Mortgage Rates Jump to 7-Year High

Mortgage Rates Jump to 7-Year High
Freddie Mac | October 12, 2018

The 30-year fixed-rate mortgage hasn’t averaged this high since 2011, as it inches closer to the 5 percent threshold.

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“Rising rates paired with high and escalating home prices is putting downward pressure on purchase demand,” says Sam Khater, Freddie Mac’s chief economist. “While the monthly payment remains affordable due to the still low mortgage rate environment, the primary hurdle for many borrowers today is the down payment and that is the reason home sales have decreased in many high-priced markets.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 11:

30-year fixed-rate mortgages: averaged 4.90 percent, with an average 0.5 point, rising from last week’s 4.71 percent average. Last year at this time, 30-year rates averaged 3.91 percent.

15-year fixed-rate mortgages: averaged 4.29 percent, with an average 0.4 point, rising from last week’s 4.15 percent average. A year ago, 15-year rates averaged 3.21 percent.

5-year hybrid adjustable-rate mortgages: averaged 4.07 percent, with an average 0.3 point, rising from last week’s 4.01 percent average. A year ago, 5-year ARMs averaged 3.16 percent.

Source: Freddie Mac; REALTOR® Mag News

Mortgage Rates Drop Slightly for First Time in 5 Weeks

Mortgage Rates Drop Slightly for First Time in 5 Weeks
Freddie Mac | October 5, 2018

Borrowers saw a slight cool down in mortgage rates this week following last week’s seven-year high. The 30-year fixed-rate mortgage dipped for the first time after five consecutive weeks of increases, averaging 4.71 percent.

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But the higher rates may be deterring some would-be home buyers. “The strength in the economy has failed to translate to gains in the housing market as higher mortgage rates have contributed to the decrease in home purchase applications, which are down from a year ago,” says Sam Khater, Freddie Mac’s chief economist. “With mortgage rates expected to track higher, it’s going to be a challenge for the housing market to regain momentum.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 4:

30-year fixed-rate mortgages: averaged 4.71 percent, with an average 0.4 point, falling slightly from last week’s 4.72 percent average. Last year at this time, 30-year rates averaged 3.85 percent.

15-year fixed-rate mortgages: averaged 4.15 percent, with an average 0.4 point, decreasing from last week’s 4.16 percent average. A year ago, 15-year rates averaged 3.15 percent.

5-year hybrid adjustable-rate mortgages: averaged 4.01 percent, with an average 0.3 point, rising from last week’s 3.97 percent average. A year ago, 5-year ARMs averaged 3.18 percent.

Source: Freddie Mac; REALTOR® Mag News 100518

Mortgage Rates Surge to 7-Year High After Fed Hike

Mortgage Rates Surge to 7-Year High After Fed Hike
Freddie Mac | September 28, 2018

Mortgage rates surged to their highest averages since 2011 following the Federal Reserve’s announcement Wednesday that it is raising its benchmark interest rate by a quarter point. The 30-year fixed-rate mortgage jumped to 4.72 percent, up from 4.65 percent last week.

“The robust economy, rising Treasury yields, and the anticipation of more short-term rate hikes caused mortgage rates to move up,” says Freddie Mac Chief Economist Sam Khater. “Even with these higher borrowing costs, it’s encouraging to see that prospective buyers appear to be having a little more success. With inventory constraints and home prices starting to ease, purchase applications have now trended higher on an annual basis for six straight weeks.”

Khater also notes that consumer confidence is at an 18-year high, and job gains continue to hold steady. “These two factors should keep demand up in the coming months, but at the same time, home shoppers will likely deal with even higher mortgage rates,” Khater says. Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 27:

30-year fixed-rate mortgages: averaged 4.72 percent, with an average 0.5 point, rising from last week’s 4.65 percent average. Last year at this time, 30-year rates averaged 3.83 percent.

15-year fixed-rate mortgages: averaged 4.16 percent, with an average 0.5 point, rising from last week’s 4.11 percent average. A year ago, 15-year rates averaged 3.13 percent.

5-year hybrid adjustable-rate mortgages: averaged 3.97 percent, with an average 0.3 point, rising from last week’s 3.92 percent average. A year ago, 5-year ARMs averaged 3.20 percent.

Source: Freddie Mac; REALTOR® Mag News 092818

Nationally: Why Were Fewer Contracts Signed in August?

Nationally: Why Were Fewer Contracts Signed in August?
National Association of REALTORS® | September 27, 2018

Pending home sales continued to fall last month, marking the eighth consecutive month for annual decreases, the National Association of REALTORS® reported Thursday. The drop in contracts may be a sign of a growing number of buyers who are being priced out of the market, economists warn.

August PHS InfographicNAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—fell 1.8 percent to a reading of 104.2 in August. Contract signings are now 2.3 percent lower than a year ago.

The largest declines last month were in the West, where home prices have risen the most. “[This] clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points,” says Lawrence Yun, NAR’s chief economist.

