Retirees Still Face Years of Mortgage Payments

Fewer retirees own their home free and clear, as 32 percent of homeowners ages 60 to 70 say it will take them more than another eight years to pay off their mortgage, according to American Financing’s Retirement and Mortgages survey.

However, many say they intend to age in place, with 64 percent indicating they plan to remain in their current home. Seventy-one percent say they would prefer to make home renovations rather than move, even if a health issue affected their mobility and comfort at home. However, 48 percent say they are unsure what they would do if their retirement funds ran low, making modifications questionable?

“With so many older Americans carrying mortgage debt with them later in life—and many expressing uncertainty about their financial future—this could very well prove to be an increasing concern among retirees,” according to American Financing’s report. It highlights several options for retirees, such as refinancing a mortgage or reverse mortgages. The report showed that only 19 percent of respondents knew what a reverse mortgage is.

Source: “Does Your Mortgage Retire With You?” American Financing (2018)

Mortgage Rates Ring in New Year With a Dip

Borrowers kicked off 2018 with a mortgage rate drop.  The 30-year fixed-rate mortgage is now down a quarter of a percentage point from a year ago.

“The 30-year fixed-rate mortgage fell four basis points from a week ago to 3.95 percent in the year’s first survey. Despite increases in short-term interest rates, long-term interest rates remain subdued.”  says Len Kiefer, Freddie Mac’s deputy chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.95 percent, with an average 0.5 point, dropping from last week’s 3.99 percent average. Last year at this time, 30-year rates averaged 4.20 percent.
  • 15-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.5 point, dropping from last week’s 3.44 percent average. A year ago, 15-year ARMs averaged 3.44 percent.

Source: Freddie Mac

Home Loan Interest Rates Up Slightly This Week

“Thirty-year fixed mortgage rates have been bouncing around in a narrow 10 basis points range since October,” says Len Kiefer, Freddie Mac’s chief economist. “The U.S. average 30-year fixed mortgage rate increased 1 basis point to 3.94 percent in this week’s survey. The majority of our survey was completed prior to the surge in long-term interest rates that followed the passage of the tax bill. If those rate increases stick, we’ll likely see higher mortgage rates in next week’s survey.”

Freddie Mac reports the following national averages for the week ending Dec. 21:

  • 30-year fixed-rate mortgages: averaged 3.94 percent, with an average 0.5 point, rising from last week’s 3.93 percent average. Last year at this time, 30-year-rates averaged 4.30 percent.
  • 15-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.5 point, increasing from last week’s 3.36 percent average. A year ago, 15-year rates averaged 3.52 percent.

Source: Freddie Mac

Despite Fed Move, Mortgage Rates Hold Steady

Great News!  Mortgage rates were in a holding pattern this week, even after the Federal Reserve voted Wednesday to hike its benchmark interest rate.

“As widely expected, the Fed increased the federal funds target rate this week for the third time in 2017,” says Len Kiefer, Freddie Mac’s deputy chief economist. “The market had already priced in the rate hike, so long-term interest rates—including mortgage rates—hardly moved.”

Freddie Mac reports the following national averages for the week ending Dec. 14:

  • 30-year fixed-rate mortgages: averaged 3.93 percent, with an average 0.5 point, dropping from last week’s 3.94 percent average. Last year at this time, 30-year rates averaged 4.16 percent.
  • 15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, the same as last week. A year ago, 15-year rates averaged 3.37 percent.

Source: Freddie Mac

Deeper Debt Isn’t Stopping Millennial Buyers

Millennials are taking out the greatest share of all new mortgages and buying homes across price ranges. But a new study also shows they’re going more into debt at an alarming rate.

Realtor.com®’s research team analyzed records for more than 3.2 million mortgages originated from January 2013 to October 2017 and divided it by age groups.

Compared to other generations, millennials are narrowing the gap in the price of homes they’re purchasing. In September, millennials obtained mortgages on homes with a median purchase price of $237,000. Generation Xers (born between 1965 and 1981) purchased homes with mortgages on a median price of $280,000, and baby boomers (born between 1946 and 1964) purchased at $258,000.

