Uncommon Knowledge
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Before browsing properties, talking with a real estate agent, or researching market trends, the first step to homeownership is to save for a down payment. But this is also one of the more challenging and time-consuming aspects of buying a home. According to the National Association of Realtors® Profile of Home Buyers and Sellers, 38% of first-time homebuyers said saving for a down payment was the most difficult step in the home buying process. This is understandable given that the majority of buyers (54%) rely on personal savings to fund their down payment. So if you’re a prospective buyer hoping to get into the market soon, how long does it actually take to save for a down payment?
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To find out how long it would take for a median-income household to save for a down payment, Zoocasa analyzed single-family median home prices in 50 cities across the US and calculated what the 15% down payment would be in each. We then analyzed the median household income in each city, according to the most recent US Census Bureau data, and calculated how many years it would take to save for the 15% down payment, assuming they are saving 10% of their annual income. According to the National Association of Realtors®, in 2023 the median percent down payment for all home buyers was 15%.
You can realize your homeownership dreams the fastest in Buffalo, where it takes 4.9 years to save for a 15% down payment of $33,000. Despite having a moderate median household income of $68,014, Buffalo’s affordable single-family home price – around $170,000 below the national median price of $393,500 – helps to push the city to the top of the list. Pittsburgh and Wichita follow, both requiring 5.2 years to save for a 15% down payment of $31,530 and $31,590 respectively.
Of the top 5 cities requiring the least amount of time to save for a down payment, those in Virginia Beach have the highest median household income at $87,544. This means Virginia Beach buyers require just 5.7 years to save for a 15% down payment of $50,250. Oklahoma City rounds out the top 5, where a 15% down payment of $37,500 and a median household income of $64,251 mean that it will take 5.8 years to save for a down payment.
For the majority of cities, however, it will take prospective buyers more than 8 years to save for a down payment. Even in relatively affordable cities like Albuquerque and Houston, where the median single-family home price is below the national median, buyers will need to save for 8.2 years and 8.6 years respectively. This is largely because, with median household incomes hovering around $60,000 in both Albuquerque and Houston, homebuyers need more time to save compared to those in higher-earning cities like Atlanta or Austin.
With that being said, higher incomes don’t always translate to shorter savings times if the home prices are also exceedingly high. For instance, in San Francisco, the median household income is $136,689 but the median home price is $1,386,500 – nearly 10x the annual income of a household. That means homebuyers in San Francisco will need to save for 15.2 years to be able to come up with a 15% down payment of $207,975. Homebuyers in Boston, Miami, and Los Angeles will require similarly long savings timelines of 15.1 years, 14.7 years, and 14.4 years respectively.
But not all big cities require a long time to save for a down payment. Thanks to its high median household income of $116,068, those in Seattle only need to save for 8.2 years for a 15% down payment of $95,058. Similarly, in Chicago, it would take a median-income buyer 7.1 years to save for a 15% down payment, and in Philadelphia, it would take just 6.5 years.
Want to discuss your options in one of these cities? Give us a call today to learn what properties are available in your budget.
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Source: zoocasa.com
Borrowing money for home repairs and other projects this spring can be very expensive. For example, if you take on debt via a 24-month personal loan, you can expect to pay an average interest rate of 12.49%, according to the Federal Reserve. Credit cards charge even higher rates at an average of 21.47% currently.
One way to borrow money at a typically lower rate than credit cards or personal loans is to tap into your home equity with a home equity loan or home equity line of credit (HELOC). However, there are pros and cons to borrowing against your home equity to finance spring repairs, and you might find that certain situations make this financing more feasible than others.
Learn more about the best home equity loan rates you could qualify for here.
Tapping into your home equity can provide several benefits, like saving money on interest charges in the long run and improving your home. Some specific situations to consider using home equity for spring repairs include:
If you can find a way to borrow against your home equity in a way that lowers your total tax liability more than the cost of borrowing, that could be worth it. Through 2025, interest on home equity loans and HELOCs may be deductible if used for making substantial improvements to your home, provided that you meet other stipulations.
“Whether you’re boosting potential resale value or enhancing your home, using home equity for repairs is a great choice, capitalizing on lower interest rates in comparison to unsecured consumer loans, and potential tax deductions,” says Kelly Miskunas, head of capital markets at Better.
That said, tax considerations are not one-size-fits-all.
“Remember to seek personalized tax advice tailored to your financial circumstances,” says Miskunas.
Compare today’s best home equity borrowing options online now.
Home equity funds could also be beneficial when put toward making energy-efficient upgrades to your home. Doing so could help you lower monthly utility bills, says Karl Jacob, CEO at LoanSnap.
Also, energy efficiency upgrades like adding solar panels and batteries “have substantial tax rebates,” says Jacob. “It’s definitely worth checking the federal and state rules on this.”
Your home equity can also be useful for affording maintenance issues that save you money or boost your home’s value overall.
“Ignoring items that need repair can turn a small repair into a major, costly project,” says Michael Micheletti, chief communications officer at Unlock Technologies.
Home equity financing can also help you afford the required maintenance.
“Taking care of needed repairs also is part of most homeowners’ association regulations; many will impose fees if repairs are not attended to in a timely manner,” says Michaeletti.
While using home equity for spring repairs is often helpful, not every homeowner benefits from this borrowing. Consider alternatives when:
Tapping into your home equity might help you afford the upfront cost of home renovations, but if you don’t have a clear repayment plan, you’re risking a lot.
“When you get a home equity loan or HELOC, it’s important to remember that the loan you’re obtaining is secured by your home as collateral. That means if you do not make timely payments on your loan, the lender has the right to foreclose,” says Miskunas.
So, make sure you know what you’re getting into ahead of time.
“If you don’t have a plan to repay the loan, don’t take the loan,” says Jacob.
If you have a lot of existing high-interest debt, you might be better off taking care of that first, before making repairs or upgrades to your home. Rather, you might use home equity financing for debt consolidation instead, which could lower your monthly payments.
“If you have a lot of high-interest debt, like credit cards, use the loan to pay those off before you consider home improvements. We generally advise that you first reduce your debt payments as much as possible since you can then use the extra cash to make the improvements and save money for the long run,” says Jacob.
