Rates Hover Near Record Lows

“The sound and fury of the financial markets continue to warn of an impending recession; however, the silver lining is mortgage demand reached a three-year high this week,” says Sam Khater, Freddie Mac’s chief economist. “The decline in mortgage ratesover the last month is causing a spike in refinancing activity—as homeowners currently have $2 trillion in conventional mortgage loans that are in the money—which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up 7% from a year ago.”

Freddie Mac reports the following national averages for the week ending Aug. 15:

  • 30-year fixed-rate mortgages: averaged 3.60%, with an average 0.5 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.53%.
  • 15-year fixed-rate mortgages: averaged 3.07%, with an average 0.5 point, rising from last week’s 3.05% average. A year ago, 15-year rates averaged 4.01%.
Source: Freddie Mac

Latest Data Shows Housing Clash

Lower mortgage rates are prompting higher demand from home buyers to buy, but they aren’t finding enough homes for sale. Mortgage rates last week reached the lowest average since November 2016.

“July’s data highlight tension in the housing markets between buyers eager to take advantage of lower mortgage rates and potential sellers concerned about slowing price growth,” says George Ratiu, realtor.com®’s senior economist. “The decline in newly listed properties suggests that some would-be sellers are stepping back from the market, during the peak buying season, when most people are searching for their next home.”

July saw flat inventory growth, which realtor.com® researchers say could lead to inventory declines much sooner than originally anticipated. Newly listed properties were down 7% in July compared to a year ago, realtor.com® reports.

Source: realtor.com®

Faith in Real Estate, Not Stocks

Real estate has surpassed stocks as Americans’ favorite long-term investment, according to a nationwide Bankrate survey of about 1,000 respondents. Thirty-one percent of survey respondents named real estate as their favorite investment for building wealth that they don’t need access to for a decade or more. That is the best that real estate has performed on Bankrate’s annual survey in the last seven years. In 2018, stocks were the most popular .

Millennials, at 36%, were the most likely age group to call real estate their top long-term investment choice, according to the survey. Other generations also favored real estate, including generation X (31%), baby boomers (30%), and the silent generation (23%). “Millennials are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than ten years,” says Greg McBride, Bankrate’s chief financial analyst.

Source: “Real Estate Is Back as Americans’ Favorite Long-Term Investment,” Bankrate.com (July 17, 2019)

If You Don’t Like Home Prices, Blame the Labor Shortage

A shortage of subcontractors continues to hit the new-home market, placing upward pressure on home prices, according to the latest reading from the National Association of Home Builders and Wells Fargo Housing Market Index. The index asked builders about specific shortages they’re facing among 15 different occupations.

The labor shortage over the past year has meant builders have had to pay higher wages to attract subcontractors and have faced greater difficulty in completing projects on time. Seventy-five percent of builders surveyed say the shortages have also translated into higher home prices.

Subcontractors index at article source: “Labor Shortages Still Hurting Affordability,” National Association of Home Builders’ Eye on Housing blog (Aug. 5, 2019)

Shop Around for a Mortgage

More than a third of home buyers say they did not shop around before selecting their mortgage lender, according to new findings from Fannie Mae’s National Housing Survey. That may mean they’re missing out in thousands of dollars in savings.

Real estate professionals, with family and friends, may be among the most influential sources of advice regarding lender selection, notes Doug Duncan, Fannie Mae’s chief economist, in a new column at Fannie Mae.

We recommend a local lender knowledgeable about the area and offers a variety of loans should be one source. The agent needs to help buyers get a lender with the right type of loan that best fits them and the subject home.

Source: Fannie Mae

Home Loan Interest Rates Inch Up

After three weeks of mostly staying steady, average mortgage rates rose this week. Rates still remain at multiyear lows, keeping borrowing costs low for those shopping for homes this summer.

“Despite this slight increase in rates, home buyers are taking advantage of the multiyear low rates in droves, which is evident in the consistently higher refinance and purchase application volumes. The improvement in housing demand should provide sufficient momentum for the housing market and economy during the rest of the year,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending July 18:

  • 30-year fixed-rate mortgages: averaged 3.81%, with an average 0.6 point, up from last week’s 3.75%. Last year at this time, 30-year rates averaged 4.52%.
  • 15-year fixed-rate mortgages: averaged 3.23%, with an average 0.5 point, rising from last week’s 3.22% average. A year ago, 15-year rates averaged 4%.
Source: Freddie Mac

Rates Stay Near 3-Year Lows

“The recent stabilization mortgage rates reflects modestly improving U.S. economic data and a more accommodative tone from the Federal Reserve to respond to the rising downside economic risk from trade tensions and soft global economic data. On the housing front, the latest weekly purchase applicationdata suggests home buyer demand continues to rise, which is consistent with the slowly improving real estate data from the last two months,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.5 point, unchanged from last week. Last year at this time, 30-year rates averaged 4.53%.
  • 15-year fixed-rate mortgages: averaged 3.22%, with an average 0.5 point, rising from last week’s 3.18% average. A year ago, 15-year rates averaged 4.02%.
Source: Freddie Mac

New-Home Sales Plunge

While housing affordability has been getting a hand from lower mortgage rates, it didn’t lift new-home sales last month.

Sales of newly built single-family homes under performed in what is traditionally the busiest time of year in the housing sector. New-home sales dropped 7.8% to a seasonally adjusted annual rate of 626,000 units in May, the U.S. Commerce Department reported Tuesday. The number represents signed contracts, not closings.

Overall, the “May numbers are a big surprising given lower mortgage interest rates and solid builder confidence data,” says Robert Dietz, NAHB’s chief economist. “Based on these conditions, we expect June new home sales figures will show a rebound.”

Rates Hover Near 2-Year Lows

Lower mortgage rates are proving to be a boon for home shoppers.

“While the continued drop in mortgage rates has paused, home buyer demand has not,” says Sam Khater, Freddie Mac’s chief economist. “This is evident in increased purchase activity and loan amounts, indicating that home buyers still have the willingness and capacity to purchase homes. Today’s low rates, strong job market, solid wage growth, and consumer confidence are typically important drivers of home sales.”

Freddie Mac reports the following national averages for the week ending June 20:

  • 30-year fixed-rate mortgages: averaged 3.84%, with an average 0.5 point, up from last week’s 3.82% average. Last year at this time, 30-year rates averaged 4.57%.
  • 15-year fixed-rate mortgages: averaged 3.25%, with an average 0.4 point, falling from last week’s 3.26% average. A year ago, 15-year rates averaged 4.04%.
Source: Freddie Mac

Rates Hold at 2-Year Lows

“Mortgage rates were mostly unchanged from last week due to easing of trade tensions with Mexico, which helped stabilize markets,” says Sam Khater, Freddie Mac’s chief economist. “These historically low rates should provide continued opportunities for current homeowners to refinance their mortgages—which combined with new home buyer activity—will help sustain the momentum in the housing market in 2019.”

Freddie Mac reports the following national averages for the week ending June 13:

  • 30-year fixed-rate mortgages: averaged 3.82%, with an average 0.6 point, unchanged from last week. Last year at this time, 30-year rates averaged 4.62%.
  • 15-year fixed-rate mortgages: averaged 3.26%, with an average 0.5 point, dropping from last week’s 3.28% average. A year ago, rates averaged 4.07%.
Source: Freddie Mac