.
Source: Freddie Mac

Qualify for a Appraisal Exemption?

For the first time in 25 years, federal regulators are increasing the property value limit under which buyers of certain homes must obtain an appraisal as part of selling. Federal banking agencies have approved a plan enabling certain homes worth $400,000 or less to be subject to an evaluation rather than an appraisal.

For nearly a year, the Federal Deposit Insurance Corp., office of the comptroller of the currency, and board of governors of the Federal Reserve deliberated on the proposed rule change, reviewing hundreds of comments from the public. Regulators finally approved the rule last Friday. The new rule doesn’t apply to transactions in which the buyer is purchasing the home with financing wholly or partially insured by a government-run or government-sponsored agency, including the Federal Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, and Freddie Mac. As a result, the majority of residential transactions in the U.S. will not be affected by this new rule.

Mortgage Rates Recede Last Week

September has proven to be the most volatile month for the 30-year fixed-rate mortgage since March. Average weekly movement on rates has fluctuated 11 basis points in that time, Freddie Mac reports. This week, mortgage rates fell after posting the largest uptick in nearly a year last week.

Freddie Mac reported national averages for the week ending Sept. 26:

  • 30-year fixed-rate mortgages averaged 3.64%, with an average 0.6 point, falling from last week’s 3.73% average. Last year at this time, rates averaged 4.72%.
  • 15-year fixed-rate mortgages averaged 3.16%, with an average 0.5 point, falling from last week’s 3.21% average. A year ago, 15-year rates averaged 4.16%.
  • 5-year hybrid adjustable-rate mortgages averaged 3.38%, with an average 0.4 point, falling from last week’s 3.49% average. A year ago,  ARMs averaged 3.97%.
Source: Freddie Mac

Home Ownership Market Survey

Low mortgage rates are fueling more favorable opinions on home buying. Nearly two-thirds of Americans—or 63%—believe now is a good time to buy a home, shows the National Association of REALTORS®’ newly released Housing Opportunities and Market Experience Survey, reflecting more than 2,700 consumer responses from the third quarter. Thirty-four percent in the third quarter said they “strongly” believe now is a good time to buy, which is down slightly from the previous quarter.

NAR’s Chief Economist Lawrence Yun offers a cautionary response to the favorable findings. “The fact that slightly fewer are expressing strong intensity compared to recent prior quarters is implying some would-be buyers have concerns about the direction of the economy,” Yun says. Fewer of the respondents—52%—believe the U.S. economy is improving. Millennials tended to be the most pessimistic about the direction over the economy.

Older consumers with higher incomes tended to be the most optimistic over the prospects of homebuying. The silent generation (those born between 1925 and 1945) were the most upbeat about buying at 75%, followed closely by older baby boomers (those born between 1946 and 1954) at 72%, the study showed. Further, 72% of consumers with incomes of $100,000 felt now is a good time to buy compared to 54% of consumers with incomes under $50,000.

Source: “2019 Q3 Homeownership Opportunities and Market Experience (HOME) Survey,” National Association of REALTORS® (Sept. 23, 2019)

Home Loan Rates Increase

Mortgage rates jumped dramatically this week but stand to dip some in the near future after the Federal Reserve lowered interest rates Wednesday. However, despite the uptick, rates remain historically low, Freddie Mac reports.

“Home buyers flocked to lenders with purchase applications, which were up 15 percent from a year ago, and residential construction permits increased 12 percent from a year ago to 1.4 million—the highest level in 12 years. While there was initially a slow response to the overall lower mortgage rate environment this year, it is clear that the housing market is finally improving due to the strong labor market and low mortgage rates,” says Freddie Mac Chief Economist Sam Khater.

Freddie Mac reported the following national averages for the week ending Sept. 19:

  • 30-year fixed-rate mortgages: averaged 3.73%, with an average 0.5 point, rising from last week’s 3.56% average. Last year at this time, they averaged 4.65%.
  • 15-year fixed-rate mortgages: averaged 3.21%, with an average 0.5 point, rising from last week’s 3.09% average. A year ago, 15-year rates averaged 4.11%.
Source: Freddie Mac

 

 

Latest Fed Rate Cut Benefit

The Federal Reserve lowered its benchmark interest rate by another quarter of a percentage point on Wednesday to a range of 1.75% to 2%, citing concerns over a global economic slowdown. Mortgage rates aren’t directly tied to the Fed’s interest rate, but they do tend to be influenced by them.

Still, while mortgage rates remain low, the Fed’s actions Wednesday will likely have little impact, at least initially, in directly bringing rates down more, several economists said after the Fed’s announcement.

Following its meeting, the Fed said that the U.S. economy is in “strong shape and unemployment remains low.” “If the economy does turn down, a more extensive series of rate cuts could be warranted,” Fed Chairman Jerome Powell said at a news conference following the Fed’s meeting.

Flood Insurance Extension Likely

Congress is expected to extend the National Flood Insurance Program before it expires Sept. 30, but less clear is when Congress will turn to meaningful program reforms the National Association of REALTORS® and other housing groups have advocated for years.

Outdated federal flood maps—some of which haven’t been updated in more than 40 years, housing experts warn—may be influencing homeowners not to seek proper flood insurance if they falsely believe they don’t live in a high risk floodplain. NAR has long called on reforming the maps, which the Federal Emergency Management Agency uses to assess flood risk and crisis response.

Source: ‘Too Many People Are in Denial.’ FEMA Urges Homeowners to Buy Flood Insurance,” McClatchy Company (Sept. 12, 2019)