Climbing Mortgage Rates Reach 4-Year High

Climbing Mortgage Rates Reach 4-Year High
Freddie Mac   article by Daily Real Estate News | February 16, 2018

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Mortgage rates continued to inch higher this week, marking the sixth consecutive week for borrowing cost increases for home shoppers.

“Wednesday’s Consumer Price Index report showed higher-than-expected inflation; headline consumer price inflation was 2.1 percent year-over-year in January, two-tenths of a percentage point higher than the consensus forecast,” explains Len Kiefer, Freddie Mac’s deputy chief economist. “Inflation measures were broad-based, cementing expectations that the Federal Reserve will go forward with monetary tightening later this year. Following this news, the 10-year Treasury reached its highest level since January 2014, climbing above 2.90 percent. Mortgage rates have also surged.”

After jumping 10 basis points last week, the 30-year fixed-rate mortgage rose 6 basis points to 4.38 percent, its highest level since April 2014.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 15:

  • 30-year fixed-rate mortgages: averaged 4.38 percent with an average 0.6 point, rising from last week’s 4.32 percent average. Last year at this time, 30-year rates averaged 4.15 percent.
  • 15-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.5 point, increasing from last week’s 3.77 percent average. A year ago, 15-year rates averaged 3.35 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.63 percent, with an average 0.4 point, rising from last week’s 3.57 percent average. A year ago, 5-year ARMs averaged 3.18 percent.

Source: Freddie Mac; REALTOR® Magazine Online, Daily Real Estate News 021618

Nationally: More Markets Hitting Record-High Home Prices

Nationally: More Markets Hitting Record-High Home Prices
article by Daily Real Estate News

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It’s a good time to be a homeowner: Nearly two-thirds of housing markets across the country saw home prices at all-time highs in the fourth quarter of 2017, the National Association of REALTORS® reported Tuesday.

The national median existing single-family home price in the fourth quarter was $247,800, up 5.3 percent from a year ago. Ninety-two percent of the markets measured by NAR saw an uptick in single-family home prices. Twenty-six metros—or 15 percent—saw double-digit increases. Home prices are now at their all-time high in 64 percent of the markets NAR tracked.

“A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices,” says Lawrence Yun, NAR’s chief economist. “Remarkably, home prices have risen a cumulative 48 percent since 2011, yet during this same time frame, incomes are up only 15 percent. In the West region, where very healthy labor markets are driving demand, the gap is even wider.”

By Region Here’s a closer look at how existing-home sales fared in the fourth quarter of 2017:

Northeast: Existing-home sales increased 10.1 percent in the fourth quarter but are 0.4 percent below levels a year ago. Median single-family home price: $268,100, a 4.2 percent increase from a year ago.

Midwest: Existing-home sales rose 6 percent in the fourth quarter and are 2.3 percent higher than a year ago. Median single-family home price: $193,800, up from 7.2 percent a year ago.

South: Existing-home sales increased 3.8 percent in the fourth quarter and are 1.8 percent higher than the fourth quarter of 2016. Median single-family home price: $221,600, up 5 percent from a year ago.

West: Existing-home sales reached an annualized rate of 1.23 million, which is unchanged from the third quarter. Sales were up just 0.3 percent from a year ago. Median single-family home price: $374,400, up 7.2 percent from the fourth quarter of 2016.

The increase in home prices is “certainly great news for homeowners, and especially for those who were at one time in a negative equity situation,” Yun adds. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”

At the end of the fourth quarter, there were 1.48 million existing homes available for sale, which is 10.3 percent lower than a year ago.

“While tight supply is expected to keep home prices on an upward trajectory in most metro areas in 2018, both the uptick in mortgage rates and the impact of the new tax law on some high-cost markets could cause price growth to moderate nationally,” says Yun. “In areas where homebuilding has severely lagged job creation in recent years, it’s going to be a slow slog before there’s enough new construction to cool price appreciation to a pace that aligns more closely with incomes.”

The national family median income increased to $74,492 in the fourth quarter. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $55,585; a 10 percent down payment would require an income of $52,659; and a 20 percent down payment would require a $46,808 income, NAR reports.

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 021318

Mortgage Rates Keep On Pressing Higher

Mortgage Rates Keep On Pressing Higher
Freddie Mac article by Daily Real Estate News | February 9, 2018

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The 30-year fixed-rate mortgage reached its highest average since December 2016, Freddie Mac reports. This is the fifth consecutive week that mortgage rates have been on the rise, increasing borrowing costs for home shoppers heading into the spring buying season.

Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Will higher rates break housing market momentum? It’s too early to tell for sure, but initial readings indicate housing markets are sustaining their momentum so far.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 8:

  • 30-year fixed-rate mortgages averaged 4.32 percent, with an average 0.6 point, rising from last week’s 4.22 percent average. Last year at this time, 30-year rates averaged 4.17 percent.
  • 15-year fixed-rate mortgages averaged 3.77 percent, with an average 0.5, up from a 3.68 percent average last week. A year ago, 15-year rates averaged 3.39 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.57 percent, with an average 0.4 point, increasing from last week’s 3.53 percent average. A year ago, 5-year ARMs averaged 3.21 percent.

Source: Freddie Mac; REALTOR® Magazine Online, Daily Real Estate News 020918