Looking at mortgage rates, what to expect from housing in the next 6 months, why you should list your home now, a critical time for affordable housing plus more!
Mortgage Rates This Week
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 3.95% with an average 0.5 point
- This is down from last week when it averaged 3.99%
- Last year at this time, 30-year fixed-rate mortgages averaged 4.20%
- 15-year fixed-rate mortgages averaged 3.38% with an average 0.5 point
- This is down from last week when it averaged 3.44%
- Last year at this time, 15-year fixed-rate mortgages averaged 3.44%
Len Kiefer, Deputy Chief Economist at Freddie Mac, said:
Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year. The 30-year fixed-rate mortgage fell 4 basis points from a week ago to 3.95 percent in the year’s first survey. Despite increases in short-term interest rates, long-term interest rates remain subdued. The 30-year mortgage rate is down a quarter of a percentage point from where it was a year ago and the spread between the 30-year fixed and 5/1 adjustable rate mortgage is the lowest since 2009.
With the FOMC minutes showing continued support for gradual increases in policy rates from many participants and inflation rates remaining low, there isn’t much upward pressure on long-term rates at the moment. Whether that changes due to a tighter labor market and the economic impact of tax reform remains to be seen.
The MBA reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.25%, with points increasing to 0.36 from 0.35 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.13% from 4.21%, with points increasing to 0.21 from 0.20 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.65% from 3.66%, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.
Remember these are the average rates and may not reflect what is possible for each home buyer. I suggest that every serious home buyer take the first step in the home buying journey and sit down with the mortgage lender of their choice to discuss their options.
Expecting a Strong Real Estate Market
NAR just said that according to the Six-month Outlook REALTORS® Confidence Index, REALTORS® expect strong market conditions in the next six months for all property types.
Check out the map:
As you can see, the market is expected to be very strong in South Carolina in the coming months. Buyers need to be properly prepared and professionally represented to be successful.
Anyone thinking about selling their home needs to understand that now is a great time to put their home on the market…
Why You Should List Your Home Now
Demand from buyers is STILL strong and the supply of homes for sale is below 6 months in most areas. If there is less than a 6 month supply of homes, it means we are in a seller’s market!
Citibank Fined $70 Million for Anti-Money Laundering Shortcoming
A U.S. bank regulator has fined Citibank (C.N) $70 million for failing to address shortcomings in its anti-money laundering policies.
The Office of the Comptroller of the Currency fined the bank in late December and announced it on Thursday. The regulator assessed the civil penalty because the bank had failed to address concerns it had first flagged in 2012.
A spokesman for the bank, a unit of Citigroup Inc (C.N), said it aimed to satisfy all federal rules that target money laundering.
So it took 5 years to fine Citibank? Maybe stopping money laundering is NOT a priority at Citibank…
A Critical Time for Affordable Housing
From The Urban Institute:
The United States is in the worst affordable housing crisis in decades, with more households competing for an increasingly limited supply of rental housing. The Tax Cuts and Jobs Act enacted last month will exacerbate the situation. The National Low Income Housing Coalition expects the enacted changes will threaten the construction of affordable housing and undermine the Housing Trust Fund, reducing the number of affordable rental homes available.
Our new report shows that recent proposals, including the administration’s proposed fiscal year 2018 budget, threaten deep cuts and significant changes to our limited supply of housing assistance. Even families who have received assistance could face housing instability and increased rents.
Money does not grow on trees but too little affordable housing will cost society much more in the long run. Paying too much for housing means that many Americans will never be able to save money to buy a home.
Owning a home is a big part of the American Dream. 91% of Americans feel that owning a home is either an essential (43%) or important (48%) part of the American Dream. While we often dream about or romanticize home ownership, some of the positive aspects benefit society as well as the home owner!
Here are several of these positive aspects as reported by the NAR:
- Consistent findings show that homeownership does make a significant positive impact on educational achievement.
- Several researchers have found that homeowners tend to be more involved in their communities than renters.
- Early studies of homeownership and health outcomes found that homeowners and children of homeowners are generally happier and healthier than non-owners, even after controlling for factors such as income and education levels that are also associated with positive health outcomes and positively correlated with homeownership.
As you can see, there are positive benefits to society from a healthy level of home ownership. And if there is a shortage of affordable housing, it will become much harder for people to become home owners…
U.S. Single-Family Rents Increased 2.7% Year Over Year
National single-family rent prices climbed steadily between 2010 and 2017, as measured by the CoreLogic Single-Family Rent Index (SFRI). However, the Index shows year-over-year rent growth has decelerated slowly since it peaked early last year. In October 2017, single-family rents increased 2.7 percent year over year, a 1.7-percentage point decline since the growth rate hit a high of 4.4 percent in February 2016. The Index measures changes to the cost to rent single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. Analysis is conducted nationally and for 75 Core Based Statistical Areas (CBSAs).
The bad thing is that rent growth for the low end of the market was more than double the rate of the high end. If you think there is a problem now with affordable housing, it appears it is only going to get worse!
ISM Reports Service Sector Grew for 96th Consecutive Month!
ISM just reported that economic activity in the non-manufacturing sector grew in December for the 96th consecutive month.
Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee said:
The NMI® registered 55.9 percent, which is 1.5 percentage points lower than the November reading of 57.4 percent. This represents continued growth in the non-manufacturing sector at a slower rate.
According to the NMI®, 14 non-manufacturing industries reported growth. There has been a second consecutive month of pullback in the rate of growth. Overall, the majority of respondents’ comments indicate that they finished the year on a positive note. They also indicate optimism for business conditions and the economic outlook going forward.
Good news but the slower rate of growth is concerning. Still, a win is a win, even if it isn’t pretty.
Americans Owe More, Save Less, and Are Poorer Than in Decades
A greater share of Americans have more debt than money in the bank than at any point since 1962, according to Deutsche Bank economist Torsten Slok. And, in a note to clients yesterday, Slok said that, despite record stock market wealth and home price levels just shy of housing-bubble highs, Americans are poorer than at any point in nearly a quarter century.
The data suggest that the third-longest economic expansion in history, and the lowest jobless rate in 17 years, has benefitted an exceedingly thin slice of the American public.
Disturbing to say the least. Stuff like this makes it more important than ever for everyone to make smart financial decisions and be very budget conscious!
That is it for today! Be sure to subscribe so you never miss another post!