Discussing the latest reports on mortgage rates, jobless claims, several positive economic reports, home prices increase again and much more
Time once again to look at this week’s report on mortgage rates! Did rates increase again?
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 4.40% with an average 0.5 point
- This is up from last week when it averaged 4.38%
- Last year at this time, 30-year fixed-rate mortgages averaged 4.16%
- 15-year fixed-rate mortgages averaged 3.85% with an average 0.5 point
- This is up from last week when it averaged 3.84%
- Last year at this time, 30-year fixed-rate mortgages averaged 3.37%
Len Kiefer, Deputy Chief Economist at Freddie said:
Fixed mortgage rates increased for the seventh consecutive week, with the 30-year fixed mortgage rate reaching 4.40 percent in this week’s survey; the highest since April of 2014. Mortgage rates have followed U.S. Treasurys higher in anticipation of higher rates of inflation and further monetary tightening by the Federal Reserve. Following the close of our survey, the release of the FOMC minutes for February 21, 2018 sent the 10-year Treasury above 2.9 percent. If those increases stick, we will likely see mortgage rates continue to trend higher.
Ouch! Check out the chart showing the dramatic upturn in mortgage rates:
Pretty dramatic but remember these average rates are still VERY low compared to some of the rates that home buyers paid in the not too distant past.
The Mortgage Bankers Association reported:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to its highest level since January 2014, 4.64%, from 4.57%, with points increasing to 0.61 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) increased to its highest level since January 2014, 4.62%, from 4.55%, with points increasing to 0.50 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since April 2011, 4.02%, from 4.00%, with points increasing to 0.66 from 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Wow, not good news from the MBA either. These are the average rates and may not reflect what is realistic or possible for you.
This is why all serious home buyers need to talk to the mortgage lender of their choice to discuss their options and possibilities. You may be pleasantly surprised!
Jobless Claims Decrease
In the week ending February 17, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 7,000 from the previous week’s revised level. The 4-week moving average was 226,000, a decrease of 2,250 from the previous week’s revised average.
Excellent news! This is the 155th week that claims were below 300,000 and that is supposed to indicate a strong labor market.
Check out the chart showing the 4 week moving average:
Hopefully this will continue and we will see much needed wage growth for all Americans. Which could lead to more home sales and even more improvement in the economy…
Architecture Billings Index Saw Its Highest January Score Since 2007
From the American Institute of Architects:
2018 started on a strong note for architecture firms, as the Architecture Billings Index saw its highest January score since 2007. The American Institute of Architects (AIA) reported the January ABI score was 54.7, up from a score of 52.8 in the previous month. This score reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.1, down from a reading of 62.0 the previous month, while the new design contracts index increased slightly from 53.4 to 53.9.
AIA Chief Economist, Kermit Baker, said:
Healthy conditions continue across all sectors and regions except the Northeast, where firm billings softened for the second consecutive month. With strong billings and healthy growth in new projects to start the year, firms remain generally optimistic about business conditions for the next several months.
This is an important indicator for nonresidential construction activity. Since we need a healthy economy for a healthy housing market, it is important to you and I.
Total U.S. Weekly Rail Traffic Increases
For this week, total U.S. weekly rail traffic was up 3.1 percent compared with the same week last year. Total carloads for the week ending February 17 was down 0.6 percent compared with the same week in 2017, while U.S. weekly intermodal volume was up 6.8 percent compared to 2017.
Overall, a positive report and yet another good sign for the economy.
How Much the Banks Have Been Fined Since the Financial Crisis
From Market Watch:
Banks have been fined a staggering $243 billion since the financial crisis, according to a tally released Tuesday. Most of these fines have been assessed for misleading investors about the underlying quality of the mortgages they packaged into bonds during the housing bubble.
The list of banks reads like a who’s who of evil and BofA leads the pack with over $76 BILLION paid. But how much did these fines really affect their profits?
Since no big CEOs or executives went to jail, were there any lessons learned?
US Home Values Increased 6.7% YoY
Even as demand for homes remains hot and inventory is historically low, national home values rose at their slowest annual pace in 15 months in January, up 6.7 percent year-over-year to a median home value of $207,600.
It’s the slowest growth since November 2016 and follows a year in which homes regularly gained more than 7 percent from the prior year – including a 7.6 percent jump in May 2017, the fastest pace since June 2006 in the midst of the housing bubble.
I hate to quote anything from Zillow because of the reputation for inaccurate home values and questionable listings of homes NOT for sale.
I keep repeating that home prices AND mortgage rates are rising to illustrate that IF buying a home makes sense for you, waiting or delaying will be cost you!
That being said, this is a national report and and buyers and sellers MUST remember that it is their local real estate market that truly matters. Having a local experienced Realtor is essential to being successful when buying or selling!
The reasons you must use a local Realtor have not changed but have been strengthened by higher mortgage rates and house prices. Check out some of the reasons you NEED to work with a Realtor:
Every state has unique rules and laws for the sale of real estate. These regulations changing all the time. A good Realtor can help you with the various required paperwork you must complete when buying or selling real estate.
Did you know there can be over 180 possible steps for a successful property sale? You need someone with the experience and knowledge to advise you to avoid any deal killers and to prevent you from making expensive mistakes!
Can you remain completely unemotional during the negotiation? How many real estate transactions have you been involved with?
A successful Realtor is involved in more sales per year than most people will encounter in a lifetime. Why not have someone with this experience on your side?
I just mentioned how inaccurate Zillow can be about home values. Have you thought about how you will determine the correct value of a property?
Correctly pricing a home is essential to it selling quickly and for top dollar. According to a recent study, selling without a Realtor leads to a lower price than similar homes sold with the professional guidance of a Realtor.
Local Housing Market Knowledge
Do you really understand what is happening in your local real estate market? Do you really know everything you need to know to be successful when buying or selling real estate?
Dave Ramsey, the famous financial advisor, said:
When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.
Think about how much of this blog is sharing knowledge and information. I try really hard to share stuff that could help people avoid costly errors when buying or selling.
And I try really hard to avoid sales pitches or proclamations of how great I am. I just want to share knowledge that will help people…