Mortgage Rates Head Even Lower

Mortgage rates inched lower for the third consecutive week. Freddie Mac Chief Economist Sam Khater says the lower rates bode well for the spring home buying season, typically the busiest time of the year for home shopping.  “Wages are growing on par with home prices for the first time in years, and with more inventory available, spring home sales should help the market begin to recover from the malaise of the last few months.” The National Association of REALTORS® reported this week that more houses were on the market in January, rising to 1.59 million nationwide and at a 3.9-month supply at the current sales pace.

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

  • 30-year fixed-rate mortgages: averaged 4.35 percent ,with an average 0.5 point, dropping from last week’s 4.37 percent average. Last year at this time, 30-year rates averaged 4.40 percent.
  • 15-year fixed-rate mortgages: averaged 3.78 percent, with an average 0.4 point, falling from last week’s 3.81 percent average. A year ago at this time, 15-year rates averaged 3.85 percent.
Source: Freddie Mac

California’s solar mandate cost?

Recently, California became the first state in the nation to make solar mandatory for new houses. Beginning in 2020, newly constructed homes must have solar panels, which could be costly for homeowners: According to California’s Energy Commission (CEC),that mandate will add between $8,000 and $10,000 per home.

CEC estimates suggest that the solar addition will increase the average monthly mortgage payment by $40, but new homeowners will save an average of $80 a month on their heating, cooling and lighting bills.

Source: cnbc.com/2019/02/15/california-solar-panel-mandate

Rates at Lowest Levels in a Year

Cooling inflation and slower global economic growth prompted mortgage rates to drift down this week, Freddie Mac reports.

“While housing activity has clearly softened over the last nine months and the lingering effects of higher rates from last year are still being felt, lower mortgage rates and a strong job market should rekindle demand for the spring home buying season,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 4.37 percent, with an average 0.4 point, dropping from last week’s 4.41 percent average. A year ago, 4.38 percent.
  • 15-year fixed-rate mortgages: averaged 3.81 percent, with an average 0.4 point, falling from last week’s 3.84 percent average. A year ago, 3.84 percent.
Source: Freddie Mac

Homeowners ‘Tax Snags’ Update

Tax season is here, and many homeowners may have questions about what they can and can’t write off under the new tax code.

One big change: Homeowners who used to write off property taxes and interest paid on their mortgage may no longer be able to entirely. But that doesn’t necessarily mean they’ll pay higher taxes. HouseLogic, the National Association of REALTORS®’ consumer-facing website, offers guidance and worksheets on the changes for homeowners.

Under the new law, the standard deduction every tax filer gets has nearly doubled ($24,000 for married couples who file jointly and $12,000 for single filers). Most people likely will be better off taking the standard deduction than itemizing their write-offs.

Other interesting information at: “Tax Deductions for Homeowners: How the New Tax Law Affects Mortgage Interest,” HouseLogic.com (2019) and “Are Closing Costs Tax Deductible Under the New Tax Law?” HouseLogic.com (2019)

Mortgage Rates at 10-Month Low

 “The U.S. economy remains on solid ground, inflation is contained, and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months,” says Sam Khater, Freddie Mac’s chief economist. “This is great news for consumers who will be looking for homes during the upcoming spring home buying season.”

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

  • 30-year fixed-rate mortgages: averaged 4.41 percent, with an average 0.4 point, dropping from last week’s 4.46 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
  • 15-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.4 point, dropping from last week’s 3.89 percent average. A year ago, 15-year rates averaged 3.77 percent.
Source: “Mortgage Rates Drop,” Freddie Mac (Feb. 7, 2019)

Young Adults Living With Parents’

More young adults are still living with their parents and not branching out on their own, and that could have a long-term, negative impact to their finances, according to a new study from the Urban Institute. Researchers found there is no long-term advantage financially for young adults who live with their parents.

The share of young adults aged 25 to 34 who live with their parents rose from nearly 12 percent in 2000 to 22 percent in 2017. Young adults who stayed in their parents’ home longer did not end up buying more expensive homes or have lower mortgage debts later on than those young adults who moved out earlier, the study showed. Researchers say this suggests that “living with parents does not better position young adults for home ownership, a critical source of future wealth, and may have negative long-term consequences for independent household formation.”

