Discussing the latest mortgage rate reports, buying a home is a priority for most people, the low inventory of homes for sale and more!
The FHFA reported:
Nationally, interest rates on conventional purchase-money mortgages increased from February to March, according to several indices of new mortgage contracts.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.49% for loans closed in late March, up 21 basis points from 4.28% in February.
The average interest rate on all mortgage loans was 4.42%, up 18 basis points from 4.24% in February.
The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.54%, up 18 basis points from 4.36% in February.
The effective interest rate on all mortgage loans was 4.50% in March, up 16 basis points from 4.34% in February. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
The average loan amount for all loans was $317,300 in March, up $5,400 from $311,900 in February.
This is a little dated since it is talking about March. But it is still good info since it prepares you for the increases reported by Freddie and the MBA!
Freddie Mac reported:
- 30-year fixed-rate mortgages averaged 4.58% with an average 0.5 point
- This is up from last week when it averaged 4.47%
- Last year at this time, 30-year fixed-rate mortgages averaged 4.03%
- 15-year fixed-rate mortgages averaged 4.02% with an average 0.4 point
- This is up from last week when it averaged 3.94%
- Last year at this time, 15-year fixed-rate mortgages averaged 3.27%
This is the highest mortgage rates in 4 years according to Freddie Mac!
Sam Khater, Freddie Mac chief economist, said:
Higher Treasury yields, driven by rising commodity prices, more Treasury issuances and the steady stream of solid economic news, are behind the uptick in rates over the past week. Despite the increase in borrowing costs, demand for home purchase credit remains solid. The Mortgage Bankers Association reported in their latest mortgage applications survey that activity was up 11 percent from a year ago.
Speaking of the MBA, they 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 September 2013, 4.73%, from 4.66%, with points increasing to 0.49 from 0.46 (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, 4.64%, from 4.53%, with points increasing to 0.39 from 0.38 (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, 4.13%, from 4.08%, with points increasing to 0.52 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Some buyers may find extra motivation from the increasing mortgage rates. While the chart above does show mortgage rates increasing dramatically, the key thing to remember is this is the average mortgage rates.
What is possible for one person is different than what is possible for someone else. The best thing for anyone serious about buying a home is to sit down with several mortgage lenders to discuss their options.
Look at all the various mortgages that you might consider and the down payment and closing costs you will need for each. I also strongly suggest getting Pre-Approved to help you determine your home buying budget!
Weekly Initial Unemployment Claims Decrease
In the week ending April 21, the advance figure for seasonally adjusted initial claims was 209,000, a decrease of 24,000 from the previous week’s revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week’s level was revised up by 1,000 from 232,000 to 233,000. The 4-week moving average was 229,250, a decrease of 2,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 231,250 to 231,500.
A good report obviously since this is the lowest level for initial claims since 1969. But we have to remember that the Fed will look at strengthening employment numbers as they decide whether or not to raise their benchmark interest rate.
While the Fed does NOT directly set mortgage rates, it will put upward pressure on mortgage rates when they raise their benchmark rate. The main thing to watch is Treasury yields since mortgage rates increase as they do.
7 in 10 Americans Want to See Minimum Wage Raised
Interesting stuff from The Intercept:
One of the nation’s most powerful anti-minimum wage lobbying groups tapped a longtime Republican pollster to survey the public about a range of issues impacting the industry.
The poll — which was presented on a slide deck obtained by The Intercept and Documented — found that seven in 10 Americans want to see the minimum wage raised even if it means that they’d have to pay more for meals. It also found that the industry’s various talking points against raising the wage are mostly falling flat with the general public.
Conducted by GOP pollster Frank Luntz’s firm LuntzGlobal on behalf of the other NRA — the National Restaurant Association — the poll found that 71 percent of people surveyed support raising the minimum wage to at least $10 an hour.
Not only were the results of this poll interesting but so is the fact that the results were leaked because it goes against the wishes of the people paying for the poll.
There are many arguments for and against raising the minimum wage. We won’t really know what will happen unless the minimum wages is raised but then there is no going back.
There is no doubt that we need to see incomes increase for the average American. If average Americans start making more money, would it lead to more economic growth and more home sales?
75% of Americans Say Buying a Home is a Priority
Highlights from NerdWallet 2018 Home Buyer Report:
- 75% of Americans say buying a home is a priority
- 32% plan to buy a home in the next 5 years
- 64% of those that want to buy a home say it is because it is a good investment
- Only 17% prefer renting over owning a home
- 82% of people between 18-34 years old say that buying a home is a priority
The Number of Homes for Sale is Still Historically Low
Home shoppers have almost 9 percent fewer homes to choose from than a year ago, and more than half of them are high-end homes.
There’s a serious mismatch in the U.S. housing market right now: The majority of homes available to buy aren’t the kind of homes the majority of buyers are seeking. And the limited inventory of those more sought-after homes is contributing to their more rapid appreciation.
Adding salt to the wound for entry-level buyers is the fact that not only is supply in that segment more limited, it’s also falling more quickly – and getting more expensive more quickly, too. Inventory of entry-level, bottom-third homes fell 15.3 percent year-over-year in March, compared to a relatively slight 4.9 percent annual decline in inventory among top-third homes. And the median U.S. bottom-third home grew 11.5 percent in value over the past year, more than double the annual growth of top-third homes over the same time (5.6 percent).
Ouch! You would think that the demand for entry-level homes would persuade home builders to focus on this segment of the market. The rising cost of materials and the high costs due to government regulations makes it hard or impossible for many builders to build starter homes.
The good news for home buyers in our area is that there are options. It is possible to buy an entry-level home in Anderson County SC IF you are properly prepared and working with a local experienced Realtor!
Something else to consider is that according to the latest Existing Home Sales Report from NAR, home sales in March were at the strongest pace since November of last year! This is despite the inventory of homes for sale decreased year-over-year for the 34th consecutive month!
Check out the statistics from the latest NAR Existing Home Sales Report:
As you can see, despite the tight inventory, plenty of homes are selling! The key is that home buyers must be prepared, educated and working with a Realtor in today’s fast paced market!
Well that is all I have time for today! Please hit the share buttons and sign up for free email notifications of new posts!