Why Home Buyers Need to Hurry

While there have been signs recently that the market may be shifting toward the favor of home buyers, prices are still on the rise in many areas around the country. The median sales price in July was $230,411, up 5.8 percent year over year.

The typical mortgage payment jumped 13.1 percent over that same one-year period, due to a nearly 0.6 percentage point increase in mortgage rates, according to new data from CoreLogic, a real estate research firm.

Rates are expected to increase by about 0.43 percentage points between July 2018 and July 2019. Housing forecasters predict median home sale prices to continue to rise by 1.8 percent in real terms over that same period.

With these projections, CoreLogic researchers predict the inflation-adjusted typical monthly mortgage payment to rise from $937 in July 2018 to $1,003 by July 2019.

Source: “Homebuyers’ ‘Typical Mortgage Payment’ Rising at Twice the Rate of Prices,” CoreLogic Insights Blog (Oct. 17, 2018)

Higher Rates Could Raise Housing Costs 15%

If mortgage rate forecasts pan out, home buyers might see their mortgage payments grow by 15 percent this year, according to a new analysis by CoreLogic, a real estate data firm.

CoreLogic economists predict that mortgage rates will increase by about 0.85 percentage points between November 2017 and November 2018. The median sales price of a home is projected to increase 2.6 percent in real terms over that same period.

Based on that, CoreLogic researchers predict that the inflation-adjusted typical mortgage payment will increase from $804 in November 2017 to $910 by November 2018, a 13.3 percent year-over-year gain. In nominal terms, CoreLogic researchers say the typical mortgage payment’s year-over-year increase would be 15.5 percent.

Source: “Forecast Suggests Homeowners’ ‘Typical Mortgage Payment’ Could Rise Over 15 Percent this Year,” CoreLogic Insights Blog (Feb. 15, 2018)

Predictions Roll in: 2017 Housing Forecasts

We can expect a hot year for home sales in 2017, according to recent forecasts from the National Association of REALTORS®, the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae, etc!

NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.

A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.

Source: “Home Sales Expected to Increase Nicely in 2017,” Keeping Current Matters (Sept. 29, 2016) and “U.S. Housing Market Forecast – Strong 2017 to 2020,” GordinCollins.com (Sept. 24, 2016)

Home Buyers Behind Surge in Loan Demand

The re-fi boom is over. Now it’s time for house hunters to take advantage of record-low mortgage rates. Total mortgage application volume climbed 10 percent last week over the prior week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Much of the increase in mortgage applications in recent weeks has been due to a rise in refinance applications, but in the latest week applications to purchase a home made up most of the climb. Applications for home purchases rose 9 percent from the previous week and are up 24 percent compared to a year ago, MBA reports. Purchase applications are now at the second highest level since May 2010.

Offering a boost to affordability, the average on the 30-year fixed-rate mortgage last week fell to 3.82 percent from 3.86 percent the prior week, MBA reports. That is the lowest average since January 2015.

Source: “Homebuyers Finally Fuel Mortgage Volume, Applications Up 10%,” CNBC (April 13, 2016)

It’s Becoming Easier for Buyers to Get a Mortgage

Lenders are showing signs of loosening up when it comes to home buyers seeking a mortgage. The Mortgage Bankers Association’s Mortgage Credit Availability Index ticked up slight in April, following an increase the previous month too. Increases in the index are indicative of an overall loosening of credit.

MBA’s index shows that mortgage credit availability has increased consistently over the last several months, coinciding with recent announcements from the federal government of programs that have been designed to open the credit box. Fannie Mae and Freddie Mac’s move to back 3 percent down payment loans as well as the Federal Housing Administration’s action to reduce its mortgage insurance premiums have helped ease credit, MBA Chief Mike Fratantoni says.

Other government offerings also helped to ease credit even more in the latest report, reflecting April data, MBA notes.

Source: “MBA: It Keeps Getting Easier to Get a Mortgage,” HousingWire (May 12, 2015) and “REALTORS® Confidence Index,” National Association of REALTORS® (April 2015)

Home Loan Demand Dips As ‘Interest Rates Rise’

A sharp rise in mortgage rates dampened mortgage application volume last week, the Mortgage Bankers Association reports. Total mortgage application volume for both refinancings and home purchases fell 3.5 percent on a seasonally adjusted basis for the week ending May 8. Still, volume is 14 percent higher than a year earlier.

