Monday, December 15, 2014

Mortgage Rates Up, But Remain Below 4%

After four weeks of decreases, the 30-year fixed-rate mortgage inched up slightly this week, but stayed near yearly lows under 4 percent, Freddie Mac reported in its weekly mortgage market survey.
Freddie Mac reported the following national averages with mortgage rates for the week ending Dec. 11:
  • 30-year fixed-rate mortgages averaged 3.93 percent, with an average 0.5 point, rising from last week’s 3.89 percent average. Last year at this time, 30-year rates averaged 4.42 percent.
  • 15-year fixed-rate mortgages averaged 3.20 percent, with an average 0.5 point, rising from last week’s 3.10 percent average. A year ago, 15-year rates averaged 3.43 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 2.98 percent, with an average 0.5 point, rising from last week’s 2.94 percent average. Last year at this time, 5-year ARMs averaged 2.94 percent.
  • 1-year ARMs averaged 2.40 percent, with an average 0.4 point, dropping slightly from last week’s 2.41 percent average. A year ago, 1-year ARMs averaged 2.51 percent.
Source: Freddie Mac

Median Home Price Remains 4.9% Below Peak

Since the housing crisis national median home prices have been on the rebound, but still haven’t caught up to the peak reached in the third quarter of 2005. At that point, national median home prices reached $227,633. Flash forward nine years later in the third quarter of 2014 and the national median home price remains 4.9 percent below the peak at $216,367, according to National Association of REALTORS®’ data.
Still, many local markets already have surged ahead of previous peaks. In fact, 87 of the metro areas NAR tracks saw an increase in median home prices in the nine years since the national market's price peak.
Most notably North Dakota markets, due to an oil and energy boom in the state, have seen median prices climb. In Bismarck, prices have surged 87.2 percent from the third quarter of 2005.
Many Texas markets also are performing above the 2005 peak for many of the same reasons. For example, the Austin-Round Rock area saw its median price in that timeframe climb 47.2 percent; the Houston-Baytown-Sugar Land area is up 39.6 percent; and Amarillo, Texas, is up 35.6 percent.
Several markets in the Midwest (Des Moines: +21.9% and Springfield, Ill.: +21.7%) and along the East Coast (Elmira, N.Y.: +43.2% and the Charlotte area: +31.6%) saw increases to median home prices since the nationwide peak.
On the other hand, many markets still have a long way to go to catch up to the peak. For example, areas in California, Arizona, Nevada, and Florida that were shaken by big drops during the housing crisis are still on the mend. For example, the Tampa-St. Petersburg-Clearwater, Fla., area still is posting prices down 32.1 percent compared to 2005; the Sacramento area is posting a 29.2 percent decrease; and the Phoenix-Mesa-Scottsdale area of Arizona is showing a 25.2 percent decrease in that timeframe.
See how your market performed by logging in to the Local Market Reports for the third quarter at
Source: “Home Prices Rebound, But Still Down From Peak,” National Association of REALTORS® Economists’ Outlook Blog (Dec. 11, 2014)

Sunday, December 7, 2014

Mortgage Rates at Lowest Point Since May 2013

The 30-year fixed-rate mortgage sunk to a 3.89 percent average this week, its lowest level since May 30, 2013. That translates to more mortgage savings for home buyers and refinancers.
Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 4:
  • 30-year fixed-rate mortgages: averaged 3.89 percent, with an average 0.5 point, dropping from last week's 3.97 percent average. Last year at this time, 30-year rates averaged 4.46 percent.
  • 15-year fixed-rate mortgages: averaged 3.10 percent, with an average 0.5 point, dropping from last week's 3.17 percent average. A year ago, 15-year rates averaged 3.47 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.94 percent, with an average 0.5 point, dropping from last week's 3.01 percent average. Last year at this time, 5-year ARMs averaged 2.99 percent.
  • 1-year ARMs: averaged 2.41 percent, with an average 0.4 point, dropping from last week's 2.44 percent average. A year ago, 1-year ARMs averaged 2.59 percent.
Source: Freddie Mac

70% Unaware of Down-Payment Assistance

Seventy percent of adults in the U.S. say they're unfamiliar with down-payment assistance programs for middle-income home buyers in their community, according to a NeighborWorks America survey of 1,000 people. But plenty of help is available.
NeighborWorks organizations provided 6,000 buyers with more than $100 million in down-payment assistance last year. NeighborWorks expects to increase its assistance this year, too. Many local and state organizations offer down-payment assistance as well, and there are specialized programs for military vets through the Veterans Affairs loan program, for first-time buyers through the Federal Housing Administration, and for rural home buyers through the U.S. Department of Agriculture.
"Down-payment assistance programs make home purchasing more accessible for first-time buyers," says Marietta Rodriguez, vice president of Homeownership Programs and Lending at NeighborWorks America. "In addition, because many down-payment assistance programs require home-buyer education, these purchasers tend to be more successful in the long-term. Research has shown pre-purchase counseling helps reduce mortgage default and equips home owners with the information they need to budget for other expenses and maintain their property."
Source: NeighborWorks America

