Comeback of ‘Split-Level Homes’

The split-level home—with its rooms on multiple floors—was all the rage in the 1970s, but you don’t see the style as much in contemporary homes. However, that may soon change. Google searches are revealing the split-level home is more in demand.

While the open floor plan is hot, more homeowners have been showing some desire to separate spaces more lately. The split-level blueprint allows for more separation between downstairs and upstairs than other home designs, and also allow for more separated noise and activity between family rooms and bedrooms. It’s also gaining popularity among multigenerational households.

Source: “Surprise! Split-Level Homes Are Becoming Popular Again—and I Know Why,” Apartment Therapy (Oct. 20, 2019)

 

Rates Increased, But Don’t Worry

No reason for home shoppers to get nervous: Economists largely predict mortgage rates will dip in the weeks ahead. Also, rates are still more than a percentage point lower than a year ago.

“Despite this week’s uptick in mortgage rates, the housing market remains on the upswing, with improvement in construction and home sales,” says Sam Khater, Freddie Mac’s chief economist. “While there has been a material weakness in manufacturing and consistent trade uncertainty, other economic trends like employment and homebuilder sentiment are encouraging.”

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

  • 30-year fixed-rate mortgages: averaged 3.69%, with an average 0.6 point, rising from last week’s 3.57% average. Last year at this time, 30-year rates averaged 4.85%.
  • 15-year fixed-rate mortgages: averaged 3.15%, with an average 0.5 point, rising from a 3.05% average last week. A year ago, they averaged 4.26%..
Source: Freddie Mac

HUD Expands Affordable Housing

The U.S. Department of Housing and Urban Development announced this week that it is allocating $112 million to expand the supply of permanent affordable housing to low-income people with disabilities. Funding is available through the Section 811 program.

About half of the new funding will go toward the development of new supportive housing for people with disabilities. About $37 million also will go toward rental assistance, through eligible housing agencies.

“Very simply, we need more permanent supportive housing to assist people living with disabilities,” says HUD Secretary Ben Carson. “The funding will support existing developments and, for the first time in nearly a decade, help to produce new affordable housing at a time we need it the most.”

Source: HUD.gov

Mortgage Rates ‘Are Dropping’

The 30-year fixed-mortgage fell 8 basis points this week, averaging 3.57%, Freddie Mac reports. The lower rates are drawing out more home buyers in the fall market.

“The 50-year low in the unemployment rate combined with low mortgage rates has led to increased home buyer demand this year. Much of this strength is coming from entry-level buyers—the first-time home buyer share of the loans Freddie Mac purchased in 2019 is 46%, a two-decade high,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.57%, with an average 0.6 point, falling from last week’s 3.65% average. Last year the 30-year rates averaged 4.90%.
  • 15-year fixed-rate mortgages: averaged 3.05%, with an average 0.5 point, falling from last week’s 3.14% average. A year ago, 15-year rates averaged 4.29%.
Source: Freddie Mac

Senior Housing Wealth Surges

Homeowners 62 and older are feeling richer thanks to homeownership. Senior housing wealth grew by 0.5%, or $32 billion, in the second quarter, on top of a cumulative $7.17 trillion reached in the first quarter of 2019, the National Reverse Mortgage Lenders Association reports.

Rising home prices are helping to make more homeowners accumulate home wealth at a faster rate. Overall, U.S. homeowners of all ages with a mortgage have seen their equity rise to an all-time high in the first half of 2019, increasing by 4.8% year over year, according to CoreLogic’s recent Home Equity Report. The average homeowner has gained $4,900 in home equity between the second quarter of 2018 and the second quarter of this year, according to the report.

Housing Market Forecast is Bright

Freddie Mac economists predict that the 30-year fixed-rate mortgage will remain below 4% for the remainder of this year, which could continue to bode well for the housing market to ease affordability concerns somewhat for potential buyers.