Broken out, applications for refinancings attributed to most of the drop in loan demand last week. Refinancing applications fell 6 percent week-over-week and have fallen 16 percent in the past four weeks alone, MBA reports. Applications for home purchases, which are viewed as a leading indicator of future home sales, mostly held steady last week, down just 0.2 percent from the previous week. Applications for home purchases are 12 percent higher than a year earlier.

MBA reports that the 30-year fixed-rate mortgage rose to 4 percent last week; it had averaged 3.93 percent the week prior.

Source: “Weekly Mortgage Applications Fall 3.5% as Rates Rise,” CNBC (May 13, 2015)

Home Buyers in No Rush to Snag Low Interest Rates

Mortgage rates continue to hover at yearly lows, but home buyers aren’t flocking to lock in the rates. Applications for mortgages dropped 6.6 percent last week for both home purchases and refinances, the Mortgage Bankers Association report.

Broken out, refinancing applications dropped 7.4 percent last week, while applications for home purchases, viewed as a gauge of future home sales, continued its drop, falling 5 percent last week. Last week, home purchase applications had fallen by another 5 percent and were about 9 percent from year-ago levels, the MBA reported.

Meanwhile, the 30-year fixed-rate mortgage continues to stay low by historical standards. The average rate nationwide was 4.13 percent week, up 3 basis points from 4.10 percent the week prior, according to the MBA’s survey, which reflects about 75 percent of the U.S. retail residential mortgage application market.

Source: “U.S. Mortgage Applications Fall in Latest Week as Rates Rise: MBA,” Reuters (Oct. 29, 2014)

Lenders Step Up to Help Veterans Buy Homes

Big banks and mortgage companies are stepping up efforts to help returning vets get affordable housing by advertising the benefits of VA loans as well as donating hundreds of homes mortgage-free to vets.

The Department of Veterans Affairs’ home loan program has soared to record levels, issuing new mortgages at more than double the pace of 2007.  VA-backed mortgages represent about 7 percent of total home-purchase mortgage activity now, up from about 3 percent in 2011, according statistics from the Mortgage Bankers Association. VA-guaranteed mortgages come with zero down payment and flexible credit underwriting. The interest rates are competitive too.

“In an era of extremely tight credit and underwriting in most segments of the marketplace, the VA program looks like an extended hand for creditworthy vets who don’t have large amounts of money to put down on a home purchase or are transitioning into regular employment in the mainstream economy,” the Los Angeles Times notes.

Source: “VA, Lenders, and Nonprofits Mobilize to Help Veterans on the Home Front,” Los Angeles Times (Oct. 26, 2014)

Lower Rates Give Loan Demand Slight Boost

After several weeks of drops in interest rates, mortgage applications finally got a modest lift as refinancers and home buyers took advantage of the dip, CNBC reports.

The Mortgage Bankers Association’s weekly mortgage market index showed that total mortgage application volume rose 2.8 percent during the week ending Aug. 22 compared to a week earlier.

Broken out, applications for refinancings increased 3 percent last week but remain 25 percent below a year ago — even when mortgage rates were higher, MBA reports. Home-purchase mortgage applications also rose 3 percent during the week and remain 11 percent below its rate last year at this time.

The 30-year fixed-rate mortgage fell to 4.28 percent during the week from 4.29 percent the prior week, MBA reports.

Source: “U.S. Mortgage Volume Ekes Out Gain on Tiny Drop in Rates,” CNBC (Aug. 27, 2014)

Refis Tick Up Loan Demand in Latest Week

A drop in mortgage rates renew home owners’ interest in refinancing their mortgage.

The rise in refinancing applications helped to give overall loan demand a boost for the week ending Aug. 15, the Mortgage Bankers Association reports in its weekly mortgage market survey, which reflects 75 percent of the residential mortgage market.

Mortgage application activity, including both loans for refinancings and home purchases, increased 1.4 percent during the week.

Broken out, refinancing applications increased 2.7 percent, while loans for home purchases, viewed as a leading indicator of future home sales, fell 0.4 percent.

The 30-year fixed-rate mortgage averaged 4.29 percent during the week, down 6 basis points from the prior week, the MBA reports.

Source: “U.S. Mortgage Applications Rise in Latest Week: MBA,” Reuters (Aug. 20, 2014)