Mortgage rates continued to inch higher this week, Freddie Mac reports in its weekly mortgage market survey.
“Fixed-rates moved up for the third consecutive week, with the average 30-year fixed-rate mortgage about a quarter-percentage point higher than three weeks ago,” says Frank Nothaft, Freddie Mac’s chief economist. “While this may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks.”
The rates are also lower today than they were a year ago at this time. Freddie Mac reports the following national averages with mortgages rates for the week ending May 23:
- 30-year fixed-rate mortgages: averaged 3.59 percent this week, with an average 0.7 point, rising from last week’s 3.51 percent average. A year ago at this time, 30-year rates averaged 3.78 percent.
- 15-year fixed-rate mortgage: averaged 2.77 percent, with an average 0.7 point, increasing from last week’s 2.69 percent average. Last year at this time, 15-year rates averaged 3.04 percent.
- 5-year adjustable-rate mortgages: averaged 2.63 percent, with an average 0.5 point, rising from last week’s 2.62 percent average. Last year at this time, 5-year ARMs averaged 2.83 percent.
Source: Freddie Mac
As consumer confidence, the economy, and job market all make gains, more Americans are feeling like they have money to spend on second residences and summer homes. Low interest rates are still a big draw.
Vacation home sales increased 10 percent nationwide in 2012, according to the National Association of REALTORS®. Real estate professionals are also reporting sales have been strong this spring in many vacation home hot spots.
“A lot of buyers who were sitting on the sidelines decided last year was probably a good time to take advantage of buying a vacation home,” says Paul Bishop, NAR’s vice president of research. “They were feeling pretty good about their own financial situation, given the growth in the market and in the economy.”
Source: “Vacation home sales sizzle; rentals book up,” CNBC (May 20, 2013) and “Desire For Vacation Homes Heating Up, Sales Strong,” Investor’s Business Daily (May 16, 2013)
Wells Fargo and Citigroup have temporarily halted foreclosure sales in several states, taking precautions after a federal regulator released new guidance on minimum standards for foreclosure sales.
The Office of the Comptroller of the Currency (OCC) recently released the new standards. The OCC’s directive mostly consists of 13 questions banks need to ask themselves before selling a home in foreclosure, such as whether the borrower is protected from foreclosure by bankruptcy or if the borrower is in an active loan modification plan.
JPMorgan had also mostly stopped its foreclosure sales after the OCC’s standards were released, but has since resumed sales.
Wells Fargo, the nation’s largest mortgage originator, has seen a dramatic drop in foreclosure sales while significantly decreasing the number of sales it’s processing. For example, foreclosure sales by Wells Fargo in California, Nevada, Arizona, Oregon, and Washington plummeted from 349 a day in April to less than 10 a day, according to Foreclosure Radar, a real estate monitoring firm based in California.
“Wells Fargo has temporarily postponed certain foreclosure sales while we study the revised guidance from the OCC,” a Wells Fargo spokeswoman confirmed for American Banker. Citibank officials also confirmed the reason behind their halt in sales was to carefully review the new guidance.
“The OCC did not direct a slowdown or pausing,” says OCC spokesman Bryan Hubbard. “However, if servicers are not certain they are meeting these standards, pausing foreclosures is a responsible and productive step.”
Source: “Wells, Citi Halt Most Foreclosure Sales as OCC Ratchets Up Scrutiny,” American Banker (May 17, 2013)
The housing market is heating up, yet many house hunters are not prepared to take on the biggest purchases of their lives.
When it comes to mortgages, home buyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to an April survey of more than 1,000 current and prospective homeowners by real estate website Zillow.
Among the survey’s findings, 31% of buyers don’t think it’s possible to get a mortgage for less than 5% down; 34% don’t know what the term “annual percentage rate” (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.
“All too often buyers focus on negotiating a lower home price and ignore the importance of finding the right loan,” said Erin Lantz, director of mortgages for Zillow. “Buyers should always shop multiple lenders and compare rates and fees and read lender reviews in order to find the best loan for their situation.”
Fixed-rate mortgages climbed this week after signs of stronger consumer spending, Freddie Mac reports in its weekly mortgage market survey.
Here are the national averages for mortgage rates for the week ending May 16:
- 30-year fixed-rate mortgages averaged 3.51 percent, with an average 0.7 point, increasing from last week’s 3.42 percent average. A year ago at this time, 30-year rates averaged 3.79 percent.
