Loan Demand Spikes; Buyers Jump on Rates

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)

Rising Mortgage Rates Won’t Spook Buyers?

Mortgage rates are likely to rise in the coming weeks and many housing analysts have warned that the rises will likely shake the housing market as borrowing costs get more pricey. But the fear of rising rates isn’t concerning home buyers yet, according to a new consumer survey by the real estate brokerage Redfin.

Rising mortgage rates barely appeared in list that ranked the top buyer concerns. In fact, just five percent of consumers surveyed said their buyer concern was that “mortgage rates will go up before I can buy.” But buyers showed much more fear over home prices rising too high (27 percent); too much competition from other buyers (17 percent); not enough for-sale homes to choose from (14 percent); having to sell a home first (8 percent); and not having enough saved for a down payment (6 percent).

Nearly 72 percent of buyers recently surveyed say they expect interest rates to rise in the next six months. But fewer than 7 percent of potential home buyers said they were in a hurry to purchase a home before mortgage rates rose, according to the Redfin survey. Instead, buyers said they were more motivated to buy because of a new child, marriage, or other life event (26 percent); rent fatigue (13 percent); and a belief that real estate is a good investment (10 percent).

Source: “A 5 Percent Mortgage? No Big Deal, Homebuyers Say,” Forbes.com (9/11/15)

Mortgage Rates Up for the First Time This Year

Fixed-rate mortgages reversed course this week, inching up, following weeks of declines, Freddie Mac reports in its weekly mortgage market survey. Still, mortgage rates remained near historical lows with the 30-year fixed-rate mortgage well-below 4 percent this week and the 15-year fixed-rate mortgage remaining under 3 percent.

“Mortgage rates ticked up this week for the first time in 2015 following positive home sales reports,” says Len Kiefer, Freddie Mac’s deputy chief economist. New-home sales jumped 11.6 percent in December, beating market expectations, while existing-home sales rose 2.4 percent to an annual rate of 5.04 million homes in December.

Freddie Mac reports the following national averages for the week ending Jan. 29:

  • 30-year fixed-rate mortgages: averaged 3.66 percent, with an average 0.6 point, increasing from last week’s 3.63 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
  • 15-year fixed-rate mortgages: averaged 2.98 percent, rising from last week’s 2.93 percent average. A year ago, 15-year rates averaged 3.40 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.86 percent, with an average 0.4 point, rising from last week’s 2.83 percent average. Last year at this time, 5-year ARMs averaged 3.12 percent.

Source: Freddie Mac

Improving Economy Helps Buoy Housing

Recent drops in oil prices and mortgage rates, along with positive tailwinds in the economy, are helping to jump-start the housing market in the new year, according to Freddie Mac’s newly released2015 U.S. Economic and Housing Market Outlook for January. Consumers are gaining confidence, which is expected to translate to higher home sales in the coming months. Some economists are skeptical on whether this latest jolt will stick around for the entire year, however.

Freddie Mac economists note that mortgage rates continue to remain well below expectations, and they predict that mortgage rates will remain low at the beginning of 2015, staying around 4 percent for the first two quarters of the year at least. Last week, mortgage rates dipped to a 20-month low with the 30-year fixed-rate mortgage rate plunging to a 3.66 percent national average and the 15-year fixed-rate mortgage dropping to 2.98 percent.

“We … expect these low mortgage rates to help the growing purchase market continue to expand and reach the highest levels we’ve seen since 2007,” the economists note.

But rates likely will move up by the end of the year. Lawrence Yun, chief economist for the National Association of REALTORS®, says that the 30-year fixed-rate mortgage could average around 5 percent – or higher – by the end of this year.

“I would not be surprised if it is above 5 percent because when mortgage rates move or interest rates move, it is generally not in a slow creep,” Yun told Bankrate.com.

Source: “January U.S. Economic & Housing Market Outlook,” Freddie Mac (January 2015) and “Housing Market’s ‘Interesting Times,’” Bankrate.com (Jan. 19, 2015)

Privatizing Mortgage Finance Will Cost Borrowers

If Congress shuts down Fannie Mae and Freddie Mac, borrowers likely will end up paying slightly higher mortgage rates.  Proposed House and Senate bills would wind down the two firms over five years and scale back the government intervention in guaranteeing mortgage securities.

The House GOP bill would virtually privatize the mortgage market, while the Senate’s bipartisan plan would limit Washington’s role in insuring mortgage securities and retain the federal government as an insurer of last resort.  Both plans are meant to shift more mortgage financing risk from the government to the private sector in order to prevent future taxpayer-funded bailouts.

Mark Zandi, chief economist at Moody’s Analytics, suggests that, as a result, typical borrowers could pay about $75 per month in extra interest payments—or about half a percentage point more—under the Senate proposal, and about $135 more under the House plan.  That could be the average on a conforming loan of about $200,000 with a 20 percent down payment.