If you’re not going to keep your home for a while, it might not be worth going through the cost and effort of taking out a home equity loan and living through home improvement projects. Instead, you might let the next buyer deal with repairs.
“For most repairs, the price can be negotiated into the sale of the home,” notes Micheletti.
Tapping into your home equity can be a great way for many homeowners to afford home improvements this spring, and there are several ways to go about this borrowing. While home equity loans and HELOCs are popular options, some homeowners find that a cash-out refinance works best, such as if you have the ability to lower your overall mortgage rate. Also, some seniors might prefer taking out a reverse mortgage instead so they don’t have to pay back the loan while living in the home.
That said, borrowing against your home equity isn’t without risk. You want to make sure you can afford repayments or understand that it can affect your proceeds if selling your home — or if you move out, in the case of reverse mortgages.
Source: cbsnews.com
This might not be Texas or a hold-em, but you can still design a place fit for your “Cowboy Carter” era. Whether you’re renting a house in fast-paced Northeastern cities like Philadelphia or an apartment deep in the heart of San Antonio, TX, you can find the cowboy-inspired touches that give your house a rustic, down-home appeal that feels true to your lifestyle.
At Rent., we turned to the experts who specialize in Western design and curated our very best suggestions from them. Our roundup includes interior stylists, art specialists, lifestyle bloggers, and others, so keep reading to see their recommendations.
Western styles such as “cowboy chic” give apartment and home dwellers a mix of cozy, rugged, and lived-in that feels approachable. “After all, it’s the versatility of Western designs that makes this accessible trend popular in the first place, as Lacey Boyer of her eponymous Lacey Boyer Interior Design says. “The popularity of Western decor taps into a broader cultural fascination with nostalgia, authenticity, and a longing for connection to rugged landscapes and simpler times. The enduring appeal of cowboy-chic lies in its versatility. It’s not merely a fleeting trend but a timeless aesthetic that can be adapted to various design sensibilities, from modern rustic to eclectic bohemian.”
It seems that other designers agree. According to Alex Woulf of Sustainably Staged, ” Western decor is poised to make a stylish comeback, and there’s no better time to explore the intersection of heritage-inspired aesthetics and modern design principles. From rugged textures to earthy palettes, there’s a richness and authenticity to Western-inspired interiors that I find utterly captivating.
Laura Medicus of Laura Medicus Interiors, a premier home design studio in Denver, also weighs in: “When Beyonce sings about Levi Jeans and line dancing, we pay attention. Cowboy chic is a cool Western vibe that’s lived in, it embraces vintage finds and is pulled together with dark colors and metallic shine. In 2024, this is inclusive of Western Americana with moody colors, fringe, denim, and worn leather.”
While anyone can add elements of this aesthetic to their homes, it’s going to feel more authentic in Western or Western-adjacent areas, like the desert areas or the Midwest. With that said, anyone can introduce cowboy-chic to their interior design. No need to gatekeep here!
As Casey Coleford of the California-based design firm, Casey Coleford Interior Design, posits, “Western-themed elements will always have a place in interior design. Whether it be a cowhide rug, wrought iron hardware, or a collection of cowboy hats hung on the wall. Geography also has a lot to do with what you’ll find in any given room: It is expected in heartland states (think Cracker Barrel). Incorporating Western elements pays homage to our settlers, and won’t be affected by music trends.” he says.
According to studio mtn founder Sierra Fox, “Western influence is everywhere, permeating beyond interior design; models dating cowboys, beach girls in cowboy boots, and a vacation on a ranch to see a rodeo is reigning over tropical getaways and city stays.”
While Fox and her team are inclined to protect their own private Idaho, they are also embracing the Western movement as a whole. “For example, studio mtn loves seeing the resurgence of worn leather, the warmth of reclaimed wood and patinated metals, and the timeless allure of rustic finishes. Western style goes beyond just aesthetics — it captures the essence of adventure, resilience, and a connection to nature. When done right, any space can tap into the soulful energy of the American West.”
One Western decor idea to try is pretty low-commitment: Simply add a cowboy-chic rug to the floor to see if you fancy this trend. For example, cowhide rugs provide a fresh take on an animal print that feels more on-trend than, say, leopard print.
According to Alicia at Rodeo Cowhide Rugs, “Affordability has also made cowhide rugs more accessible, once seen as luxury items, they are now within reach for a broader audience. Additionally, they align perfectly with the latest design trends, including bohemian chic and Scandinavian minimalism. In particular, as Western themes gain popularity each year, cowhide rugs have become essential for creating an authentic cowboy-inspired decor, enhancing the rugged yet refined aesthetic of Western-themed spaces.”
Want to display your Western decor more prominently? Dress up your wall with some tapestries or art.
“Western art portrays a unique time in history,” explains renowned Arizona-based artist Miguel Camarena. “The modern western look is trending because of the simplicity and elegance of the rustic modern decor and its simple use of muted colors such as warm and cool greys of the whole hue scale.
An example of this would be my “White Horse” painting. At the same time, there is the opposite end of the spectrum where whimsical and high key colors can add a pop of color and accent to most homes, which is why my “Donkey Collection” has become famous worldwide.”
Rustic decor gives your space an unfinished look, whether or not you’re committing to a fully Western decor scheme. Think live-edge dining tables, reclaimed wood furniture, and well-worn leather when curating items.
This style exudes warmth and coziness through its use of organic textures and vintage-inspired furnishings, creating an atmosphere reminiscent of ranch side cottages or lodges set in the mountains. Some rustic decor bleeds into other down-home looks, such as modern farmhouse and shabby chic, allowing DIY designers to play around with different looks to find the self-expression sweet spot.
“We love seeing ‘cowboy core’ emerging in both fashion and home design,” says Patrick Burch, co-owner of Cave + Post Trading Co., an Arizona-based men’s boutique specializing in American heritage brands. “In our store and in our home, we like to use authentic Western pieces as decor. For example, we love to use cowboy hats from Spur Hats or Lost River Hat Co. as wearable wall art. Guitars mounted on the wall are another fun way to introduce a Western vibe.”
