30-Year Mortgage Rates Reach Highest Level Since May

30-Year Mortgage Rates Reach Highest Level Since May
Freddie Mac | September 21, 2018

For the fourth consecutive week, mortgage rates continued to climb as home buyers face higher borrowing costs.

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“Mortgage rates are drifting upwards again and represent continued affordability challenges for prospective buyers—especially first-time buyers,” says Sam Khater, Freddie Mac’s chief economist. “Borrowing costs are moving right now for three main reasons: the very strong economy, higher U.S. government debt issuances, and global trade tensions.”

Khater says despite the uptick in rates, mortgage applications for home purchases have managed to increase on an annual basis for five consecutive weeks. “However, given the widespread damage caused by Hurricane Florence in the Carolinas, the next few months of housing activity will likely be somewhat volatile,” he adds.

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 20:

30-year fixed-rate mortgages averaged 4.65 percent, with an average 0.5 point, rising from last week’s 4.6 percent average. Last year at this time, 30-year rates averaged 3.83 percent.

15-year fixed-rate mortgages averaged 4.11 percent, with an average 0.5 point, increasing from last week’s 4.06 percent average. A year ago, 15-year rates averaged 3.13 percent.

5-year hybrid adjustable-rate mortgages averaged 3.92 percent, with an average 0.4 point, dropping from last week’s 3.93 percent average. A year ago, 5-year ARMs averaged 3.17 percent.

Source: Freddie Mac; REALTOR® Mag News, 092118

Mortgage Rates Inch Up

Mortgage Rates Inch Up
Freddie Mac | September 7, 2018

Mortgage rates rose slightly for the second consecutive week, and economists warn that more rises are likely to come.

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“Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy,” says Sam Khater, Freddie Mac’s chief economist.

Mortgage rates are now up three-quarters of a percentage point from last year. Home prices have been rising too—although at a slower pace recently—but are still “outrunning rising inflation and incomes,” Khater notes. “The weakening in affordability is hindering many interested buyers this fall, even as the robust economy brings them into the market.”

Freddie Mac reports the following averages with mortgage rates for the week ending Sept. 6:

30-year fixed-rate mortgages: averaged 4.54 percent, with an average 0.5 point for the week, increasing from last week’s 4.52 percent average. Last year at this time, 30-year rates averaged 3.78 percent.

15-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.4 point, increasing from last week’s 3.97 percent average. A year ago, 15-year rates averaged 3.08 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.93 percent, with an average 0.3 point, increasing from last week’s 3.85 percent average. A year ago, 5-year ARMs averaged 3.15 percent.

Source: Freddie Mac; REALTOR® Magazine 090818

Lots Are Costing Buyers More

Lots Are Costing Buyers More
National Association of Home Builders | September 7, 2018

Lots may be getting smaller, but they’re also getting more expensive, according to analyzed data taken from the U.S. Census Bureau’s Survey of Construction. Single-family lot prices reached a new record high in 2017—half of the lots were priced at or above $47,400.

While this is a new nominal record, when adjusted for inflation, lot values have still not reached their peaks from the housing boom days, the National Association of Home Builders reports. During the housing boom, half of lots were priced at more than $43,000—this is more than $50,000 when converted to 2017 values.

However, some regions within the U.S. have seen their lot prices surpass their former peaks, even when adjusted for inflation. Rising lot values are the most pronounced in the West South Central and West North Central divisions, where lot values have climbed to new historical records.

The West South Central division—which includes Texas, Oklahoma, Arkansas, and Louisiana—tended to have values below the national median historically but started to catch up in 2015 to national numbers. Half of the lots in the region are selling for more than $56,000, which is a significant increase from the housing boom years when half of lots were priced under $30,000.

The West North Central division—which includes Iowa, Minnesota, and North and South Dakota—also saw lot prices reach a record high. Half of the lots in the region were priced above $64,000 in 2017, which also exceeded values from the housing boom days.

NAHB lot prices

“Given that the nation’s lots are getting smaller and home production is still significantly below the historically normal levels, it might seem surprising that lot values keep going up,” the NAHB notes on its blog, Eye On Housing. “However, the rising values are consistent with persistent record lot shortages. They are also consistent with significant and rising regulatory costs that ultimately increase development costs and boost lot values.”

Source: “Lot Values Climb Higher,” National Association of Home Builders’ Eye On Housing blog (Sept. 5, 2018); REALTOR® Magazine 090818

August Brings Home Sales Increase

August Brings Home Sales Increase
Greater Nashville REALTORS®, Press Release September 7, 2018

NASHVILLE, Tenn. (Sept. 7, 2018) – There were 3,961 closings reported for the month of August, according to figures provided by Greater Nashville REALTORS®. This represents a 2.0 percent increase from the 3,883 closings reported for August 2017.

Year-to-date closings total 27,205 a 0.2 percent decrease compared to the 27,248 closings reported through July 2017.

“The numbers in August show a healthy increase in closings compared to August 2017,” said Greater Nashville REALTORS® President Sher Powers. “We’re also seeing strong pending sales as we head into September, which bodes well for fall closings.”