- 15-year fixed-rate mortgages averaged 2.69 percent, with an average 0.7 point, rising from last week’s 2.61 percent average. Last year at this time, 15-year rates averaged 3.04 percent.
- 5-year adjustable-rate mortgages averaged 2.62 percent, with an average 0.5 point, rising from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.83 percent.
Source: Freddie Mac
For the first time in six weeks, fixed-rate mortgages reversed course and climbed higher this week, Freddie Mac reports in its weekly market survey.
“Fixed mortgage rates edged up following a solid employment report for April,” says Frank Nothaft, Freddie Mac’s chief economist. “The economy gained 165,000 new jobs on net last month, more than the market consensus forecast and the largest monthly increase this year.”
Freddie Mac reports the following national averages with mortgage rates for the week ending May 9:
- 30-year fixed-rate mortgages: averaged 3.42 percent, with an average 0.7 point, rising from last week’s 3.35 percent average. A year ago at this time, 30-year rates averaged 3.83 percent.
- 15-year fixed-rate mortgages: averaged 2.61 percent, with an average 0.7 point, rising from last week’s 2.56 percent average. Last year at this time, 15-year rates averaged 3.05 percent.
- 5-year adjustable-rate mortgages: averaged 2.58 percent this week, with an average 0.5 point, climbing from last week’s 2.56 percent average. Last year at this time, 5-year ARMs averaged 2.81 percent.
Source: Freddie Mac
Individual home buyers comprised a quarter of all house purchases last year, according to National Association of REALTORS® data. Single women purchase homes at double the rate of single men, according to the data.
However, solo buyers can face particular challenges in qualifying for a mortgage. During and following the recession, banks tightened their underwriting standards, which also made it more difficult for single home buyers without dual incomes to qualify for a loan.
Between 2010 and 2012, home purchases made by singles dropped 7 percent — unprecedented, according to NAR. Low mortgage rates and high home affordability have drawn more singles back to home buying.
Home purchases are often a means of self-expression for singles, Jennifer De Vivo, a real estate professional, told MSN Real Estate. “It’s a way for singles to express their lifestyles and values,” De Vivo says. “They are able to focus on the exact communities, home styles, and features that cater to their individuality with much less compromise.”
“I always counsel them to try to keep their current home as an investment property and rent it out. It’s a big step toward helping create long-term financial security,” De Vivo says.
Source: “Solo Homebuyer? You’re not Alone,” MSN Real Estate (May 2013)
The number of homes for sale is at the lowest point in more than 10 years, but with buyer demand still high, many markets are seeing bidding wars. A TIME magazine article recently asked: “Are buyers being manipulated into overbidding for the relatively few attractive homes on the market?” Some real estate professionals say that homes are being underpriced in order to ignite a bidding war.
“Most people are not pricing at market value,” a real estate professional told the San Francisco Chronicle. “Even in this market, you don’t want to overprice.”
Bidding wars have become commonplace in markets like Denver, where half of the new homes on the market are selling in less than 30 days. In Northern and Southern California nine in 10 homes are attracting bidding wars, as well as two-thirds of the homes for sale in Boston, New York City, Seattle, and Washington, D.C., the TIME magazine article notes.
“The only question is not whether a new listing will get multiple bids but how many it will get,” says a Sacramento, Calif.-based real estate professional. Your comments!?!
Source: “Forget Lowballing: Bidding Wars Return in Hot Housing Markets,” TIME (April 30, 2013)
More and more retirees looking to obtain a home loan may find that solid retirement accounts and a sterling credit rating are not enough.
Lenders increasingly are looking for a consistent monthly income in line with their usual debt-to-income standards. When they look at dividends, most lenders want to see a regular annual amount on the tax return paid out over at least the past couple of years. In terms of part-time employment, borrowers need to prove they are actually working at the moment of application. In some cases, a two-year work history is required.
Social Security income is always counted, of course. Borrowers, though, need to be informed that current Fannie Mae guidelines permit lenders to increase that income by 25 percent if the beneficiary is not paying taxes on it.
A handful of portfolio lenders are still issuing loans without verifying income. However, their interest rates are higher, as are their down payment requirements — which are in the range of 30 to 40 percent.
Source: “Loan Qualifications for Retirees,” New York Times (05/05/13)