Similarly, Libby Palmieri of House of L Designs talks about how the runway’s influence is energizing the trend beyond the Western states: “As a designer, the usual requests for Western embellishments are typically found in dusty cowboy towns tucked away in Colorado, Montana, and Utah where home design can embrace the fantasy and bring the landscape strokes inside.
Now, however, the influence of runway fashion in the house of Louis Vuitton (for starters) with Pharrell at the helm and his Western-themed men’s spring 2024 retro cowboy collection and the music industry, with Beyonce’s new release of ‘Cowboy Carter,’ that is all about to change.”
“As a roofer who’s seen a fair share of houses over the years, I’d say trends come and go faster than a Texas tumbleweed,” says Brendan Anderson of Montana-based roofing company Brix Systems. “Now, this Beyonce country album buzz sure is something new. I wouldn’t say it’ll cause a full-on stampede toward Western decor, but it could definitely spur some folks on the fence. Here’s why…”
Anderson goes on to explain why pop culture influence might not supersede more practical considerations, like maintenance needs, location, or budget:
Commenting on the recent interest in Western decor ideas, Patrick Burch of Cave + Post Trading also adds, “Shows like Yellowstone were already popularizing Western fashion and design, and Beyonce’s “Cowboy Carter” is feeding that trend. Subtle Western touches go with so many styles — just like in fashion. You can add accent pieces to your home that don’t overwhelm, but add a cool Western touch.”
Source: rent.com
Americans are traveling abroad in droves.
The number of U.S. citizens flying to international destinations reached nearly 6.5 million passengers in March, according to the International Trade Administration. That’s the highest March total in over five years and shows that the post-pandemic “revenge travel” trend is the new normal.
It wasn’t just March, which usually sees a spike in international departures for spring break. In every month of 2024 so far, more Americans left the country than last year and 2019. These trends point to a blockbuster summer for overseas travel.
Nearly half of Americans (45%) plan to travel by air and/or stay in a hotel this summer and expect to spend $3,594 on average, on these expenses, according to a survey of 2,000 U.S. adults, conducted online by The Harris Poll and commissioned by NerdWallet.
That’s despite rising travel prices that have caused some hesitancy among would-be travelers. About 22% of those choosing not to travel this summer cite inflation making travel too expensive as a reason for staying home, according to the poll.
So where are traveling Americans going? And what does it mean for those looking to avoid crowds of tourists and higher travel prices?
Nearly every region in the world saw an increase in U.S. visitors in March 2024 compared with March 2023, according to International Trade Administration data. Only the Middle East saw a decline of 9%. Yet not every region saw the same year-over-year bump. U.S. visitors to Asia saw a 33% jump, while Oceania and Central America each saw a 30% increase.
Comparing 2024 with 2023 only tells part of the story, however. The new patterns really emerge when comparing international travel trends to 2019. For example, Central America received 50% more U.S. visitors in March 2024 compared with March 2019. Nearly 1.5 million Americans visited Mexico, up 39% compared with before the pandemic. That’s almost as many visitors as the entire continent of Europe, which has seen a more modest 10% increase since 2019.
Only Canada and Oceania saw fewer visitors in March 2024 than in 2019, suggesting that interest in these locations has not rebounded. Indeed, the trends indicate a kind of tourism inertia from COVID-19 pandemic-era lockdowns: Those destinations that were more open to U.S. visitors during the pandemic, such as Mexico, have remained popular, while those that were closed, such as Australia, have fallen off travelers’ radars.
How these trends play out throughout the rest of the year will depend on a host of factors. Yet, none will likely prove more important than affordability. After months of steadiness, the cost of travel, including airfare, hotels and rental cars, has begun to sneak up again.
About 45% of U.S. travelers say cost is their main consideration when planning their summer vacation, according to a survey of 2,000 Americans by the travel booking platform Skyscanner.
That’s likely to weigh further on U.S. travelers’ appetite for visiting expensive destinations such as Europe, while encouraging travel to budget-friendly countries. It could also depress overall international travel as well, yet so far, Americans seem to be traveling more.
For those looking to avoid crowds while maintaining a budget, Skyscanner travel trends expert Laura Lindsay offered a recommendation many of us might need help finding on a map.
“Albania has been on the radar of travelers looking for something different,” Lindsay said. “Most people have yet to discover it, but flights and tourism infrastructure are in place, and there are fewer crowds in comparison to trending European destinations like Italy, Greece, or Portugal.”
On the flip side, American travelers looking to avoid crowds of compatriots would do well to avoid Japan, which has seen a staggering 50% increase in U.S. tourists between March 2019 and 2024.
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:
Source: nerdwallet.com
Have you ever wondered, “Should I move to Atlanta, GA?” From the historic streets of the Martin Luther King Jr. District to the modern vibes of the Midtown arts scene, Atlanta offers a diverse experience that’s hard to find anywhere else. Whether you’re indulging in the world-famous Georgia peach cobbler or getting lost in the vast greenery of the Atlanta BeltLine, this city has a way of enchanting its residents. In this article, we’ll dive into the pros and cons of living in Atlanta to help you figure out if this dynamic city is the right place for you. Let’s jump in.
Walk Score: 48 | Bike Score: 42 | Transit Score: 44
Median Sale Price: $430,000 | Average Rent for 1-Bedroom Apartment: $1,850
Atlanta neighborhoods | Houses for rent in Atlanta | apartments for rent in Atlanta | Homes for sale in Atlanta
Atlanta’s economy is booming, with a strong presence in sectors like logistics, film, and information technology. Companies like Coca-Cola, Home Depot, and Delta Air Lines offer ample employment opportunities. This diversity in industries makes Atlanta an attractive place for people looking to advance their careers. The city’s job market is a significant draw for those seeking stability and growth.
One of the biggest challenges of living in Atlanta is dealing with traffic congestion. The city’s reliance on car transportation and its sprawling layout lead to heavy traffic during rush hours. Major highways like the I-285 and I-75/I-85 connector are often jam-packed, making commuting times longer than desired. This can be a daily frustration for some locals.
Atlanta has an exciting cultural scene, with an array of museums, theaters, and music venues. The High Museum of Art and the Fox Theatre host a variety of exhibitions and performances year-round. The city’s history in the civil rights movement, explored at the National Center for Civil and Human Rights, adds depth to its cultural landscape. Atlanta’s diverse cultural offerings cater to a wide range of interests.