With lower mortgage rates, economists are predicting that home prices will also moderate, appreciating at 3.4% in 2019, which is in line with long-term growth. Plus, Home Sales Up for Second Consecutive Month and More New Homes Are Entering the Pipeline)

Much of the high demand in the housing market lately has been coming from young adults. “The millennial cohort has now entered the housing market in force and is already driving major changes in buying and selling patterns,” Frank Martell, president and CEO of CoreLogic, said in a statement about its latest housing index that showed home prices moderating.

Source: Freddie Mac

Home Loan Rates Hold Firm

Home buyers looking for a purchase loan and homeowners who want to refinance are responding well to low mortgage rates. “While mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over 50% from a year ago thanks to increases in both refinance and purchase mortgage applications,” says Sam Khater, Freddie Mac’s chief economist.

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

  • 30-year fixed-rate mortgages: averaged 3.65%, with an average 0.6 point, up slightly from last week’s 3.64% average. Last year, 30-year rates averaged 4.71%.
  • 15-year fixed-rate mortgages: averaged 3.14%, with an average 0.5 point, falling from last week’s 3.16% average. A year ago, 15-year rates averaged 4.15%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.38%, with an average 0.4 point, unchanged from last week’s average. A year ago, they averaged 4.01%.
Source: Freddie Mac

Qualify for a Appraisal Exemption?

For the first time in 25 years, federal regulators are increasing the property value limit under which buyers of certain homes must obtain an appraisal as part of selling. Federal banking agencies have approved a plan enabling certain homes worth $400,000 or less to be subject to an evaluation rather than an appraisal.

For nearly a year, the Federal Deposit Insurance Corp., office of the comptroller of the currency, and board of governors of the Federal Reserve deliberated on the proposed rule change, reviewing hundreds of comments from the public. Regulators finally approved the rule last Friday. The new rule doesn’t apply to transactions in which the buyer is purchasing the home with financing wholly or partially insured by a government-run or government-sponsored agency, including the Federal Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, and Freddie Mac. As a result, the majority of residential transactions in the U.S. will not be affected by this new rule.

Mortgage Rates Recede Last Week

September has proven to be the most volatile month for the 30-year fixed-rate mortgage since March. Average weekly movement on rates has fluctuated 11 basis points in that time, Freddie Mac reports. This week, mortgage rates fell after posting the largest uptick in nearly a year last week.

Freddie Mac reported national averages for the week ending Sept. 26:

  • 30-year fixed-rate mortgages averaged 3.64%, with an average 0.6 point, falling from last week’s 3.73% average. Last year at this time, rates averaged 4.72%.
  • 15-year fixed-rate mortgages averaged 3.16%, with an average 0.5 point, falling from last week’s 3.21% average. A year ago, 15-year rates averaged 4.16%.
  • 5-year hybrid adjustable-rate mortgages averaged 3.38%, with an average 0.4 point, falling from last week’s 3.49% average. A year ago,  ARMs averaged 3.97%.
Source: Freddie Mac

Home Ownership Market Survey

Low mortgage rates are fueling more favorable opinions on home buying. Nearly two-thirds of Americans—or 63%—believe now is a good time to buy a home, shows the National Association of REALTORS®’ newly released Housing Opportunities and Market Experience Survey, reflecting more than 2,700 consumer responses from the third quarter. Thirty-four percent in the third quarter said they “strongly” believe now is a good time to buy, which is down slightly from the previous quarter.

NAR’s Chief Economist Lawrence Yun offers a cautionary response to the favorable findings. “The fact that slightly fewer are expressing strong intensity compared to recent prior quarters is implying some would-be buyers have concerns about the direction of the economy,” Yun says. Fewer of the respondents—52%—believe the U.S. economy is improving. Millennials tended to be the most pessimistic about the direction over the economy.

Older consumers with higher incomes tended to be the most optimistic over the prospects of homebuying. The silent generation (those born between 1925 and 1945) were the most upbeat about buying at 75%, followed closely by older baby boomers (those born between 1946 and 1954) at 72%, the study showed. Further, 72% of consumers with incomes of $100,000 felt now is a good time to buy compared to 54% of consumers with incomes under $50,000.

Source: “2019 Q3 Homeownership Opportunities and Market Experience (HOME) Survey,” National Association of REALTORS® (Sept. 23, 2019)