Mortgage Rates Retreat From 7-Year High

After climbing to their highest level in more than seven years, mortgage rates eased a bit this week. It was the first time they declined in four weeks, says Sam Khater, Freddie Mac’s chief economist. The 30-year fixed-rate mortgage fell 10 basis points to a 4.56 percent average this week.

“Extremely low inventory conditions in most markets are preventing sales from breaking out while also keeping price growth elevated,” Khater says. “Even if rates climb closer to 5 percent, sales have room to grow more—but only if current supply levels start increasing more meaningfully.”

Freddie Mac reports the following national averages for the week ending May 31:

  • 30-year fixed-rate mortgages: averaged 4.56 percent, with an average 0.4 point, down from last week’s 4.66 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
  • 15-year fixed-rate mortgages: averaged 4.06 percent, with an average 0.4 point, dropping from last week’s 4.15 percent average. A year ago, 15-year rates averaged 3.19 percent.

Source: Freddie Mac

Home Loan Interest Rates Update!

“Mortgage rates so far in 2018 have had the most sustained increase to start the year in over 40 years,” says Sam Khater, Freddie Mac’s chief economist. “Through May, rates have risen in 15 out of the first 21 weeks (71 percent), which is the highest share since Freddie Mac began tracking this data for a full year in 1972.”

Freddie Mac reports the following national averages for the week ending May 24:

  • 30-year fixed-rate mortgages: averaged 4.66 percent, with an average 0.4 point, rising from last week’s 4.61 percent average. A year ago, 30-year rates averaged 3.95 percent.
  • 15-year fixed-rate mortgages: averaged 4.15 percent, with an average 0.4 point, rising from last week’s 4.08 percent average. A year ago, 15-year rates averaged 3.19 percent.

Source: Freddie Mac

Legislation to Ease Restrictions on Small Banks

The U.S. House passed a bipartisan bill on Tuesday that will roll back some of the strict rules placed on thousands of small- and medium-sized banks enacted as part of the 2010 Dodd-Frank law.

The Economic Growth, Regulatory Relief, and Consumer Protection Act contains several provisions that could ease mortgage credit through reduced regulatory burdens on smaller community banks and credit unions. The bill also contained several other provisions related to housing. For example, it would require Fannie Mae and Freddie Mac to evaluate and consider credit innovations, like adopting alternative credit scoring models. Currently, the mortgage giants’ credit scoring models do not take into account factors such as whether borrowers have paid their rent or utility bills on time. It also gives the Bureau of Consumer Financial Protection the authority to regulate Property Assessed Clean Energy, or PACE, loans and requires lenders to corroborate a homeowners’ ability to repay the loans that are levied as tax assessments on their homes.

The bill now heads to President Trump for his final signature.

Source: National Association of REALTORS® and “Congress Approves First Big Dodd-Frank Rollback,” The New York Times (May 22, 2018)

 

Mortgage Rates Hit Highest Level in 7 Years

“Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” says Sam Khater, Freddie Mac’s chief economist. “Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

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

  • 30-year fixed-rate mortgages: averaged 4.61 percent, with an average 0.4 point, rising from last week’s 4.55 percent average. Last year at this time, 30-year rates averaged 4.02 percent.
  • 15-year fixed-rate mortgages: averaged 4.08 percent, with an average 0.4 point, increasing from last week’s 4.01 percent average. A year ago, 15-year rates averaged 3.27 percent.

Source: Freddie Mac

Mortgage Rates Barely Stirred This Week

Mortgage rates have mostly taken a pause after a series of rises in April. The 30-year fixed-rate mortgage averaged 4.55 percent last week, unchanged from a week ago.

“The minimal movement of mortgage rates in these last three weeks reflects the current economic nirvana of a tight labor market, solid economic growth, and restrained inflation,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 4.55 percent, with an average 0.5 point, unchanged from a week ago. A year ago, 30-year rates averaged 4.05 percent.
  • 15-year fixed-rate mortgages: averaged 4.01 percent, with an average 0.4 point, falling from last week’s 4.03 percent average. A year ago, 15-year rates averaged 3.29 percent.

Source: Freddie Mac

After April Hikes, Mortgage Rates Slide in May

“While mortgage rates have increased by one-half of a percentage point so far this year, it has not impacted home purchase demand, which continues to grow this spring,” says Sam Khater, Freddie Mac’s chief economist. “The observed buyer resiliency in the face of higher rates reflects the healthy economy and strong consumer confidence, which are important drivers of home sales activity.