Summers in Atlanta can be extremely hot and humid, making outdoor activities uncomfortable during peak months. Temperatures often soar into the 90s, with high humidity levels adding to the discomfort. This climate can be a significant drawback for those who prefer milder weather or enjoy spending a lot of time outdoors during the summer.
Despite its urban sprawl, Atlanta is home to numerous parks and green spaces. Piedmont Park, in the heart of Midtown, offers walking trails, sports facilities, and scenic views of the city skyline. The Atlanta BeltLine, a multi-use trail, connects neighborhoods with parks and markets. These green spaces provide residents with a much-needed escape from the urban environment.
Spring in Atlanta brings a significant challenge for allergy sufferers: pollen. The city’s abundant greenery contributes to high pollen counts, affecting air quality and causing discomfort for many individuals. This can be a considerable drawback for people with severe allergies, impacting their daily life during peak seasons.
Atlanta is a sports enthusiast’s dream, home to professional teams like the Falcons (NFL), Braves (MLB), and Hawks (NBA). The city also hosts major sporting events, offering residents and visitors alike a chance to engage in the excitement. Additionally, recreational leagues and facilities for sports like soccer, tennis, and golf are abundant, providing ample opportunities for active lifestyles.
While Atlanta has MARTA for public transportation, its reach is limited, making it challenging for those without cars to navigate the city efficiently. With a Transit Score of 44, the public transit system doesn’t cover all areas equally, forcing many residents to rely on cars. This limitation can be a significant inconvenience, especially for those seeking eco-friendly transportation options.
Atlanta’s entertainment industry, particularly in film and television, has seen remarkable growth. The city has become a popular filming location, dubbed the “Hollywood of the South.” This boom has created jobs and brought a spotlight to the city, offering unique opportunities for locals to engage with film and television productions. Atlanta’s role in the entertainment industry adds to its dynamic and creative atmosphere.
Source: rent.com
The recent rise of the average long-term U.S. mortgage rate, which poses a new obstacle to aspiring homeowners hoping to purchase a property during this homebuying season, could have dramatic consequences on the country’s housing market.
The national weekly average for 30-year mortgages, the most popular in the nation, was 6.88 percent as of April 11, according to data from the Federal Home Loan Mortgage Corp., better known as Freddie Mac. That was 0.06 of a percentage point higher than a week before and up 0.61 compared to a year before. The national average for 15-year mortgages was 6.16 percent, up 0.1 of a percentage point compared to the previous week and 0.62 compared to a year before.
Read more: How to Get a Mortgage
On Monday, experts monitoring mortgage rates on a daily basis noted that the national average for 30-year fixed mortgages reached 7.44 percent—the highest they’ve been so far this year and close to the 23-year weekly record of 7.79 percent reached on October 25, 2023. On Monday, the 15-year mortgage rate was 6.85 percent. At its peak on October 25, 2023, it had reached 7.03 percent.
“Big one-day jump,” commented journalist Lance Lambert on X, formerly known as Twitter. “The average 30-year fixed mortgage rate ticks up to 7.44 percent. New high for 2024.”
The rise in mortgage rates comes as homebuying season, a time when the number of homes listed for sale increases, is heating up. This climb in inventory starts in spring and normally peaks in summer before declining as the weather gets colder, marking one of the busiest times of the year for home sales. But higher mortgage rates could have an early chilling effect on the market.
Read more: Compare Top Mortgage Lenders
The median monthly U.S. housing payment hit an all-time high of $2,747 during the four weeks ending April 7, up 11 percent from a year earlier, according to a report from real estate brokerage Redfin last week. It noted that the average 30-year fixed mortgage rate, then at 6.82 percent, was more than double pandemic-era lows.
There’s not much hope that mortgage rates will come down soon, as the U.S. Labor Department said last week that inflation has risen faster than expected last month, at 3.5 percent over the 12 months to March. That was up from 3.2 percent in February.
“For homebuyers, the latest CPI [consumer price index] report means mortgage rates will stay higher for longer because it makes the Fed unlikely to cut interest rates in the next few months,” said Redfin Economic Research Lead Chen Zhao. “Housing costs are likely to continue going up for the near future, but persistently high mortgage rates and rising supply could cool home-price growth by the end of the year, taking some pressure off costs.”
Jamie Dimon, CEO of JPMorgan Chase, voiced concern last week over “persistent inflationary pressures” and said the bank was prepared for “a very broad range of interest rates, from 2 percent to 8 percent or even more, with equally wide-ranging economic outcomes.”
While the jump in mortgage rates appears modest, it makes a huge difference for borrowers, who might end up paying hundreds of dollars a month more on top of what’s already one of the most significant expenses in their lives.
Many might decide that they can’t afford to buy a home—which is what happened when mortgage rates suddenly skyrocketed between late 2022 and early 2023 as a result of the Federal Reserve’s aggressive interest rate-hiking campaign.
Between late summer 2022 and spring 2023, a drop in demand caused by the unaffordability of buying a home led to a modest price correction of the housing market. But prices have since climbed back due to the combination of pent-up demand and historic low inventory.
While the Federal Reserve doesn’t directly set mortgage rates, these are hugely influenced by the central bank’s decision to hike or cut interest rates. The Fed left rates unchanged in March and is considered unlikely to cut them this month considering the latest data on inflation.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
National mortgage rates moved higher for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans moved higher.
Some forecasters are rethinking the expectation that mortgage rates come down this year. Lenders price mortgages based on many variables, but overall, fixed mortgage rates follow the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions.
“The issue of inflation remains unsettled,” says Ken Johnson of Florida State University. “This is putting upward pressure on mortgage rates through the yield on 10-year Treasurys.”
The Fed indicated it’d cut rates in 2024, but policymakers held off at its latest meeting, citing the need for more promising economic data. The Fed has been working to bring inflation back to its 2 percent target since 2022.
The Fed meets next on May 1 — the start of one of the busiest homebuying months.
Whether mortgage rates move up or down, though, it’s difficult to time the market. Often, the decision to buy a home comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than chancing that buying a home will become more affordable.
