Mortgage Rate Fluctuations Have Big Impact

Even the slightest movement in mortgage rates can translate into more – or less – purchasing power for home buyers.

John Burns Real Estate Consulting recently looked at how the fluctuation in rates effects the average consumer. The firm found that a typical family earning $60,000 a year could afford around $1,800 month for the mortgage payment.

In 2000, a 30-year fixed-rate loan, which averaged an 8 percent mortgage rate, would have qualified that family for a $245,000 loan.

But at a 4 percent mortgage rate – which current rates are averaging – that same family can qualify for a $377,000 loan.

“In other words, each 1 percent drop in interest rates in the last 15 years has allowed home sellers to raise the price 12 percent,” according to Jon Burns analysis.

Source: “How Tiny Mortgage Rate Moves Can Buy You a Lot,” CNBC (March 10, 2015)

Mortgage Rates at Lowest Point Since May 2013

The 30-year fixed-rate mortgage sunk to a 3.89 % average this week, its lowest level since May 30, 2013. That translates to loan savings for home buyers and refinancers.

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

30-year fixed-rate mortgages: averaged 3.89%, with an average 0.5 point, dropping from last week’s 3.97% average. Last year at this time, 30-year rates averaged 4.46%.

15-year fixed-rate mortgages: averaged 3.10 percent, with an average 0.5 point, dropping from last week’s 3.17 percent average. A year ago, 15-year rates averaged 3.47 percent.

5-year hybrid adjustable-rate mortgages: averaged 2.94%, with an average 0.5 point, dropping from last week’s 3.01% average. Last year at this time, averaged 2.99%.

Source: Freddie Mac

Mortgage Rates Still Near Yearly Lows

The 30-year fixed-rate mortgage is hovering around 4 percent. This has been keeping borrowing costs low for refinancers and home buyers for the last few weeks, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reported the following national averages for the week ending Nov. 13:

  • 30-year fixed-rate mortgages averaged 4.01 percent, with an average 0.5 point, dropping from last week’s 4.02 percent. A year ago, 30-year rates averaged 4.35 percent.
  • 15-year fixed-rate mortgages averaged 3.2 percent, with an average 0.5 point, dropping from last week’s 3.21 percent average. Last year at this time, 15-year rates averaged 3.35 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.02 percent, with an average 0.5. point, rising from last week’s 2.97 percent average. A year ago, 5-year ARMs averaged 3.01 percent.

Source: Freddie Mac

Mortgage Rates Dip Below 4% Threshold

Borrowing costs sank to the lowest amounts in more than a year as the 30-year-fixed rate mortgage averaged 3.97 percent this week, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage is at its lowest average since the week of June 20, 2013, when it averaged 3.93 percent.

“Mortgage rates were down sharply following the decline in the 10-year Treasury yield for the second straight week,” says Frank Nothaft, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Oct. 16:

  • 30-year fixed-rate mortgages: averaged 3.97 percent, with an average 0.5 point, posting a big drop from last week’s 4.12 percent. A year ago, 30-year rates averaged 4.28 percent.
  • 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, dropping from last week’s 3.30 percent average. Last year at this time, 15-year rates averaged 3.33 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.5 point, dropping from last week’s 3.05 percent average. A year ago, 5-year ARMs averaged 3.07 percent.

Source: Freddie Mac

Borrowing Costs Ease Slightly This Week

Fixed-rate mortgages dropped slightly from the previous week, holding near yearly lows, Freddie Mac reports in its weekly mortgage report.

Freddie Mac released the following mortgage rates for the week ending Sept. 25:

  • 30-year fixed-rate mortgages: averaged 4.20 percent, with an average 0.5 point, dropping from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
  • 15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, dropping from last week’s 3.37 percent average. A year ago, 15-year rates averaged 3.37 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.08 percent, with an average 0.4 point, rising from last week’s 3.06 percent average. Last year at this time, 5-year ARMs averaged 3.07 percent.

Source: Freddie Mac

FICO Scoring Changes May Help More Qualify for Loans

FICO, the nation’s most popular credit-scoring system, announced it is tweaking some of the criteria used in coming up with consumers’ scores, which could help consumers save more money in qualifying for mortgages and other types of loans.

The changes include reducing the toll that overdue medical bills can take on credit scores, as well as removing other past penalties from consumers who have paid off debts that had been assigned to collection agencies. A consumer whose only major delinquency comes from an unpaid medical bill could see their credit score rise by 25 points due to the changes.

The changes come after a recent Consumer Financial Protection Bureau study, which found that both paid and unpaid medical debts were unfairly penalizing consumers’ credit ratings. An estimated 64 million Americans have a medical collection item on their credit reports, according to Nick Clements of Magnify Money, a personal finance site.

The FICO changes will go into effect this fall, but borrowers may have to wait a year or more until they see the impact of the changes in their scores, lenders say.

