Rates Hover Near 2-Year Lows

Lower mortgage rates are proving to be a boon for home shoppers.

“While the continued drop in mortgage rates has paused, home buyer demand has not,” says Sam Khater, Freddie Mac’s chief economist. “This is evident in increased purchase activity and loan amounts, indicating that home buyers still have the willingness and capacity to purchase homes. Today’s low rates, strong job market, solid wage growth, and consumer confidence are typically important drivers of home sales.”

Freddie Mac reports the following national averages for the week ending June 20:

  • 30-year fixed-rate mortgages: averaged 3.84%, with an average 0.5 point, up from last week’s 3.82% average. Last year at this time, 30-year rates averaged 4.57%.
  • 15-year fixed-rate mortgages: averaged 3.25%, with an average 0.4 point, falling from last week’s 3.26% average. A year ago, 15-year rates averaged 4.04%.
Source: Freddie Mac

Flood Insurance Extension

The Financial Services Committee of the U.S. House of Representatives voted unanimously on Tuesday to approve a five-year extension to the National Flood Insurance Program, the nation’s largest flood insurer. The bill also includes a mandate to improve the country’s flood maps.

Federal law requires the purchase of flood insurance for a federally backed mortgage in special flood hazard areas designated by FEMA. Private flood insurance is also available in many high-risk areas, but the NFIP may be the only option for some.

The bill will now go before the full House for approval. The Senate must be then approve it to bring it to President Donald Trump.

‘New Frontier’ for ‘Healthy’ Homes

Indoor air quality is one of the top five environmental risks to public health, researchers say. After all, most people spend 90% of their time indoors, whether in homes, office buildings, or other structures. Ventilation is the “new frontier for making houses healthy,” Carl Seville of SK Collaborative, a green building consulting and certification firm, told Forbes.com in a recent article.

There’s reason for the added attention. Recent studies have shown indoor air is polluted with lead, dust mites, radon, pests, carbon monoxide, pet dander, mold, and secondhand smoke, according to the National Environmental Education Foundation. Ventilation in the form of bathroom fans and kitchen range hoods can help remove some of the bad air from homes. Older homes, however, may be prone to leaks of these pollutants.

Source: “Why You Should Take Home Ventilation Seriously,” Forbes.com (May 28, 2019)

Planning for Home Ownership?

When is the right time to purchase your first home? The answer differs across age groups, family pressures and life goals.

One in five parents say they expect their child to own a home by age 25, yet this doesn’t match up to reality. Younger adults tend to feel the most pressure to own a home, but they’re still waiting on their own time terms, according to a new survey from Porch.com, a home remodeling website. Porch.com surveyed nearly 1,000 individuals, ages of 18 to 81.

“Purchasing a home is one of the most complex and expensive decisions most of us make, so it’s easy to see how not choosing the right style, location, or size can invoke criticism from relatives,” the report notes. “Of the three generations, millennials felt the least amount of pressure from relatives when it came to housing choices, whereas both baby boomers and Gen Xers felt slightly more judged.”

Source: “Exploring Generational Differences in Life Goals,” Porch.com (June 4, 2019)

Rates Drop to 2-Year Lows

This marks the sixth consecutive weekly decline for mortgage rates, leaving some borrowers wondering how low will they go. The 30-year fixed-rate mortgage averaged 3.82% this week, the lowest average since September 2017.

“While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates that there can be a wider dispersion among mortgage rate offers,” says Sam Khater, Freddie Mac’s chief economist. “By shopping around and getting a single additional mortgage rate quote, a borrower can save an average of $1,500.”

Freddie Mac reports the following rates for the week ending June 6:

  • 30-year fixed-rate mortgages: averaged 3.82%, with an average 0.5 point, falling from last week’s 3.99%. Last year at this time, 30-year rates averaged 4.54%.
  • 15-year fixed-rate mortgages: averaged 3.28%, with an average 0.5 point, falling from last week’s 3.46% average. A year ago, 15-year rates averaged 4.01%.
Source: Freddie Mac

Homeowners may ‘Benefit from Refinancing’

A recent sharp drop in mortgage rates hasn’t unlocked savings just for those looking to purchase a home—homeowners may also benefit. About 5.9 million borrowers could see their rates drop by at least 75 basis points by refinancing their mortgages, according to Black Knight, a mortgage software and analytics firm. That is up by 2 million in the past month alone.

That’s the largest population of eligible borrower candidates in nearly three years for savings. The savings could add up to about $271 per month per borrower.

The average 30-year fixed-rate mortgage averaged 3.94% in the latest week.

Consider Adding a ‘Granny Flat’

Home improvement professionals say they’re fielding more inquiries from homeowners about adding accessory dwelling units—often nicknamed “granny flats.” A fifth of remodeling contractors say they undertook projects over the last year to create an ADU by converting an existing space, and a similar number say they created an ADU by building a new addition to a property, according to a new survey released by the National Association of Home Builders.

ADUs are smaller units added to a property, and they can be pricey to build. Only 6 percent of remodeling contractors report completing an ADU project for less than $25,000. Three-fourths say ADU projects cost at least $50,000, and 28 percent report projects costing at least $150,000.

Source: “Many Remodelers Are Now Creating ADUs,” National Association of Home Builders’ Eye on Housing blog (May 22, 2019)

Homeowners’ Top Neighborhood Gripes

The wrong neighborhood can make for an unhappy homeowner.

A new survey from Porch.com, a home remodeling website, surveyed about 1,000 consumers to find the biggest neighborhood turnoffs. Noise, traffic, and crime were the chief concerns of buyers. Noise topped the list of neighborhood turnoffs, with 41% of respondents citing it as their top gripe, according to the survey. In fact, noise proved to be an even bigger deterrent than a high crime rate.

More details on illustrations at source: “Moving Matters,” Porch.com (May 2019)

Mortgage Rates ‘Drop This Week’

Following four weeks of rate increases, fixed-rate mortgages posted a drop this week. Rates remain well below their averages from a year ago, and Freddie Mac predicts that will be a boon to home sales over the next couple of months. This comes after the Federal Reserve voted Wednesday not to increase its benchmark rate.

“Moving into summer, we expect rates to be about a quarter to half a percentage point lower than where they were last year, which is good news for the housing market,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending May 2:

  • 30-year fixed-rate mortgages: averaged 4.14%, with an average 0.5 point, falling from last week’s 4.20% percent average. Last year at this time, 30-year rates averaged 4.55%.
  • 15-year fixed-rate mortgages: averaged 3.60%, with an average 0.4 point, dropping from last week’s 3.64% average. A year ago, 15-year rates averaged 4.03%.
Source: Freddie Mac

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