Rates accurate as of April 23, 2024.
These rates are marketplace averages based on the assumptions here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, April 23rd, 2024 at 7:30 a.m. ET.
Today’s average 30-year fixed-mortgage rate is 7.30 percent, up 17 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 6.91 percent.
At the current average rate, you’ll pay principal and interest of $685.57 for every $100,000 you borrow. That’s an additional $11.51 per $100,000 compared to last week.
Most mortgage lenders defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers because it allows the borrower to scatter mortgage payments out over 30 years, keeping their monthly payment lower.
The average rate for the benchmark 15-year fixed mortgage is 6.76 percent, up 12 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $885 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.
The average rate on a 5/1 adjustable rate mortgage is 6.89 percent, up 10 basis points from a week ago.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to refinance or sell before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.89 percent would cost about $658 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
The average jumbo mortgage rate is 7.44 percent, up 4 basis points over the last week. Last month on the 23rd, the average rate on a jumbo mortgage was lower at 7.02 percent.
At today’s average jumbo rate, you’ll pay $695.11 per month in principal and interest for every $100,000 you borrow. That’s up $2.73 from what it would have been last week.
The average 30-year fixed-refinance rate is 7.31 percent, up 20 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was lower at 6.92 percent.
At the current average rate, you’ll pay $686.25 per month in principal and interest for every $100,000 you borrow. That’s an increase of $13.54 over what you would have paid last week.
If and when the Fed cuts interest rates depends on incoming economic data, such as the rate of inflation and the jobs market.
“While the majority of Fed members still expect three rate cuts this year, Atlanta Fed President Bostic is now predicting just one rate cut in the fourth quarter,” says Melissa Cohn of William Raveis Mortgage. “Not the news we want for the spring market.”
Keep in mind: The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate than the trend based on your own financial profile.
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
To help you uncover the best deal, get at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Source: bankrate.com
Connecticut’s rich historical heritage is evident in its well-preserved landmarks and museums. For example, the Mark Twain House in Hartford offers a glimpse into the life of one of America’s most beloved authors. This deep historical context provides residents and visitors alike with a unique window into the past.
Connecticut’s cost of living surpasses the national average, with notable spikes observed in housing, healthcare, and transportation expenses. In Greenwich specifically, the median sale price stands at $2,181,250, while the average rental price for a one-bedroom apartment hovers around $3,710, underscoring the challenges of affordability in the area.
Connecticut is home to some of the nation’s top educational institutions, including Yale University in New Haven. This access to quality education from primary levels through to higher education institutions ensures residents have ample opportunities for academic and professional development.
Connecticut’s winter weather can be harsh and unforgiving, with frequent snowstorms and freezing temperatures making outdoor activities challenging. Residents often contend with icy roads, hazardous driving conditions, and increased heating costs during the colder months. Cities like Waterbury often face significant snow removal challenges, impacting residents’ mobility and comfort.
Connecticut boasts natural beauty that captivates residents and visitors alike, from the picturesque coastline along Long Island Sound to the tranquil forests of the Litchfield Hills. Iconic destinations such as Gillette Castle State Park, with its stunning architecture set amidst lush woodlands, and the charming coastal town of Mystic, known for its historic seaport and maritime heritage, showcase the state’s diverse landscapes.
Major cities in Connecticut and the surrounding areas, such as Stamford and Hartford, often experience heavy traffic congestion. This can lead to long commute times and increased stress for residents. The congestion is particularly noticeable during peak hours on highways like I-95 and Route 15.
Connecticut’s vibrant arts and culture scene thrives with a plethora of museums, galleries, and theaters that cater to diverse tastes and interests. For instance, the Wadsworth Atheneum Museum of Art in Hartford stands as the oldest public art museum in the United States, showcasing a rich collection spanning thousands of years. Additionally, the Goodspeed Opera House in East Haddam is renowned for its world-class productions of musical theater, attracting theater enthusiasts from across the region.
Compared to larger metropolitan areas, some parts of Connecticut offer limited options for nightlife. While cities like New Haven and Hartford have some lively spots, smaller towns may lack the variety and vibrancy found in bigger cities, leading to fewer entertainment options in the evenings.
Connecticut’s outdoor recreation opportunities are abundant, offering residents and visitors a chance to explore the state’s natural wonders. From hiking along the Appalachian Trail to kayaking on the Connecticut River, outdoor enthusiasts have endless options to enjoy the great outdoors. Moreover, destinations like Sleeping Giant State Park with its scenic trails and Hammonasset Beach State Park with its sprawling beaches provide opportunities for hiking, swimming, picnicking, and birdwatching.
Connecticut’s seasonal allergies can pose challenges for residents, particularly during the spring and fall months. Pollen from trees, grasses, and weeds can trigger allergic reactions such as hay fever, sneezing, and itchy eyes for those sensitive to airborne allergens.
Connecticut’s transportation options offer residents convenient and accessible ways to navigate the state and beyond. With an extensive network of highways, including Interstate 95 and Interstate 91, commuting to neighboring cities like New York City and Boston is relatively straightforward. Additionally, the state’s Metro-North Railroad provides efficient rail service connecting major cities, while local bus systems offer reliable public transportation within urban areas.
Connecticut faces occasional natural disasters, predominantly hurricanes and severe storms, which can pose risks to residents and property. Coastal areas are particularly vulnerable to flooding and storm surges during hurricane season, necessitating preparedness and evacuation plans. Additionally, the state experiences occasional earthquakes, although they are less common and typically result in minimal damage.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
Source: apartmentguide.com
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Mon, Apr 22 2024, 11:28 AM
When I was a kid, whenever I would walk by a pay phone or newspaper vending machine, I’d check the coin change slot. Or periodically check under my Dad’s La-Z-Boy… every penny or dollar counted! (Nowadays, I still get excited when I find a forgotten quarter in my own pants or backpack.) Plenty of folks at last week’s Great River Conference were trying to do the modern equivalent of that by learning about the current vendor offerings of technology, or meeting with their current vendors to see if pennies or dollars could be saved on every loan given the current $12k+ cost per funded loan. Smart and compliant speed and efficiency are critical… speaking of which, found here, today’s podcast features an interview with Guaranteed Rate’s Victor Ciardelli on the company’s goal of closing a loan in one-day and how they will get there. This week’s podcasts are sponsored by Calque. With The Trade-In Mortgage powered by Calque, homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home.