Source: “Young Adults Living in Parents’ Basements,” Urban Institute (January 2019)

Mortgage Rates Inch Up, But ‘Don’t Be Worried’

After weeks of moderating, mortgage rates moved up slightly this week. But aspiring home buyers may be able to breathe a sigh of relief: Freddie Mac economists revised their forecasts this week to predict 30-year fixed-rate mortgages to average below the 5 percent threshold for at least the next two years. “However, softening house price appreciation along with increasing inventory of homes on the market and historically low mortgage rates should give a boost to the spring home buying season,” says Sam Khater, Freddie Mac’s chief economist.

The following are the national averages for the week ending Jan. 31:

  • 30-year fixed-rate mortgages: averaged 4.46 percent, with an average 0.5 point, rising from last week’s 4.45 percent average. Last year at this time, 30-year rates averaged 4.22 percent.
  • 15-year fixed-rate mortgages: averaged 3.89 percent, with an average 0.4 point, increasing from last week’s 3.88 percent average. A year ago, 15-year rates averaged 3.68 percent.
Source: Freddie Mac

Hackers Access Data on Loans

Banks are in the process of trying to identify the customers affected and inform them of any possible account hacking.

“These documents contained highly sensitive data, such as Social Security numbers, names, phones, addresses, credit history, and other details which are usually part of a mortgage or credit report,” says security researcher Bob Diachenko, who discovered this.

Consumers are urged to change the passwords on their financial accounts. The database itself that was hacked was not password protected, but in the data theft, hackers may have gained access to personal information that hackers could then use to access a person’s other accounts.

Source: “Fraud Alert: Your Mortgage Info Could Be at Risk,” USA Today (Jan. 23, 2019) and “Document Management Company Left Credit Reports Online,” SecurityDiscovery.com (Jan. 23, 2019)

Will Lower Rates Escalate Sales?

The real estate industry will soon see what kind of impact weeks of declining mortgage rates have had on home sales. Will it provide the boost some experts are predicting?

Since early November, the 30-year fixed-rate mortgage has fallen nearly half a percentage point, from 4.94 percent to 4.45 percent, at the end of this week. This could provide an important incentive for potential home buyers to make a move. The 30-year rate, which didn’t budge in the latest week of reporting, was on a downward trend for six consecutive weeks prior. Existing-home sales in November were already bouncing back from unusually low volume in the summer months, gaining 1.9 percent month over month, due largely to stability in the overall economy, according to data from the National Association of REALTORS®. But when NAR’s data for December existing-home sales is released next Tuesday, it may reveal whether lower mortgage rates have escalated sales gains.

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

  • 30-year fixed-rate mortgages: averaged 4.45 percent, with an average 0.4 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.04 percent.
  • 15-year fixed-rate mortgages: averaged 3.88 percent, with an average 0.4 point, dropping from last week’s 3.89 percent average. A year ago, 15-year rates averaged 3.49 percent.
Source: Freddie Mac; “The slowing U.S. housing market may have finally bottomed,” Yahoo! Finance (Jan. 17, 2019)

Who Will Shape the 2019 Market?

The most popular names in transactions show that women, millennials, and Hispanics are shaping up as dominating forces in the housing market, according to a new analysis from realtor.com®. Ten of the top 20 and seven of the 10 fastest-growing buyer first names are mostly millennial female names, researchers found. Home deeds that contained predominantly millennial first names rose 5.3 percent year over year. Home sales associated with traditionally Hispanic first names increased 4.1 percent year over year.

Hannah, Austin, Alexis, Logan, and Taylor—three of which are predominantly female names—were the five fastest-growing first names on home sales deeds in 2018. Their frequency saw an average increase of 22 percent from 2017. However, the first names of Michael, John, David, James, and Robert remained the top five first names on sale deeds by sheer volume, but those names have decreased 3 to 5 percent since 2017, according to the study.

Source: “Women, Millennials, and Hispanics Will Shape the Future of Housing,” realtor.com® (Jan. 9, 2019)