Wednesday, December 3, 2014

Holiday Distracts Refi, Mortgage Shoppers

Home owners didn’t seem to want to carve out a lower mortgage rate for Thanksgiving. Last week’s holiday week marked a slow one for mortgage applications, attributed mostly to a plunge in refinancing activity, even as mortgage rates dropped to an 18-month low.
Refinancing activity dipped 13.4 percent in the week ending Nov. 28, while loan applications for home purchases, viewed as a gauge of future home buying activity, rose 2.5 percent, according to the Mortgage Bankers Association’s seasonally and holiday-adjusted index. Loan applications for home purchases is still 4 percent below year-ago levels.
Overall, the MBA’s index of mortgage application activity, reflecting both refinances and home purchase demand, dropped 7.3 percent last week.
Meanwhile, the average 30-year fixed-rate mortgage dropped from 4.15 percent to the previous week to 4.08 percent, the lowest since May 2013, the MBA reports.
Refinance activity is 16 percent below levels from a year ago.
"Interest rates dropped through the course of last week, but the holiday likely delayed home owners from acting on that drop in rates to refinance,” says Michael Fratantoni, the MBA’s chief economist. “We would need rates to drop back below four percent to generate substantial refinance activity."
Source: “Mortgage Refinancing Falls Despite Rates at 18-Month Low,” CNBC (Dec. 3, 2014)

Buyers Are Paying More for ‘New’

Rising prices may be putting new homes out of reach of more buyers. The median price of a new home sold in the United States climbed 15 percent from a year earlier. The median new-home price is now $305,000, which is the highest level on record, according to the Commerce Department.
Historically low interest rates, near 4 percent, and an improving labor market have helped to increase new-home sales, but sales were up only 1 percent in the first 10 months of this year compared with the same period in 2013. What’s more, October’s annual sales pace is only about half the average annual level of sales from 1996 through 2006.
“I think we saw a little price resistance from the consumer,” says John Johnson, David Weekley Homes' chief executive. “There are a bunch of people who are waiting until they feel more confident about the future.”
Builders are selling fewer, more expensive homes, and those higher-end homes are making it more profitable for them, analysts say.
Meanwhile, as home appreciation has slowed, sales of more affordable existing-homes are increasing in recent months. Pending home sales are up 2.2 percent in October compared to a year ago, according to the National Association of REALTORS®.
The median existing-home price for all housing types in October was $208,300, nearly $100,000 less than the median price for a new home.
"The increase in median prices for existing homes has leveled off, representing a healthier pace that has kept affordability in check for buyers in many parts of the country while giving more previously stuck home owners with little or no equity the ability to sell," Lawrence Yun, NAR’s chief economist, said in a recent statement about pending home sales.
Source: “New-Home Prices Surge Despite Lackluster Demand,” The Wall Street Journal (Dec. 1, 2014) and “Soft New-Home Sales Weigh on Recovery,” The Wall Street Journal (Nov. 27, 2014)

10-Year Review: How’s Housing Really Doing?

The housing market has made some strides in recent months, but how has it performed compared to 10 years ago? Has the real estate market really dug itself out of the housing crisis?
The National Association of REALTORS® on its Economists’ Outlook blog recently used the latest October housing data to compare existing home sales, median sales prices, and inventory figures to those from 10 years ago. Researchers used the 10-year October average, an average of the data from the past 10 Octobers, to gauge how current market conditions stack up.
Home sales
Leader: October 2014
The number of homes sold was higher in October 2014 than the 10-year October average. That particularly holds true in the Midwest and South. The Northeast and West were the only regions in the country to show current sales below the 10-year October average.
Home prices
Leader: October 2014
The median home price is currently higher than the 10-year October average in all regions except the Northeast. “The median price year-over-year percentage change shows home prices struggling from 2006 to 2011,” NAR economists note on the blog. “Since then home prices began to improve, however, price growth has been decelerating over the last year.” The best price percentage increases occurred in 2005, except in the West, which had its best gains in 2012, NAR economists note. For October 2014, the Midwest had the highest year-over-year price percentage change compared with the other three regions of the United States.
Leader: 10-year October average
Home buyers had more options in the past. There was a higher inventory of homes for sale in the 10-year October average than what’s currently available. The nation saw the fastest pace of homes sold relative to inventory in 2004, while 2007 marked the slowest pace, with the months’ supply climbing to 10.6. The 10-year October average months’ supply is 7.2, compared with October 2014, which was at a 5.1 months’ supply.
Source: “October 2014 EHS Data vs. the Ten-Year October Average,” The National Association of REALTORS® Economists’ Outlook Blog (Dec. 2, 2014)