Lender and Broker Products, Software, and Services
When people say they can see miles and miles on a clear day, they aren’t wrong: the horizon is about 3 miles away, with some variation depending on your height. And whatever may lie beyond, Dark Matter Technologies is helping lenders prepare with its first annual Horizon user conference. The event kicks off Wednesday at the Fontainebleau Miami Beach and will bring together hundreds of industry notables to network, get the inside scoop on Dark Matter’s innovation roadmap, and explore business trends including market growth strategies, AI, and cybersecurity. Feeling a little FOMO? Request a consultation today and your team could be working smarter with the Empower LOS, and catching some Florida sun, by this time next year.
Does it feel like your current point-of-sale vendor has lost focus on mortgage? As a mortgage-specialized partner, Maxwell is committed to giving lenders a competitive advantage in a changing mortgage market. With Maxwell Point of Sale, lenders can tailor workflows to fit the unique needs of their organization, so back-end teams can work quickly without costly interruptions. Compared to a top competitor, Maxwell Point of Sale averages a 5.9 percent higher pull-through rate from rate-lock to close. For the average lender using Maxwell POS, this equates to $42MM in additional loan volume. Schedule a call with the team to learn how Maxwell Point of Sale can start working for you, your borrowers, and your lending team quickly.
Take your accounting department from “Cost Center” to Revenue Generator” with Loan Vision & LV-PAM. Loan Vision customers report a 10 percent reduction in loan fallout, 30 percent+ decrease in days to close the books, and 20 percent+ reduction in accounting headcount. Interested in learning how Loan Vision can reduce internal costs and help you gain a competitive edge? Contact Carl Wooloff to schedule a call today.
LoanStream wants you to Spring into more business with its April Specials on Prime, Non-QM and Closed End Seconds now through April 30th, 2024. Includes 25 BPS Price Improvement on FHA/VA loans 620+ FICO (excludes DPA and CalHFA) on Prime, 25 BPS price improvement on all Non-QM loans (excludes Select) and 25 BPS Price Improvement on all Closed-End Seconds. Restrictions apply so contact your LoanStream Account Executive to learn more. Specials are valid for loans locked 4/1/2024 through 4/30/2024. Offers subject to change at any time, terms and conditions apply.
Symmetry Lending introduces its April Special for Piggyback Pricing! Enjoy a remarkable discount on Piggyback HELOC transactions until April’s end, including a -1.00 percent Spring Discount for qualified customers with a FICO score of 740+ and a draw of $200k+, equating to Prime + .25 percent margin. This offer demonstrates appreciation for clients’ support and trust. Ready to seize this opportunity? Connect with your Symmetry Lending Area Manager to formulate a plan for getting these solutions in front of your clients today!
eClosing Survey by STRATMOR
Today, Snapdocs released new industry research that found lenders using the company’s eClosing platform experience 18-day faster loan velocity than their industry peers. The survey was conducted by STRATMOR Group with data self-reported by mortgage lenders. I got a note from Michael Sachdev, CEO of Snapdocs that said eClosing technology, when paired with the right partner to scale adoption, is helping lenders set new industry benchmarks for loan processing speed, operating costs, and borrower satisfaction. So often we see vendors make claims about their product value, but this report is a good example of that validation being sourced directly from the lender users themselves.
Agency and Investor News
Last week, the Department of Housing and Urban Development issued a HUD final rule that it says will increase lender participation in the Section 184 Indian Housing Loan Guarantee program, strengthen regulations to meet growing demand, and ensure the program will remain a vital resource for Native American families for years to come. Miki Adams, president of CBC Mortgage Agency, a correspondent investor that is wholly owned by the Cedar Band of Paiutes in Utah, stated, “The Section 184 program is a vital tool for so many Native American homebuyers. The new regulations will bring more clarity and predictability to this important program, and we applaud the Administration for the improvements and their efforts to work closely with Tribal leaders and other stakeholders. There is still more that must be done to modernize the program and we look forward to working collaboratively with HUD on future improvements.”
Loss mitigation: what would you do? A borrower is out of work, is three months delinquent on their mortgage payments, has been offered a new job in another state, and will relocate within 60 days. They’re also unable to catch up on their arrears and have equity in the home. What should the servicer do? Review this and other scenarios from Fannie Mae’s March Loss Mitigation webinar and download the presentation.
Fannie Mae has launched “Mission Index,” a new initiative to sell agency mortgage-backed securities (MBS) that cater to socially conscious investors, aiming to attract more buyers to the market, Bloomberg reported. Fannie Mae assigns scores to MBS pools based on affordable rental housing availability, borrower location (high-poverty or rural areas), and other indicators, giving investors more visibility into the underlying mortgages and stimulate lending to underserved borrowers, potentially leading to lower interest rates for these borrowers.
Saving for a down payment is a barrier first-time homebuyers face. While there are numerous down payment assistance programs (DPA) available, it can be difficult for housing professionals to find programs that meet the specific needs of their borrower. Given the number of DPA programs in the market, there hasn’t been a consistent way to match the right DPA program to the needs of a particular borrower. To address this issue, Freddie Mac launched DPA One®, a free online solution to help DPA program providers reduce submission errors and program requirement questions from lenders by developing a single, standardized, online access point to manage their DPA program information. To learn more, read Freddie Mac’s case study about how one of Freddie Mac’s housing finance agency partners, Southeast Texas Housing Finance Corporation (SETH), is promoting affordable housing in the Southeast Texas community.
As part of a recent Fannie Mae Mortgage Lender Sentiment Survey® (MLSS) special topic analysis, Fannie’s economists surveyed senior executives of mortgage lending institutions to better understand how they feel about Technology Service Provider (TSP) solutions, particularly as TSPs have become an increasingly essential part of lenders’ day to day operations. The results are in a new Perspectives blog.
Ginnie Mae announced revisions to its monthly single-family reporting requirements to include expanded Payment Default Status (PDS) reporting. The expanded PDS dataset will include loan default information, any mitigation actions taken, and the timing of those actions. For more information regarding the transition to the new reporting requirements, see All Participants Memorandum (APM) 24-06.