Millennials are making down payments nearly as high as Generation Xers. The average down payment for a millennial originated mortgage is 9.1 percent. Gen X buyers have been making down payments of 11 percent, since early 2013.

Source: “Millennials Are Taking Over Real Estate—But They’re Going Deeper Into Debt Too,” realtor.com® (Dec. 5, 2017)

Home Loan Rates Sink Lower This Week

The 30-year fixed-rate mortgage is averaging lower than it did a year ago, and remains well below the 4 percent threshold this week.

“The market implied probability of a Fed rate hike in December neared 100 percent, helping to drive short term interest rates higher,” says Len Kiefer, Freddie Mac’s deputy chief economist.

Freddie Mac reports the following national averages for the week ending Nov. 30:

  • 30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, decreasing from last week’s 3.92 percent average. Last year at this time, the 30-year fixed-rate mortgage averaged 4.08 percent.
  • 15-year fixed-rate mortgages: averaged 3.30 percent, with an average 0.5, down from last week’s 3.32 percent. A year ago, 15-year rates averaged 3.34 percent.

Source: Freddie Mac

FHFA Raises Conforming Home Loan Limits

The Federal Housing Finance Agency announced it will raise its conforming loan limit on Jan. 1, 2018. Mortgage financing giants Fannie Mae and Freddie Mac will allow maximum conforming loan limits for mortgages in most parts of the U.S. to be $453,100.  “El Dorado County, CA.” will be $517,500.

For 10 years, the FHFA had set the conforming loan limit in most places at $417,000. But as home prices started rising, the FHFA bumped up the conforming loan limit in 2017 to $424,100. As prices continued to move higher this year, the FHFA has raised limits again for 2018.

The Housing and Economic Recovery Act requires the conforming loan limit of the government-sponsored entities to be adjusted each year to reflect any changes in the average U.S. home price.

Source: Federal Housing Finance Agency

Lift in Housing Starts Indicates Inventory Relief

Housing starts neared their postrecession high in October, with expectations that the new-home market will soon provide much-needed inventory relief, the Commerce Department reports.

Starts, which reflect combined totals within the single-family and multifamily sectors, jumped 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million. That’s the highest reading for new-home production since October 2016, when starts had reached a high of 1.33 million.

Starts for single-family homes in October increased 5.3 percent last month, reaching a seasonally adjusted annual rate of 877,000. They are now up 8.4 percent from a year ago. Multifamily starts surged nearly 37 percent, reaching 413,000 units in October after a weak September production report.

 

Source: National Association of Home Builders

Rates Hit Pause, Consumers Rush to Lock In?

A slight dip in interest rates last week brought more homeowners and home buyers to the mortgage market. More homeowners were quick to refinance before interest rates rise again, and home buyers were able to lock in lower rates during the week.

The Mortgage Bankers Association reported that total mortgage application volume—which includes for refinancings and home purchases—rose 3.1 percent last week on a seasonally adjusted basis. Mortgage applications, however, still remain 8.5 percent below a year ago.

Additional data at: “Weekly Mortgage Applications Rise as Rates Briefly Fall Back,” CNBC (Nov. 15, 2017)

Mortgage Rates Mostly Flat This Week

Mortgage rates mostly held steady this week after posting a sizable jump last week.

“Following a strong surge last week, rates held relatively flat this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate remained unchanged at 3.94 percent.  The markets’ reaction to the upcoming announcement of the next Fed chair may impact the movement of rates in next week’s survey.”

Freddie mac reports the following national averages for the week ending Nov. 2:

  • 30-year fixed-rate mortgages; averaged 3.94 percent, with an average 0.5 point, the same average as last week. Last year at this time, 30-year rates averaged 3.54 percent.
  • 15-year fixed-rate mortgages: averaged 3.27 percent this week, with an average 0.5 point, rising from last week’s 3.25 percent average. A year ago, 15-year rates averaged 2.84 percent.

Source: Freddie Mac