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

Greater Nashville Housing Market Remains Strong; Market Strength Brings Challenges

Greater Nashville Housing Market Remains Strong
Market Strength Brings Challenges
by Kenneth Bargers, REALTOR® | January 27, 2018

Photo by Hatcher & FellThe Greater Nashville area continues to be one of the hottest real estate markets in the United States. A continued strong economy pushed momentum in 2016, the values and home sales continued to increase throughout 2017 and ended the second half of 2017 as a consistent monthly housing market in the nation. Several industry and data tracking entities named Nashville among their Top 20 housing markets for 2017.

Due to the reputation of the “It City”, relocation is heavy to Middle Tennessee and with this popularity comes shortages in housing inventory. Existing-home and new construction inventory struggle to keep pace with the number of buyers. Housing inventory remained a concern throughout 2017 and forecasted to be a challenge for 2018. Corporate and company expansion of new facilities are in place for 2018 bringing employment additions to Middle Tennessee – adding additional pressure for housing availability to the already strong Greater Nashville destination. Addressing the housing inventory will be one of 2018’s priorities with the current popularity of Greater Nashville and Partnership 2020’s continued aggressive pursuit of future business placements and attractions.

Demand for housing also adds as an influence factor on the value of home prices. Increased home values in 2017 will continue in 2018 per current indicators. With increased home values also comes the challenge of home ownership affordability within segments of our population. Of course, the success of national economic guidelines and policies will contribute as a factor in the local up or downturn of our housing market.

Overall, a strong economy, attractive mortgage rates, appeal of Middle Tennessee, along with the desire of home ownership as part of the American Dream should bring another impressive year of housing market production.

www.bargers-solutions.com

Mortgage Rates Continue to Inch Upwards

Mortgage Rates Continue to Inch Upwards
Freddie Mac | January 26, 2018

Fixed-rate mortgages increased again this week, the third consecutive week to see a rise.

“Rates keep climbing,” says Len Kiefer, Freddie Mac’s chief economist. “The 10-year Treasury yield reached its highest point since 2014 reflecting expectations of broad-based economic growth. Mortgage rates, in turn, followed the surge in Treasury yields. The 30-year fixed rate mortgage jumped 11 basis points to 4.15 percent, its highest level since March of last year.”

Home buyer affordability will be a challenge, with mortgage rates moving higher and robust house price gains across the country, Kiefer adds.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 25:

  • 30-year fixed-rate mortgages: averaged 4.15 percent, with an average 0.5 point, increasing from last week’s 4.04 percent average. Last year at this time, 30-year rates averaged 4.19 percent.
  • 15-year fixed-rate mortgages: averaged 3.62 percent, with an average 0.5 point, increasing from last week’s 3.49 percent average. A year ago, 15-year rates averaged 3.40 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.52 percent, with an average 0.4 point, increasing over last week’s 3.46 percent average. A year ago, 5-year ARMs averaged 3.20 percent.

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Source: Freddie Mac; REALTOR® Magazine Online, article by Daily Real Estate News 012618

Builders Reveal Top 10 Biggest Concerns

Builders Reveal Top 10 Biggest Concerns
National Association of Home Builders   article by Daily Real Estate News | January 17, 2018

House Construction 103Homebuilding is still falling short in many markets in alleviating the shrinking inventories of homes for sale. But builders are blaming the construction shortfall on several factors.

Builders revealed the following top 10 “significant” problems they expect to face in 2018, according to the National Association of Home Builders and Wells Fargo Housing Market Index:

  1. Cost/availability of labor: 84%
  2. Building material prices: 84%
  3. Cost/availability of developed lots: 62%
  4. Impact/hook up/inspection or other fees: 60%
  5. Local/state environment regulations and policies: 45%
  6. Inaccurate appraisals: 42%
  7. Federal environment regulations and policies: 42%
  8. Difficulty obtaining zoning/permit approval: 42%
  9. Gridlock/uncertainty in Washington making buyers cautious: 42%
  10. Development standards (parling, setbacks, etc.): 38%

Once again for 2018, builders said the cost and availability of labor is their chief concern. The number of builders who are reporting this as a problem is growing. In 2017, 82 percent of builders said cost and availability of labor was their top concern; the percentage has grown to 84 percent of builders heading in 2018.

The availability of labor started growing as a problem among builders since 2011. In 2011, just 13 percent of builders rated labor as a significant problem, but by 2012, the percentage jumped to 30 percent and has ever since continued to increase each year.

“Both the availability of labor and lots highlight the expected constraints of a recovering housing market,” the NAHB reports.

Source: “Building Materials Prices and Labor Access Top Challenges for 2018,” National Association of Home Builders’ Eye on Housing blog (Jan. 16, 2018); REALTOR® Magazine Online, Daily Real Estate News 011718

Nationally: Contract Signings Post First Gains Since June

Nationally: Contract Signings Post First Gains Since June
National Association of REALTORS® | December 27, 2017

Pending home sales eked out a small increase in November on both a monthly and annualized basis. The increase was enough to make it the highest gain in contract signings since June as well, the National Association of REALTORS® reported Wednesday.

But will it last? Existing-home sales and price growth are expected to slow heading in 2018 due to the impact from altered tax benefits of homeownership affecting some high-cost areas, according to NAR.

NAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—inched up 0.2 percent month over month. NAR’s index reached a reading of 109.5 in November and is at its highest reading since June (110). The index is 0.8 percent higher than a year ago.

“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” says Lawrence Yun, NAR’s chief economist. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. REALTORS® say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”

Existing-home sales are up 5.8 percent—more than double wage growth. Inventories remain tight at a 3.4-month supply of homes on the market, which is the lowest since NAR began tracking in 1999.

“The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability,” Yun says. “Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home.”

Yun forecasts that existing-home sales will finish 2017 at around 5.54 million, which is an increase of 1.7 percent from 2016 (5.45 million). The national median existing-home price for 2017 is expected to increase to around 6 percent.

Yun projects that in 2018, existing-home sales will see little change, declining just 0.4 percent to 5.52 million. He also forecasts that price growth will moderate to around 2 percent.

November PHS Infographic

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 122717