In Bulletin 2024-1, Freddie Mac announced changes to trust income requirements pertaining to history of receipt for trust income with pre-determined fixed payments, and documentation of continuance for all trust income types. Pennymac is aligning with these changes effective with loan deliveries on or after April 30, 2024. View Pennymac Announcement 24-36 for details.
Pennymac posted Announcement 24-37 informing it will update Conventional LLPAs effective for all Best Efforts Commitments taken on or after Monday, April 22, 2024.
Capital Markets
Investor attitudes drive investor demand, and therefore rates. So, what is driving investor attitudes? There is the escalated geopolitical uncertainty between Iran and Israel (central bankers are girding for potential oil shocks that could reignite consumer-price growth), there is rising volatility amidst fear of a potential rate increase due to sticky inflation (voting Fed members have not ruled out the possibility of a future rate hike and have urged patience for any potential easing at least until year-end), there is also cautious optimism surrounding the world economy (earnings season continues on Wall Street this week), and new economic releases are always on the docket, even if most are backward-looking (Q1 GDP, due out later this week, is expected to have risen to 2.9 percent as of the most recent estimate).
More germane to the mortgage industry, we learned last week that existing home sales were down 4.3 percent during the month of March. Meanwhile, housing starts fell 14.7 percent in March although some of the decline was attributed to weather conditions in parts of the country. In terms of the American consumer, retail sales in March rose 0.7 percent which was well above market expectations for a 0.3 percent increase. Additionally, retail sales from February were revised higher from the initial release. The 1.1 percent jump in control group sales led some economists to increase their forecast for personal consumption growth in the first quarter.
Bank economists are growing more optimistic about the outlook for credit conditions compared to the latter half of 2023, according to the American Bankers Association’s latest Credit Conditions Index. Conditions are expected to improve for a second consecutive quarter in Q2, which would mark the highest level in two years, reflecting a moderate increase in optimism. Job growth is expected to continue, inflation is forecasted to ease toward the Fed’s 2 percent target, and three rate cuts are expected by the end of the year.
This week’s highlights include month-end supply consisting of $183 billion in fixed coupons and $44 billion 2-year FRNs auctioned over tomorrow through Thursday, flash PMIs from S&P Global, new home sales, Fed surveys, durable goods, Q1 GDP, PCE, and Michigan Sentiment. No Fed speakers are scheduled with the Fed in blackout ahead of the May 1/2 FOMC meeting. The week gets off to a quiet start with one data point, Chicago Fed National Activity Index for March, due out later this morning. We start Monday with 30-year Agency MBS prices worse roughly .125 from Friday evening and the 10-year yielding 4.65 after closing last week at 4.62 percent.
Employment
radius financial group inc. is looking for an experienced Accounting Manager to lead all accounting operations. radius is a full-service retail mortgage banker that has been making mortgages better through a customer obsessed and team inspired culture since 1999. We are seeking an experienced Accounting Manager to lead all loan accounting, financial reporting, accounts payable and payroll functions. The Accounting Manager will report to the CFO and must have experience in a mortgage accounting system (Loan Vision is a plus), branch reporting and MSR accounting. Remote candidates will be considered and should send confidential inquires to Mike Clark.
Imagine a world where you, as a loan officer, aren’t stuck choosing between a broker model and a retail model. What if there was a company that blended the best of both worlds: the transparency of a broker model with the solid support of a retail banking platform? What if this company not only generated qualified local leads for you but also helped you add value for your existing realtor partners and connect with new ones? What if I told you this company is not just a dream: It’s real and it’s here to revolutionize your workflow. Please schedule a confidential Zoom meeting with Next Wave Mortgage.
TAYGO INC. presents an enticing new opportunity for a SaaS Sales Representative! This pivotal role is instrumental in propelling the success of TAYGO through selling our SaaS solutions to prospective clients. The key focus is comprehending the requirements and challenges of mortgage lenders (as well as mortgage brokers) and adeptly showcasing how our products, WEB-GO and RIN-GO, can optimize their operations and business performance. You must have a strong understanding of CRM products, their features, and the mortgage industry. You must effectively engage with prospects to understand their needs. You must also carefully monitor existing clients’ activities to identify upsell opportunities. You must have exceptional communication skills for online demos and meetings, cold or warm calls and emails. Your expertise, patience, and ability to build and maintain strong customer relationships will be vital in achieving our sales goals and ensuring customer satisfaction. Please send your resume to [email protected].
Alanna McCargo, President of the Government National Mortgage Association (Ginnie Mae) and whom I have had the opportunity to spend some time with, will resign from public office, effective May 3. “McCargo has served in the Biden-Harris Administration since January 2021, first as the Senior Advisor for Housing Finance in the U.S. Department of Housing and Urban Development (HUD) for former Secretary Marcia Fudge and then later nominated by President Biden to lead Ginnie Mae. McCargo’s confirmation, with bipartisan support by the U.S. Senate, made history as she became the first woman and woman of color at the helm of this U.S. Government corporation.”
The announcement came with the usual platitudes from Ms. McCargo about the Administration and Ginnie Mae and its “complex $2.5 trillion guarantee business” as well as others saying some very nice things about her.
Principal Executive Vice President (PEVP) Sam Valverde will serve as the Acting President upon President McCargo’s departure. Senior Advisor for Strategic Operations and Interim Chief Operating Officer Laura Kenney will assume additional responsibilities as part of this transition.
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Source: mortgagenewsdaily.com
Frankly, however, the biggest surprise at the moment might be that sales volumes have held up pretty well over the past few weeks even as mortgage rates have climbed into the mid-7s. We’ve been talking about sales growth over the past year. More home sales are happening, but we can also see — once adjusted for seasonal patterns — that sales should be much higher now if a real market recovery were underway.
It feels like the latest macro trends will keep mortgage rates in the mid-7% range for the near term. And we’d expect that to slow home sales further. That’s why Altos Research tracks every home for sale in the country each week. The data so often defies expectations or changes very quickly. Let’s dig further into the details of the U.S. housing market for the week of April 22.