There were 3,152 properties under contract at the end of the month, compared to the 3,939 properties under contract at this time last year. The average number of days on the market for a single-family home was 27 days.

The median residential price for a single-family home during August was $305,000 and for a condominium it was $224,900. This compares with last year’s median residential and condominium prices of $285,000 and $207,061.

Active inventory at the end of August was 12,150, which increased from 9,208 in 2017.

“As inventory shows moderate increases across Middle Tennessee, the market is calming and offering more home options for buyers, which has inspired new buyers to step into the market and more sellers to list their homes,” added Powers.

About Us: Greater Nashville REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners. REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics.

The data collected for this release represents nine Middle Tennessee counties: Cheatham, Davidson, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

View the August 2018 Market Data Infographic

Source: Greater Nashville REALTORS®, Press Release 090718

Yards for New Homes Are Smaller Than Ever

Yards for New Homes Are Smaller Than Ever
National Association of Home Builders | REALTOR® Magazine
September 4, 2018

Home buyers will have a harder time finding a big yard, as lot sizes remain near record lows, according to the U.S. Census Bureau. Among sold properties in 2017, the median lot size for a new, detached single-family home was one-fifth of an acre, or 8,560 square feet. Median lot sizes fell below 8,600 square feet in 2015 for the first time since the bureau started recording such data.

Lot sizes vary regionally, and the nation’s largest tend to be in New England. More than half of single-family spec homes in the area are built on lots exceeding 0.4 acres. New England is known for having stricter zoning regulations than other parts of the nation, which requires builders to keep lower densities for construction.

On the other hand, the Pacific region, including California, Washington, Oregon, Hawaii, and Alaska, has some of the tiniest lots in the nation—half of which are smaller than 0.15 acres.

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Source: “Lot Size Remains Record Low,” National Association of Home Builders’ Eye on Housing (Aug. 31, 2018); REALTOR® Magazine Online 090418

Mortgage Rates Mostly Holding Steady

Mortgage Rates Mostly Holding Steady
Freddie Mac | August 31, 2018

Mortgage rates haven’t been this stable since the fall of 2016. Rates did inch up this week, but only slightly and are still offering prospective buyers a window of opportunity, says Sam Khater, Freddie Mac’s chief economist.

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“The 30-year fixed-rate mortgage barely inched up this week, continuing the summer trend of essentially being flat,” says Khater. “While sales and price growth have softened these last few months, this leveling of rates may be helping more buyers reach the market. Purchase mortgage applications this week were once again modestly above year-ago levels.”

The recent slowdown in price appreciation in several markets, mixed with these steady mortgage rates, is “good news” for many prospective buyers who may have been priced out earlier this year, Khater says.

“Given the strength of the economy, it is possible for home sales to pick up even more before year’s end,” Khater says. “The key factor will be if affordably priced inventory increases enough to continue this recent trend of cooling price appreciation.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 30:

30-year fixed-rate mortgages: averaged 4.52 percent, with an average 0.5 point, rising from last week’s 4.51 percent average. Last year at this time, 30-year rates averaged 3.82 percent.

15-year fixed-rate mortgages: averaged 3.97 percent, with an average 0.5 point, falling from last week’s 3.98 percent average. A year ago, 15-year rates averaged 3.12 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.85 percent, with an average 0.3 point, rising from last week’s 3.82 percent average. A year ago, 5-year ARMs averaged 3.14 percent.

Source: “Mortgage Rates Tick Up,” Freddie Mac (Aug. 30, 2018); REALTOR® Magazine 083118

Mortgage Rates Fall for Third Straight Week

Mortgage Rates Fall for Third Straight Week
Freddie Mac | August 24, 2018

Borrowers continued to get relief with mortgage rates this week, as the 30-year fixed-rate mortgage sank lower for the third consecutive week. Mortgage rates are now at their lowest level since mid-April.

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“Backed by very strong consumer spending, the economy is red-hot this month, which is in turn rippling through the financial markets and driving equities higher,” says Sam Khater, Freddie Mac’s chief economist. “Unfortunately, the same cannot be said about the housing market, where it appears sales activity crested in late 2017. Existing-home sales have now stepped back annually for the fifth straight month, and purchase mortgage applications this week were barely above year ago levels.”

Khater notes that “it is clear affordability constraints” have cooled the housing market, particularly in expensive coastal markets. “Many metro areas desperately need more new and existing affordable inventory to break out of this slump,” he notes.

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 23:

30-year fixed-rate mortgages: averaged 4.51 percent, with an average 0.5 point, falling from last week’s 4.53 percent average. Last year at this time, 30-year rates averaged 3.86 percent.

15-year fixed-rate mortgages: averaged 3.98 percent, with an average 0.5 point, falling from last week’s 4.01 percent average. A year ago, 15-year rates averaged 3.16 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.82 percent, with an average 0.3 point, down from last week’s 3.87 percent average. A year ago, 5-year ARMs averaged 3.17 percent.

Source: “Mortgage Rates Maintain Downward Trend,” Freddie Mac (Aug. 23, 2018); REALTOR® Magazine 082418