Will These Lower Interest Rates Entice Buyers?

Fixed-rate mortgages continued to drop this week, lowering borrowing costs for home buyers.

“Following a mild decline last week, the 10-year Treasury yield rose 1 basis point this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate similarly remained relatively flat, falling just 1 basis point to 3.89 percent. Mortgage rates are continuing to hold at low levels.”

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

  • 30-year fixed rate mortgages: averaged 3.89 percent, with an average 0.4 point, dropping from last week’s 3.90 percent average. Last year at this time, 30-year rates averaged 3.43 percent.
  • 15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.5 point, falling from last week’s 3.18 percent average. A year ago, 15-year rates averaged 2.74 percent.

Source: Freddie Mac

NAHB: Home Building Shortage Is Getting Worse

The inventory of for-sale homes has struck a 20-year low. And while economists and the public cry for more inventory, many builders are pressed to meet demand. A labor and subcontractor shortage in the building industry has worsened over the past year, according to the National Association of Home Builders/Wells Fargo Housing Market Index survey of single-family builders.

The NAHB posits that some workers who were laid off during the housing downturn never returned to the building industry or went to work for larger firms.

Builders reported widespread shortages for each of the 15 occupations surveyed as reflected by a chart in the following article source: “Share of Builders Reporting Labor Shortages Rises Again,” National Association of Home Builders’ (NAHB) Eye on Housing blog (Aug. 14, 2017)

Mortgage Rates at Lowest Point in 6 Weeks

The 30-year fixed-rate mortgage reversed course this week, averaging 3.90 percent.

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

  • 30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, dropping from last week’s 3.93 percent average. Last year at this time, 30-year rates averaged 3.45 percent.
  • 15-year fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, the same average as last week. A year ago, 15-year rates averaged 2.76 percent.

Source: Freddie Mac

A Cruel Season for Home Buyers

Typically, the housing market starts to slow in late summer, and prices drop slightly. But so far this year that hasn’t been the case.

“Homes are not selling faster than last July, but faster than last year’s peak months,” says Javier Vivas, manager of economic research at realtor.com®. “However, quick sales don’t necessarily mean more sales, particularly when there isn’t enough inventory, as is the current case. Home prices also remain stubbornly high, failing to show hints of the usual seasonal cool down. Low and moderately priced homes are being snatched up especially quickly, keeping many would-be buyers from being able to get into the market.”

“In this market, home buyers have to move fast, yet high prices and low inventory are slowing down even the most earnest of house hunters,” Nela Richardson, Redfin’s chief economist, told CNBC. “Faced with a low supply of homes for sale and extremely competitive conditions, many home buyers are struggling to make it to the offer stage.”

Source: “Housing Demand Strengthens Through Summer, But Here’s Why Some Buyers Are Giving Up,” CNBC (Aug. 2, 2017)

Home Loan Interest Rates Aren’t Budging

Mortgage rates have mostly held steady the past few weeks, with the 30-year fixed-rate loan still averaging below 4 percent.

“The 10-year Treasury yield was relatively flat this week, as was the 30-year mortgage rate, which rose 1 basis point to 3.93 percent,” says Sean Becketti, Freddie Mac’s chief economist.

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

’30-year’ fixed-rate mortgages: averaged 3.93 percent, with an average 0.5 point, rising from a 3.92 percent average. Last year at this time, 30-year rates averaged 3.43 percent.

’15-year’ fixed-rate mortgages: averaged 3.18 percent, with an average 0.5 point, dropping from last week’s 3.20 percent average. A year ago, 15-year rates averaged 2.74 percent.

Source: Freddie Mac

Home Loan Interest Rates Are Hovering Below 4%

Mortgage rates posted another drop this week, offering more relief to home buyers.

Freddie Mac reports the following national averages for the week ending July 27:

’30-year fixed-rate’ mortgages: averaged 3.92 percent, with an average 0.5 point, falling from last week’s 3.96 percent average. Last year at this time, 30-year rates averaged 3.48 percent.

’15-year fixed-rate’ mortgages: averaged 3.20 percent, with an average 0.5 point, dropping from last week’s 3.23 percent average. A year ago, 15-year rates averaged 2.78 percent.

Source: Freddie Mac

Walkable Areas Are Getting More Competition

Older Americans are placing a higher value on living in walkable urban centers, according to a new survey of 1,000 respondents nationwide about their living preferences

A majority of respondents surveyed by A Place for Mom, a national referral service, said it was “very important” or “somewhat important” to live in a walkable neighborhood. They also sought neighborhoods with low crime and those that are close to family.

“It’s time to abandon the idea that only millennials and Generation X care about walkability and the services available in dense urban neighborhoods,” says Charlie Severn, head of marketing at A Place for Mom. “These results show a growing set of senior housing consumers also find these neighborhoods desirable.

The survey authors say it’s important for developers to consider creating multigenerational communities in suburban centers that place an emphasis on walkability. Walkability ranked high regardless of income level in the survey. Walkability ranked highest for those under 70 years old who were seeking senior apartments.

Source: “Seniors Want Walkability Too, Survey Says,” Curbed.com (July 25, 2017)

After Brief Hike, Mortgage Rates Fall Below 4%

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week.

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reported the following national averages for the week ending July 20:

  • 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent.
  • 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent.

Source: Freddie Mac

Is Calif.’s Housing Crisis Spinning Out of Control?

California has a severe lack of affordable homes and apartments for middle-class families, The New York Times reports. Their median cost of a home has surged to $500,000—double the national cost.

“The extreme rise in housing costs has emerged as a threat to the state’s future economy and its quality of life,” The New York Times reports. “It has pushed the debate over housing to the center of state and local politics, fueling a resurgent rent control movement and the growth of neighborhood ‘Yes in My Back Yard’ organizations, battling long-established neighborhood groups and local elected officials as they demand an end to strict zoning and planning regulations.”

The state has introduced 130 housing measures this year. Among one of the most recent actions, the Senate approved a bill to crack down on communities that have delayed or derailed housing construction proposals. The bill would restrict the ability to use zoning, environmental, and procedural laws to kill projects that may be considered “out of character” with the neighborhood. The bill is expected to be voted on again later this summer.

Source: “The Cost of a Hot Economy: A Severe Housing Crisis,” The New York Times (July 17, 2017)

Home Loan Interest Rates Push Above 4%

Average mortgage rates are moving up, posting increases for the second consecutive week.

“After fully absorbing the sharp increases in Treasury yields over the past couple of weeks, the 30-year mortgage rate has cleared the psychologically important 4 percent mark for the first time since May,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending July 13:

30-year fixed-rate mortgages averaged 4.03 percent, with an average 0.5 point, increasing from last week’s 3.96 percent average. Last year at this time, 30-year rates averaged 3.42 percent.

15-year fixed-rate mortgages averaged 3.29 percent, with an average 0.5 point, increasing from last week’s 3.22 percent average. A year ago, 15-year rates averaged 2.72 percent.

Source: Freddie Mac