The changes may help consumers with blemished past credit histories or high medical debts qualify for mortgages more easily. Consumers with higher scores also might qualify for a lower rate, housing experts say.

Source: “New FICO Criteria Could Help Borrowers,” Los Angeles Times (Aug. 8. 2014) and “Experian, TransUnion Start Adding Rent Payment Data to Credit Profiles,” Los Angeles Times (Aug. 10, 2014)

 

Mortgage Rates to Enter New Year ‘Mostly Flat’

Fixed-rate mortgages changed little this week heading into the end of the year, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reports the following mortgage rates for the week ending Dec. 26:

  • 30-year fixed-rate mortgages averaged 4.48 percent, with an average 0.7 point, rising from last week’s 4.47 percent average. Last year at this time, 30-year fixed-rate mortgages averaged 3.35 percent.
  • 15-year fixed-rate mortgages averaged 3.52 percent, with an average 0.7 point, increasing slightly from last week’s 3.51 percent average. Last year at this time, 15-year rates averaged 2.65 percent.
  • 5-year hybrid adjustable-rate mortgages (ARMs) averaged 3 percent, with an average 0.4 point, rising from last week’s 2.96 percent average. A year ago, 5-year ARMs averaged 2.7 percent.

Source: Freddie Mac

‘Rates Move Higher’ for the First Time in Three Weeks

Mortgage rates reversed course this week, moving upwards for the first time in three weeks amid more positive economic data, Freddie Mac reports in its weekly mortgage market survey. Production in the manufacturing industry and non-manufacturing sector alike showed signs of expanding.

Freddie Mac reports the following national averages for the week ending Nov. 7:

  • 30-year fixed-rate mortgages: averaged 4.16 percent, with an average 0.8 point, rising from last week’s 4.10 percent average. Last year at this time, 30-year rates averaged 3.40 percent.
  • 15-year fixed-rate mortgages: averaged 3.27 percent, with an average 0.7 point, rising from last week’s 3.20 percent average. A year ago, 15-year rates averaged 2.69 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.96 percent, with an average 0.5 point, holding the same average as last week. Last year at this time, 5 year ARMs averaged 2.73 percent.
  • 1-year ARMs: averaged 2.61 percent, with an average 0.5 point, dropping from last week’s 2.64 percent average. A year ago, 1-year ARMs averaged 2.59 percent.

Source: Freddie Mac

‘3 Hurdles’ Home Sales are Facing

Existing-home sales are hitting a snag because of several constraints that the housing market is grappling with, according to the National Association of REALTORS®’ latest housing report. NAR officials note several challenges for the housing recovery:

  1. Less Affordability: “Affordability has fallen to a five-year low as home-price increases easily outpaced income growth,” says Lawrence Yun, NAR’s chief economist. “Expected rising mortgage interest rates will further lower affordability in upcoming months.” Interest rates for 30-year fixed-rate mortgages increased to 4.49 percent in September from 4.46 percent in August, according to Freddie Mac. Rates are at the highest level since July 2011. Just a year ago, 30-year rates averaged 3.47 percent.
  2. Government shutdown: The effects that the 16-day federal government shutdown had on the housing market will likely be revealed in next month’s housing report, NAR says. “Just one impact of the recent government shutdown — delays in tax transcripts needed for approval of mortgage loans — put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report,” says NAR 2013 President Gary Thomas.
  3. Rising flood insurance premiums: Higher flood insurance rates went into effect Oct. 1 and could impact future sales in flood zones, NAR reports. The Biggert-Waters Act gradually removes and reduces federal subsidies for flood insurance on more than a million homes nationwide. It has caused premiums for flood insurance to skyrocket in some areas. “REALTORS® report that approximately 10 percent of transactions in September were located in flood zones, and that nearly one out of 10 of those transactions were delayed or canceled due to concerns over rising insurance rates,” NAR’s report says.

Information to share: by Melissa Dittmann Tracey, NAR

Gov’t Shutdown Pushes ‘Mortgage Rates Down’

As a result of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week, Freddie Mac reports, ending at their lowest averages in nearly four months.

Retreating interest rates are generally good news for home buyers, however, the University of Michigan reports that consumer sentiment is at its lowest since April.

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

  • 30-year fixed-rate mortgages: averaged 4.22 percent, with an average 0.7 point, dropping from last week’s 4.32 percent average. Last year at this time, 30-year rates averaged 3.36 percent.
  • 15-year fixed-rate mortgages: averaged 3.29 percent, with an average 0.7 point, dropping from last week’s 3.37 percent average. Last year at this time, 15-year rates averaged 2.69 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.03 percent, with an average 0.6 point, dropping from last week’s 3.07 percent average. Last year at this time, 5-year ARMs averaged 2.72 percent.

Source: NARFreddie Mac