When we look at the active inventory of unsold homes on the market, we can definitely see the impact of higher mortgage rates in the past month. There are 543,000 single-family homes on the market now. That’s a 3% jump from last week and 31% above year-ago levels.
The available inventory of unsold homes on the market is building quickly due to the most recent mortgage rate jumps. There are 130,000 more homes on the market now than last year at this time.
Normally, inventory is climbing at this point in the second quarter. We’re rapidly approaching the peak of the market in terms of seller listings, and as inventory builds, the sales rate will peak by the end of June. So, it’s normal that inventory is growing now.
But when you add a spike in mortgage rates that makes homebuying less affordable, that leads to fewer buyers and inventory grows. Altos data currently shows an inflection point in April. With the most recent mortgage rate jump, inventory growth has also accelerated.
This is what is meant when we say that higher rates leads to higher inventory. We are on the path back to the formerly normal levels of unsold homes on the market. A couple more years with elevated rates will get us there.
But it’s also noteworthy to point out that falling rates reverse this trend. Lower rates mean that people snap up the existing inventory.
Growing inventory is not just about slowing demand. We are also consistently measuring more sellers coming back into the market. At 69,000 new listings unsold today, that’s 3% more than a week ago and 14% more than this time last year.
In fact, there are more new sellers this week than in any week of 2023. This selling season still has two more months of growth potential. Industry professionals would love to see 70,000 or 80,000 new listings per week in May. More sellers means more sales can happen. There’s a limit, of course, as we could eventually reach an imbalance if too many sellers flood the market and too few buyers follow suit. But we’re not close to that yet.
In the years before the COVID-19 pandemic, the latter half of April would normally see 80,000 to 100,000 new listings in a week. Now we’re at 69,000. Obviously, elevated mortgage rates slows both buyer and seller activity. There are a lot of people who will never sell their house with a 3% mortgage.
There’s unlikely to be a flood of sellers in the next few years, but we can see steady growth. Each year with higher rates will create more inventory growth and have fewer people locked into low rates. That growth is good for the market.
The available inventory of homes to buy and the new ones being listed for sale each week are what consumers care about. If I’m buying a house, do I have any houses to buy? For homebuyers, the selection they have now is the most they’ve had in years.
Real estate professionals, on the other hand, have to care about transaction volume. How many home sales are happening? Because there were so few sellers last year, the number of sales was quite constricted. That’s starting to change. The 14% increase in new listings over the past year is a really good sign that sales can grow.
When we look at the sales rate, we can indeed see that home sales are growing. There were 71,000 new contracts started for single-family homes this week. That’s 3% more than last week and 7% more than a year ago.
There are still 8% fewer sales happening each week than in 2022. At that time two years ago, there were frantic last-minute deals getting done as mortgage rates were rising quickly. So, even though rates were up back then, sales were still strong.
But the hectic pandemic-era pace of sales had slowed, so inventory was building quickly. In 2022, the new sales rates really cratered after the Fourth of July holiday.
There are now 385,000 single-family homes under contract. That’s 5% growth compared to this time last year but is still 14% less than two years ago. New sales started this week saw 7% growth while the total number of homes under contract saw 5% growth.
It takes 30 to 40 days for the typical sale to close. The homes under contract now will mostly close in April and May. The 5% annualized growth rate is less than we’d hoped for at the start of the year, but it’s creeping up even with higher mortgage rates.
Altos Research uses direct measurement rather than seasonally adjusting its numbers. There are 385,000 single-family homes in escrow to complete a sale as of today. If you were to approximate a seasonal adjustment on this number, you would see a yearly sales pace of about 4.4 million units for April 2024. That pace is up from April 2023, but it is still running slower than the typical April. The seasonal pace is where one can observe the slowdown due higher mortgage rates.
The takeaway from the weekly new pending sales data is that even though sales continue to outpace last year, that growth has definitely slowed.
The median price of single-family homes under contract is now $398,000. That jumped by 2.4% jump this week and is, in fact, a new all-time-high, surpassing the sale prices of two years ago.
These spring weeks are indeed the time when home prices climb, so it’s not too surprising that this trend is occurring now. But we’ve also been keeping a close eye on home prices in the face of these rising mortgage rates.
The prices of the homes going under contract are 6% more expensive than one year ago. Last year at this time, home prices were lower than in April 2022. But we’re now back at all-time highs. The previous peak was $395,000 two years ago.
One thing of interest in the price data is how slow this climb has been. Compared to Jan. 1, 2024, prices are up 6.6%. In most years, the increase is closer to 10% by this time in April. So, as a leading indicator for how the year ends up, this price signal is much softer than usual.
We can also see this in asking prices. The median price for all homes currently on the market is $449,000. That’s up a fraction from last week and only 1% above last year at this time.
Asking prices can be thought of as a leading indicator for future sales prices. Homes that are on the market now will get offers in May, close in June and will be reported on in July. So, the future signals for home prices aren’t falling because of higher mortgage rates, but it certainly looks like price appreciation has slowed.
Another strong leading indicator for future home sale prices is the share of homes on the market with price reductions. If more sellers have to cut their prices now, that’s a real signal for sales that will happen in the future.
Surprisingly, given the mortgage rate changes, there is no jump yet in the share of price reductions. We’ve been watching this stat closely.
This week, 32% of the homes on the market have taken a price cut. That’s actually down a fraction from last week, given a relatively strong set of new listings that hit the market and the fact that home sales are at their highest point of the year. Fresh inventory doesn’t take a price cut until after it sits for a while without an offer.
There are 3% more homes with price reductions today than a year ago. Last year at this time, price cuts were still decreasing with very tight volumes of new listings. There are more homes on the market now with price cuts than in any April on record. That shows weakness in prices, but it’s not a super high number and it’s not skyrocketing, so that implies we won’t see prices tanking anytime soon.
The takeaway here is that with the 30-year fixed mortgage at 7.4%, there is still just enough sales volume to keep home prices from dropping like they did in late 2022. The current market is not changing nearly that quickly. We’ll continue to watch data on price cuts. As mortgage rates make homes less affordable, fewer offers will be made and some sellers will cut their prices. That could accelerate in the next few weeks.
Source: housingwire.com