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

  • 30-year fixed-rate mortgages: averaged 4.55 percent, with an average 0.5 point, dropping from last week’s 4.58 percent average. Last year at this time, 30-year rates averaged 4.02 percent.
  • 15-year fixed-rate mortgages: averaged 4.03 percent, with an average 0.4 point, rising from last week’s 4.02 percent average. A year ago, 15-year rates averaged 3.27 percent.

Source: Freddie Mac

Home Loan Interest Rates Surge to 4-Year High

“Higher Treasury yields, driven by rising commodity prices, more Treasury issuance’s and the steady stream of solid economic news are behind the uptick in rates over the past week,” says Sam Khater, Freddie Mac’s chief economist. “Despite the increase in borrowing costs, demand for home purchase credit remains solid.” The Mortgage Bankers Association reported that mortgage applications were up 11 percent from a year ago.

Freddie Mac reports the following national averages for the week ending April 26:

  • 30-year fixed-rate mortgages averaged 4.58 percent, with an average 0.5 point, rising from last week’s 4.47 percent average. Last year at this time, 30-year rates averaged 4.03 percent.
  • 15-year fixed-rate mortgages averaged 4.02 percent, with an average 0.4 point, rising from last week’s average of 3.94 percent. A year ago, 15-year fixed-rate mortgages averaged 3.27 percent.

Source: Freddie Mac

‘Nonprime’ Loans Expand Mortgage Options

Subprime mortgages—which were blamed for sparking the last housing crisis—are reappearing, this time being dubbed “nonprime” loans. This lending option, which carries new quality standards, is growing for buyers who have damaged credit.

California-based Carrington Mortgage Services is one company expanding its nonprime loan offerings. “We believe there is actually a market today for people who want to buy nonprime loans that have been properly underwritten,” saysRick Sharga, of Carrington Mortgage Holdings, told CNBC.

Carrington Mortgage Services, which plans to manually underwrite each loan, will qualify borrowers with FICO credit scores as low as 500. The lender also will qualify borrowers who’ve had recent problems reported on their credit histories, such as a foreclosure, bankruptcy, or a history of late payments. But borrowers who are at higher risks will be required to make a bigger down payment, and the interest rate on the loan will be higher.

Other lenders also are getting into the nonprime space, including Angel Oak and Caliber Home Loans; more than 80 percent of Angel Oak loans are nonprime.

Source: “Subprime Mortgagees Make a Comeback—With a New Name and Soaring Demand,” CNBC (April 12, 2018)

Another Week of Mostly Flat Mortgage Rates

Borrowing costs haven’t budged much in recent weeks, offering some relief from the weekly rate increases that had almost become routine at the start of 2018.

“Rates have bounced around 4.4 percent since mid-February. Rates could break out and head higher if inflation continues to firm. … If inflation continues to trend higher, we may see two or three more rate hikes from the Fed this year, and mortgage rates could follow. For now, mortgage rates are still quite low by historical standards, helping to support home buyer affordability as the spring home buying season ramps up.” says Len Kiefer, Freddie Mac’s deputy chief economist.

Freddie Mac reports the following national averages for the week ending April 12:

  • 30-year fixed-rate mortgages averaged 4.42 percent, with an average 0.4 point, up from last week’s 4.40 percent average. Last year at this time, 30-year rates averaged 4.08 percent.
  • 15-year fixed-rate mortgages averaged 3.87 percent, with an average 0.4 point, holding the same average as last week. A year ago, 15-year rates averaged 3.34 percent.

Source: Freddie Mac

Mortgage Interest Rates Ease This Week

Borrowers found some relief for the second consecutive week with lower mortgage rates.

“After dropping earlier this week on trade-related anxiety in financial markets, the benchmark 10-year Treasury stabilized on Wednesday, but at a level slightly lower than from the start of last week,” explains Len Kiefer, Freddie Mac’s deputy chief economist.

Freddie Mac reported the following national averages for the week ending April 5:

  • 30-year fixed-rate mortgages: averaged 4.40 percent, with an average 0.5 point, dropping from last week’s 4.44 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
  • 15-year fixed-rate mortgages: averaged 3.87 percent, with an average 0.4 point, dropping from last week’s 3.90 percent average. A year ago, 15-year rates averaged 3.36 percent.

Source: Freddie Mac