The decline in sales contracts has also coincided with fewer homes on the market. But that may soon change—a record high of Americans now say it’s a good time to sell their home, according to NAR’s third-quarter Housing Opportunities and Market Experience survey.

“Just a couple of years ago about 55 percent of consumers indicated it was a good time to sell; that figure has climbed to 77 percent today,” Yun says. “With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains. However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market.”

Source: National Association of REALTORS®; REALTOR® Mag News 092718

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

NAR Report: Market Could Stabilize as More Homes are Listed

NAR Report: Market Could Stabilize as More Homes are Listed
National Association of REALTORS® | September 20, 2018

Existing-home sales remained mostly flat in August, bringing relief to markets following four consecutive months of decreases. Sales gains in the Northeast and Midwest helped to offset downturns in the South and West last month, according to the National Association of REALTORS®’ existing-home sales report, released Thursday.

Existing-home sales—which are completed transaction for single-family homes, townhomes, condos, and co-ops—remained at a seasonally adjusted annual rate of 5.34 million in August, the same as July. Sales are 1.5 percent below a year ago, NAR reports.

“Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” says Lawrence Yun, NAR’s chief economist. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”

Here’s a closer look at some of the findings:

  • Home prices: The median existing-home price for all housing types was $264,800—up 4.6 percent from a year ago.
  • Inventory: Total housing inventory at the end of August was at 1.92 million existing homes for sale, up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace.
  • Days on the market: Properties stayed on the market an average of 29 days in August, down from 30 days a year ago. Fifty-two percent of homes sold in August were on the market for less than a month. “While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” Yun says. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory—especially moderately priced, entry-level homes—would propel sales.”
  • All-cash sales: All-cash sales comprised 20 percent of transactions in August, unchanged from a year ago. Investors tend to make up the biggest bulk of all-cash sales. They made up 13 percent of home sales in August, down from 15 percent a year ago.
  • Distressed sales: Foreclosures and short sales accounted for 3 percent of sales in August, the lowest reading since NAR began tracking such data in October 2008. Broken out, 2 percent of sales were foreclosures and 1 percent were short sales.

“We are probably seeing a reaction to the uncertainty around how sustainable recent price increase will be in the near future,” says Ruben Gonzalez, chief economist at Keller Williams. “Nationally, we expect sales to continue to track slightly below last year’s levels as inventory starts to move upward.”

Source: National Association of REALTORS®; REALTOR® Mag News, 092018

Nationally: Home Prices Hit a Record High

Nationally: Home Prices Hit a Record High
National Association of REALTORS® | June 20, 2018

Home buyers can expect to pay more for a home this summer. The median existing-home price for all housing types reached an all-time high in May at $264,800, according to the latest housing report released by the National Association of REALTORS®.

Many markets continue to see a flood of buyers but not enough homes for sale, which is prompting prices to rise and also limiting the number of sales. For the second consecutive month, existing-home sales dropped, even in the midst of a typically busy selling season.

NAR-EHS-May18smTotal existing-home sales—which are completed transactions for single-family homes, townhomes, condos, and co-ops—fell 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May, the National Association of REALTORS® reported Wednesday. Sales are now 3 percent lower than a year ago.

“Inventory coming onto the market during this year’s spring buying season was not even close to being enough to satisfy demand,” says Lawrence Yun, NAR’s chief economist. “That is why home prices keep outpacing incomes and listings are going under contract in less than a month—and much faster—in many parts of the country.”

Closings were down in a majority of the country last month and declined on an annual basis in every major region, Yun says. “Incredibly low supply continues to be the primary impediment to more sales, but there’s no question the combination of higher prices and mortgage rates are pinching the budgets of prospective buyers, and ultimately keeping some from reaching the market,” Yun says.

May’s Housing Stats

Here’s a closer look at some of the key indicators of the housing market from NAR’s latest housing report:

  • Home prices: The median existing-home price for all housing types was $264,800 in May, an all-time high. Home prices were up 4.9 percent from a year ago.
  • Inventory: Total housing inventory at the end of May rose 2.8 percent to 1.85 million existing homes available for sale. Still, the number of homes for sale is 6.1 percent lower than a year ago. Unsold inventory is at a 4.1-month supply at the current sales pace.
  • Days on the market: Properties typically stayed on the market for 26 days in May, down from 27 days a year ago. Fifty-eight percent of homes sold in May were on the market for less than a month.
    First-time home buyers: This segment comprised 31 percent of sales in May, down from 33 percent a year ago.
  • All-cash sales: All-cash sales accounted for 21 percent of transactions in May, down from 22 percent a year ago. Individual investors tend to make up the bulk of cash sales. They purchased 15 percent of homes in May, down from 16 percent a year ago.
  • Distressed sales: Foreclosures and short sales made up 3 percent of sales in May, the lowest reading since NAR began tracking such data in 2008. Distressed sales are down from 5 percent a year ago. In May, 2 percent of sales were foreclosures and 1 percent were short sales.

Source: National Association of REALTORS®; REALTOR® Mag News, 062018