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.”


Home Loan Interest Rates Near All-Time Low

Fixed-rate mortgages this week dropped to their lowest averages of the year, which analysts attribute to the fallout from last week’s “Brexit” vote. The 30-year fixed-rate mortgage averaged 3.48 percent this week, near its all-time record low of 3.31 percent in November 2012, Freddie Mac reports.

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

  • 30-year fixed-rate mortgages: averaged 3.48 percent, with an average 0.5 point, falling from last week’s 3.56 percent average. Last year at this time, 30-year rates averaged 4.08 percent.
  • 15-year fixed-rate mortgages: averaged 2.78 percent, with an average 0.4 point, dropping from last week’s 2.83 percent average. Last year at this time, 15-year rates averaged 3.24 percent.

Source: Freddie Mac

Mortgage Rates in Free Fall Since Brexit Vote

Since Britain’s surprising vote to leave the European Union, U.S. home buyers and home owners have been reaping an expected benefit — mortgage rates that are quickly dropping. Mortgage rates are now at the lowest average in more than three years, and economists expect them to head even lower.

“Lower rates produce lower monthly payments and greater buying power—those who are well qualified can afford a home that’s 8 percent more expensive than at the beginning of the year,” Jonathan Smoke,®’s chief economist, writes in a recent column. “That’s more than enough to offset the rise in prices during that time.”

Source: “Thanks, Brexit! Well-Qualified U.S. Buyers Reap a Windfall,”® (June 28, 2016)

It’s a Good Time to Lock in Mortgage Rates

“This week’s survey shows the 30-year fixed rate inching up to 3.56 percent, only 2 basis points above last week’s average. The low rates continue to be good news for the housing market, as existing home sales rose 1.8 percent to a 5.53 million seasonally adjusted annual rate in the month of May — the highest level since February 2007.”

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

  • 30-year fixed-rate mortgages: averaged 3.56 percent, with an average 0.6 point, rising from last week’s 3.54 percent average. A year ago, 30-year rates averaged 4.02 percent.
  • 15-year fixed-rate mortgages: averaged 2.83 percent, with an average 0.5 point, increasing from last week’s 2.81 percent average. A year ago, 15-year rates averaged 3.21 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.74 percent, with an average 0.5 point, holding the same average from a week ago. Last year at this time, 5-year ARMs averaged 2.98 percent.

Source: Freddie Mac

Report: Housing Costs Pinch 21.3M Renters

A record high number of American renters — about 21.3 million — are devoting 30 percent or more of their income to paying rent, according to the annual State of the Nation’s Housing report from Harvard University’s Joint Center for Housing Studies. Most financial experts say consumers shouldn’t pay more than 30 percent of their monthly income for housing costs.

Rents, however, have been rising faster than wages for years now. “When you have to dedicate such a high proportion of your income to rent every month, it forces you to make difficult decisions,” says Dan McCue, a senior research associate at Harvard’s Joint Center. “It means spending less on essentials like food, clothing, and health care, as well as less opportunity to save for a down payment on a home or plan for retirement.”

Source: Harvard University’s Joint Center for Housing Studies and “11 Million Americans Spend Half Their Income on Rent,” CNNMoney (June 22, 2016)

Home Loan Rates Plunge to 3-Year Lows

“The 30-year mortgage rate responded by falling 6 basis points for the second straight week to 3.54 percent — yet another low for 2016. Wednesday’s Fed decision to once again stand pat on rates, as well as growing anticipation of the U.K.’s upcoming European Union referendum will make it difficult for Treasury yields and — more importantly — mortgage rates to substantially rise in the upcoming weeks,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages for the week ending June 16:

  • 30-year fixed-rate mortgages: averaged 3.54 percent, with an average 0.5 point, falling from last week’s 3.60 percent average. Last year at this time, 30-year rates averaged 4 percent.
  • 15-year fixed-rate mortgages: averaged 2.81 percent, with an average 0.5 point, dropping from last week’s 2.87 percent average. A year ago, 15-year rates averaged 3.23 percent.

Source: Freddie Mac

Latest Trend in Senior Housing: Roommates

As housing prices climb, seniors wanting to save money are on the lookout for roommates. The trend is especially catching on among single senior women.

“Senior housing organizations across the nation are reporting a surge in demand from the young and old alike to move into the spare rooms of lonely and often lower-income elderly home owners,” says®. “This provides the home owners with the money and companionship they need to maintain and manage to stay in their homes, instead of moving in with family or into a nursing home.”

About 43 percent of Americans over the age of 45 surveyed say they would get a roommate to help out with chores, according to a 2014 AARP survey of more than 1,000 participants. What’s more, 26 percent said they would move in with a roommate in order to supplement their income.

Source: “Seniors Seeking Roommates: ‘Golden Girls,’ Please Apply,”® (June 15, 2016)

How Much Will Buyers Pay for Walkable Space?

Urban development that boasts high density and walkability is in demand over life in the suburbs, according to a report by the Center for Real Estate and Urban Analysis at George Washington University School of Business and LOCUS: Responsible Real Estate Developers and Investors. In fact, such places are gaining market share against suburban areas for the first time in decades.

The report defines walkable urban areas as those with high density, more mixed-use real estate, and multiple transportation options. These areas command larger rent premiums over suburban spaces, with the ability to charge 90 percent more for office space, 71 percent for retail, and 66 percent for multifamily rentals.

But just because a place might lack a history of density and walkability doesn’t mean it’s stuck with lower rents. The study found that new development can help, with areas known for sprawl taking notice of the trend and making strides in adding more density and walkability.

Source: “Walkable Cities Gaining Ground Against Suburbs, Says Report,” (June 14, 2016)

Builders Need Construction Help

The costs of raw materials used in construction — such as asphalt, iron, steel, and diesel — have fallen the past year and a half, but builders are still not seeing much of a savings. That’s because the costs of labor are soaring due to worker shortages in the construction field, according to new research from CBRE Inc., a real estate brokerage firm.

Average construction costs have risen by 1.8 percent in that time, according to the report. Average hourly wages for construction workers are on the rise as building increases but the number of workers in construction hasn’t kept pace.

“People who weren’t able to find jobs either went into another profession or retired,” says Andrea Cross, CBRE’s head of office market research in the Americas. “There’s been a struggle to find workers who have enough skills to come in and do the job efficiently.”

Source: “Builders Fail to Profit From Slump in Raw Materials Prices,” The Wall Street Journal (June 11, 2016)

Mortgage Rates Dip After Bad Jobs Report

Following this week’s negative jobs report, mortgage rates dropped for the first time in three weeks.

According to Freddie Mac, this drop marks the 10th consecutive week the 30-year mortgage rate averaged under 3.7 percent, which is allowing buyers an extended chance to lock in low rates.

Freddie Mac reports the following national mortgage rate averages for the week:

30-year fixed-rate mortgages: averaged 3.60 percent with an average 0.5 point this week, down from its average of 3.66 percent last week. A year ago rates averaged 4.04 percent.

15-year fixed-rate mortgages: this week averaged 2.87 percent with an average 0.5 point, down from last week when it averaged 2.92 percent. A year ago rates averaged 3.25 percent.

Source: Freddie Mac