Mortgage Rates Set a New 2017 Low This Week

The 30-year fixed-rate mortgage continues to drop this week, setting a new low for 2017, Freddie Mac reports in its weekly mortgage market survey. For the fourth consecutive week rates have fallen.

Freddie Mac reports the following national averages for the week ending April 13, 2017:

  • 30-year fixed-rate mortgages averaged 4.08 percent, with an average 0.5 point, falling from last week’s 4.10 percent average. A year ago, 30-year rates averaged 3.58 percent.
  • 15-year fixed-rate mortgages averaged 3.34 percent, with an average 0.5 point, falling slightly from last week’s 3.36 percent average. Last year at this time, 15-year rates averaged 2.86 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.18 percent, with an average 0.4 point, falling from last week’s 3.19 percent average. A year ago, 5-year ARMs averaged 2.84 percent.

Source: Freddie Mac

‘Mortgage Rates Surprise’ They Near 2017 Low!

tThe 30-year fixed-rate mortgage dropped lower for the third consecutive week and neared its low for 2017, Freddie Mac reports in its weekly mortgage market survey.

“After three straight weeks of declines, the 30-year mortgage rate is now barely above the 2017 low. Next week’s survey rate may be determined by Friday’s employment report and whether or not it can sustain the strength from earlier this year.” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending April 6, 2017:

30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, falling from last week’s 4.14 percent average. Last year at this time, 30-year rates averaged 3.59 percent.
15-year fixed-rate mortgages: averaged 3.36 percent, with an average 0.5 point, dropping from last week’s 3.39 percent average. A year ago, 15-year rates averaged 2.88 percent.

Source: Freddie Mac

Study: Millennials Hold Off on Big Life Choices

Baby boomers and millennials have different attitudes when it comes to marriage, children, and home ownership. Researchers with the National Center for Family and Marriage Research at Bowling Green State University compared adults who were 25 to 34 years old in the 1980’s with those who are in that age group today. One difference they found is that millennials are getting married later in life. In 1980, two-thirds of 25- to 34-year-old’s were married; in 2015, just two in five were married.

Because baby boomers were more likely to get married younger, they generally left their parents’ home much earlier than millennials. Americans in their late 20s and early 30s who live with their parents or grandparents have more than doubled since 1980, notes researcher Lydia Anderson. In 1980, only 9 percent of 25- to 34-year-olds were living with parents or grandparents compared to 22 percent in 2015.

Millennials are also putting off having children and buying a home. Plus, lag behind baby boomers when it comes to marriage, children, and home ownership, they are more likely to obtain a college degree, the study notes.

Source: “Young Americans Are Killing Marriage,” Bloomberg (April 4, 2017)

Home Prices Blamed for Student Loan Defaults

The housing crisis may also have sparked the increase in student loan default rates, according to a working paper by the National Bureau of Economic Research.

The study says the drop in home prices during the Great Recession also coincided with a 24 to 32 percent rise in student loan default rates. Researchers looked at administrative student loan data along with ZIP code home price data for about 300,000 student loan borrowers in repayment.

Last year, more than 1 million federal student loan borrowers defaulted on their debt.

“The huge rise in student loan defaults is on everybody’s minds and the question is what’s the cause of this rise?” says Holger Mueller, one of the authors of the paper and a professor of finance at New York University’s Stern School of Business. “What we want to do is point to another very important source of default risk and that’s just the labor market.”

Source: “Why Lower Prices Lead to Higher Student Loan Default Rates,” MarketWatch (April 1, 2017)

Company Offers Workers a ‘Delocation’ Package

Companies commonly offer relocation packages for employees who must move for a job, but one firm is providing its workers a “delocation” package—in which they’ll pay employees to move anywhere.

Zapier, a company producing workflow automation tools, says it’s offering the package to new employees living in the San Francisco area in hopes of expanding into new markets in the near future. New employees can choose the city that best fits their needs, and the company will reimburse up to $10,000 in moving expenses incurred during the first three months of work.

