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)

Loan Rates Fall to 9-Month Lows

Mortgage rates posted more drops this week, lowering the borrowing costs of potential home shoppers and refinancers. “Lower mortgage rates combined with continued income growth and lower energy prices are all positive indicators for consumers that should lead to a firming of home sales,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending Jan. 10:

  • 30-year fixed-rate mortgages: averaged 4.45 percent, with an average 0.5 point, falling from last week’s 4.51 percent average. Last year at this time, 30-year rates averaged 3.99 percent.
  • 15-year fixed-rate mortgages: averaged 3.89 percent, with an average 0.4 point, dropping from last week’s 3.99 percent average. A year ago, 15-year rates averaged 3.44 percent.
Source: Freddie Mac

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)

Home Loan Interest Rates Update!

The new year is kicking off with lower mortgage rates for home shoppers and people looking to refinance their mortgages. The benchmark 30-year fixed-rate mortgage dipped to a 4.51 percent average this week, Freddie Mac reports.

“Low mortgage rates combined with decelerating home price growth should get prospective home buyers excited to buy,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 4.51 percent, with an average 0.5 point, falling from last week’s 4.55 percent average. Last year at this time, 30-year rates averaged 3.95 percent.
  • 15-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.4 point, dropping from last week’s 4.01 percent average. A year ago, 15-year rates averaged 3.38 percent.
Source: Freddie Mac

Holiday Gift: ‘Low Mortgage Rates’

Mortgage rates moderated this week after posting a big drop last week, and the Federal Reserve’s decision on Wednesday to raise its short-term key interest rate hasn’t had much on an effect on rates. (The Fed’s key rate is not directly tied to mortgage rates, but does often influence it.) Now’s the time to start a loan and home search.

Freddie Mac report of mortgage rates for the week ending Dec. 20:

  • 30-year fixed-rate mortgages: averaged 4.62 percent, with an average 0.4 point, dropping slightly from last week’s 4.63 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
  • 15-year fixed-rate mortgages: averaged 4.07 percent, with an average 0.4 point, unchanged from last week. A year ago, 15-year rates averaged 3.38 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.98 percent, with an average 0.3 point, falling from last week’s 4.04 percent average. A year ago, 5-year ARMs averaged 3.39 percent.
Source: Freddie Mac

Mortgage Rates Are Easing

Home buyers may be finding a window of opportunity to lock in lower rates. Mortgage rates fell this week, after several weeks of moderating, Freddie Mac reports.

“Mortgage rates declined this week amid a steep sell-off in U.S. stocks,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac report of mortgage rates for the week ending Dec. 6:

  • 30-year fixed-rate mortgages: averaged 4.75 percent, with an average 0.5 point, down from last week’s 4.81 percent average. Last year at his time, 30-year rates averaged 3.94 percent.
  • 15-year fixed-rate mortgages: averaged 4.21 percent, with an average 0.4 point, falling from last week’s 4.25 percent average. A year ago, 15-year rates averaged 3.36 percent.
Source: Freddie Mac

House Hunts Are Lasting Longer

Buyers are spending significant time trying to find the perfect home. Fifty-four percent of active buyers say they’ve been trying to find the right home for three months or longer, according to the National Association of Home Builders’ Housing Trends Report poll.

Buyers say the biggest delays that are stretching out their home search is they can’t find a home at an affordable price (49%), followed by not being able to find a home with the desired features they want (40%) or in their ideal neighborhood (38%).

Source: “Active Home Buyers Are Spending Significant Amounts of Time Looking for the Right Home,” National Association of Home Builders’ Eye on Housing blog 12/4/18