Closing Fannie, Freddie Could Up Mortgage Rates,” Associated Press (Aug. 8, 2013)

Home Mortgage Rates “Hold Steady This Week”

Mortgage rates remain unchanged this week from last week, staying low and keeping home buyer affordability high, Freddie Mac reports in its mortgage market survey. 

“Mortgage rates were flat to down a little this week amid reports that inflation remains contained,” says Frank Nothaft, Freddie Mac’s chief economist. 

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 17: 

  • 30-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.7 point, dropping from last week’s 3.40 average. A year ago at this time, 30-year rates averaged 3.88 percent. The record low for 30-year rates is 3.31 percent, set on Nov. 21, 2012. 
  • 15-year fixed-rate mortgages: averaged 2.66 percent, with an average 0.7 point, holding the same as last week. Last year at this time, 15-year rates averaged 3.17 percent. 
  • 5-year adjustable-rate mortgages: averaged 2.67 percent, with an average 0.6 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 2.82 percent.

Source: Freddie Mac

Mortgage Rates stay “Near Record Lows”

Fixed-rate mortgages stayed near their record lows this week, serving as attractive incentives for potential home buyers and refinancers.

“Mortgage rates were virtually unchanged this week amid growing concerns around the fiscal cliff,” says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 29:

· 30-year fixed-rate mortgages: averaged 3.32 percent, with an average 0.8 point, up slightly from last week’s record-breaking 3.31 percent average. A year ago, 30-year rates averaged 4 percent. The 30-year fixed-rate mortgage — the most popular choice among home buyers — has averaged below 4 percent for virtually every week in 2012, except for one.

· 15-year fixed-rate mortgages: averaged 2.64 percent, with an average 0.6 point, rising from last week’s record-breaking 2.63 percent average. Last year at this time, 15-year rates averaged 3.30 percent.

· 5-year adjustable-rate mortgages: averaged 2.72 percent, with an average 0.6 point, dropping from last week’s 2.74 percent average. Last year at this time, 5-year ARMs averaged 2.90 percent.

· 1-year ARMs: averaged 2.56 percent, with an average 0.5 point, the same average as last week. A year ago, 1-year ARMs averaged 2.78 percent.

Source: Freddie Mac

Home Mortgage Rates inch “Up Slightly This Week”

Nationwide mortgage rate averages climbed slightly this week but remain near their record lows, Freddie Mac reports in its weekly mortgage market survey.

“Mortgage rates remained relatively unchanged this week and should continue to support the housing market and mortgage refinance,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer looking at the average rates for the week ending Oct. 25:

30-year fixed-rate mortgages: averaged 3.41 percent, with an average 0.7 point, rising from last week’s 3.37 percent average. A year ago, 30-year rates averaged 4.10 percent. The record low for the 30-year mortgage averaged 3.36 percent in recent weeks.

15-year fixed-rate mortgages: averaged 2.72 percent, with an average 0.6 point, rising from last week’s record-breaking 2.66 percent average. Last year at this time, 15-year rates averaged 3.38 percent.

5-year adjustable-rate mortgages: averaged 2.75 percent, with an average 0.6 point, holding the same as last week’s average. Last year at this time, 5-year ARMs averaged 3.08 percent.

Source: Freddie Mac

“Mortgage Rates” Hover Near Record Lows!

Great news ot ahare! Mortgage rates held steady for the most part this week, remaining near all-time record lows set last week, Freddie Mac reports in its weekly market survey.

Here’s a closer look at national mortgage rate averages for the week ending Oct. 11:

•30-year fixed-rate mortgages: averaged 3.39 %, with an average 0.7 point, up slightly from last week’s record low of 3.36 %. A year ago, 30-year rates averaged 4.12 %.

•15-year fixed-rate mortgages: averaged 2.70 %, with an average 0.6 point, up from last week’s record of 2.69 percent. Last year at this time, 15-year rates averaged 3.37 %.

•5-year adjustable-rate mortgages: averaged 2.73 %, with an average 0.6 point, up slightly from last week’s 2.72 percent average. A year ago, 5-year ARMs averaged 3.06 %.

Source: Freddie Mac

Home Mortgage Rates “Reverse Course”

Mortgage rates fell across the board this week, after having inched higher the last few weeks from all-time lows, Freddie Mac reports in its weekly mortgage market survey.

Here’s a closer look at rates for the week ending Aug. 30:

•30-year fixed-rate mortgages: averaged 3.59 percent, with an average 0.6 point, dropping from last week’s 3.66 percent average. A year ago at this time, 30-year rates averaged 4.22 percent.

•15-year fixed-rate mortgages: averaged 2.86 percent, with an average 0.6 point, also down from last week’s 2.89 percent average. Last year at this time, 15-year rates averaged 3.39 percent.

•5-year adjustable-rate mortgages: averaged 2.78 percent, with an average 0.6 point, dropping from last week’s 2.80 percent average. Five-year ARMs averaged 2.96 percent a year ago at this time.

•1-year ARMs: averaged 2.63 percent, with an average 0.4 point, dropping from last week’s 2.66 percent average. A year ago, 1-year ARMs averaged 2.89 percent.

Source: Freddie Mac