“When we first started hiring, we simply hired the best people in our networks—which happened to be outside of Silicon Valley because we’re originally from the Midwest—and the remote aspect continued,” says Wade Foster, CEO of Zapier. The company now has 80-plus employees who all work remotely across 13 countries and 22 states, Foster says. “We found a business model that works for us and incentivizes the best talent to live and work anywhere in the world.”

Source: “This Company Will Pay You to Relocate Wherever You Want,” Forbes.com (April 2, 2017)

Home Loan Interest Rates Got Cheaper This Week

For the second consecutive week, average mortgage rates fell, lowering the borrowing costs.

“The 30-year mortgage rate fell 9 basis points to 4.14 percent, another significant week-over-week decline.” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending March 30:

  • 30-year fixed-rate mortgages averaged 4.14 percent, with an average 0.5 point, falling from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 3.71 percent.
  • 15-year fixed-rate mortgages averaged 3.39 percent, with an average 0.4 point, falling from last week’s 3.44 percent average. A year ago, 15-year rates averaged 2.98 percent.

Source: Freddie Mac

Homeowners Don’t Want Cookie-Cutter Lawns

Homeowners are focused on making changes to their front yards so they’re markedly different from their neighbors’ yards and easier to maintain, finds the 2017 U.S. Houzz Landscaping Trends Survey.

Homeowners want their yards to look distinct. Only 6 percent of homeowners reported front yards that were nearly identical to those in the neighborhood after their outdoor project, compared to more than a third before the update (36 percent), the Houzz survey shows. Two in five owners say they wanted to make a statement with a new front yard that was “very” or “extremely” different from others in the neighborhood following their update.

More homeowners are turning to low-maintenance plants to enhance their front yards, along with native plants and those that attract insects and birds. More than half of those who updated their front yard say that beds or borders, shrubs, and perennials were the most important to improving curb appeal.

Source: “2017 U.S. Houzz Landscaping Trends Survey,” Houzz (March 29, 2017)

This Is the Worst ‘Housing Drought’ Ever

The number of homes for sale is at the lowest level on record, according to the National Association of REALTORS®, who began tracking inventory 18 years ago. That means many home buyers likely will find fewer options this spring, and the homes that are being listed tend to sell fast and at a premium.

The lack of new-home supply is one culprit. Housing starts are only at about 75 percent of their historical average. Builders are focusing on pricier segments of move-up buyers, leaving a big void in the demand for lower cost homes that appeal to first-time home buyers. Builders blame the higher costs for land, labor, and materials as forcing them to concentrate on the higher end of the market.

Builders aren’t the only ones to blame, however. Investors purchased about 4 million distressed properties—mostly in the lower-priced starter home segment—during the housing crash. They have been holding onto these properties, continuing to rent them out rather than selling.

Source: “This Is What’s Behind the Severe Housing Drought,” CNBC (March 23, 2017)

Mortgage Rates Retreat Slightly This Week

The 30-year fixed-rate mortgage decreased slightly, following two months of steady rises.

“The 30-year mortgage rate moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year mortgage rate in over two months, a stark contrast from last week’s jump following the FOMC announcement.” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending March 23:

  • 30-year fixed-rate mortgages: averaged 4.23 percent, with an average 0.5 point, falling from last week’s 4.30 percent average. Last year at this time, 30-year rates averaged 3.71 percent.
  • 15-year fixed-rate mortgages: averaged 3.44 percent, with an average 0.5 point, dropping from last week’s 3.50 percent average. A year ago, 15-year rates averaged 2.96 percent.

Source: Freddie Mac

‘Energy Efficiency’ Weighted More in Appraisals

Energy efficiency scores will soon be included on appraisal forms in a handful of states. Builders are applauding the change, saying that will help give more credit for energy-saving features.

The Home Energy Rating System (HERS) Index is a numerical rating system that measures energy consumption compared to a standard house. The standard house has a score of 100. But a house that has a HERS index of 70, for example, would use 30 percent less energy. A home with a HERS index of 130, on the other hand, would consume 30 percent more energy. As such, the lower the HERS score, the lower the energy costs. The HERS score will be added to an existing green-building addendum that appraisers use.

More details at this source: “A Move Toward More Helpful Appraisals,” Greenbuildingadvisor.com (March 16, 2017)