After hovering below 3% for a month, the average 30-year fixed mortgage rate popped back up six basis points to exactly 3% last week, according to Freddie Mac‘s PMMS.
Mortgage rates climbed north of 3% over the first few months of 2021, but crested at 3.2% in March before descending again. Despite such a favorable rate climate, there remains a shortage of homes for sale, pointed out Sam Khater, Freddie Mac’s chief economist.
“The lack of housing supply has been compounded by labor disruptions and expensive building materials that are driving up the cost of new housing, making it difficult for homebuyers to find homes to purchase,” Khater said.
Because mortgage rates held for so long in the sub-3% category, Fannie Mae‘s economic and strategic research group revised its expectations for 2021 and 2022 origination volume, noting that originations could have been higher if the market weren’t struggling with supply.
“We downgraded our expectation for 2021 purchase volumes by $43 billion from last month’s forecast to $1.8 trillion,” the ESR group said, “We expect refinance origination volume to be $2.2 trillion in 2021, a $125 billion upward revision from last month’s forecast, as incoming data continue to come in strong and interest rates have pulled back in recent weeks.”
The mortgage ecosystem is fractured – Here’s how to fix it
To improve the mortgage ecosystem, SitusAMC and ReadyPrice created a platform that connects originators with the secondary market.
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At current mortgage rates, the group estimated around 51% of all outstanding mortgage have at least a 50-basis point incentive to refinance, up from 42% in the previous months forecast. While millions of borrowers may have the opportunity, Joel Kan, the Mortgage Bankers Associations associate vice president of economic and industry forecasting, said the refi wave is still likely under volatility if mortgage rates continue to oscillate around current levels.
When mortgage rates failed to pick up in the last month, savvy homebuyers jumped back on them. But even with rates slipping to previous lows, borrowers are still battling it out in the bidding trenches on overheated home prices. April economic data for home sales showed year over year numbers are still above those in 2020, but beginning to dip sequentially
Real estate transactions topped $13 billion in value in the first half of this year, with a plurality of the sales concentrated within the top income bracket encompassing the luxury market, data provided by Realtors Association of Jamaica shows.
However, the data, which spanned four income groupings, also shows that once combined, the majority of the sales are within the middle- to high-income block.
In that regard, the data comports with information from members of the banking sector, several of which have said that for them, the demand for home loans is manifested mostly in the middle tier of the market.
But while the banks have said business is fairly robust notwithstanding the uptick in mortgage rates, the data from the RAJ Multiple Listing Service indicates that residential real estate transactions are on the decline.
For all of 2022, the Realtors Association reported that there were 1,608 transactions worth nearly $108 billion spanning the four categories of residential real estate. But that is down from 1,858 transactions valued at $211 billion the previous year.
According to real estate brokers and financiers of home purchases, the current functional definition of middle-income residences relates to homes priced within the $15 million to $25 million range, while high-income residences are priced at $25 million to $45 million.
Most of the demand was said by different banks to be coming from young professionals.
The Realtors Association’s listing service captured 287 real estate transactions from January to June of this year, valued at $13.27 billion.
Broken down into four categories, the most lucrative side of the market and the area with the highest demand related to the most expensive homes.
In the under-$15 million category, RAJ reported that there were 76 transactions valued at $731 million at half-year 2023; in the middle income or $15 million to $25 million band, there were 68 deals valued at $5.2 billion; for those in the $25 million to $35 million range, there were 49 transactions valued at nearly $1.44 billion; while at the top end of the spectrum, for residences costing over $35 million, there were 94 transactions valued at $5.89 billion.
CIBC First Caribbean Jamaica, which once operated a building society but merged it into its wider operations years ago, said the bank has seen a 28 per cent increase in the number of applications for mortgages in the first five months of 2023, relative to last year, and consequently, it has been distributing more home loans in line with demand.
“Approval percentages for the corresponding periods during 2022 and 2023 were 73.33 per cent and 82.46 per cent, respectively,” CIBC FirstCaribbean said regarding the performance of the mortgage market.
And that is within a context where financing charges are 0.5 percentage point higher than last year, the bank said. The loan applications it received mostly related to apartments and single-home properties.
The most recent data published by the Bank of Jamaica, BOJ, shows that after a yearlong period of steady then incrementally small movements, mortgage loan rates have spiked to a three-year high, at 7.76 per cent as of May. That is up 56 basis points since January when mortgage loans were priced at an average of 7.2 per cent.
JMMB Bank says most of the demand for its home loans relates to properties falling within a band of $14 million to $35 million.
“This segment largely consists of young professionals who are first time homeowners taking advantage of the increased NHT loan ceiling which stood at $6.5 million since 2019 and is set to increase to $7.5 million, per single applicant in July 2023,” JMMB Bank’s General Manager of Bank Client Partnership Moya Leiba-Barnes, told the Financial Gleaner back in June. The NHT has since announced the increase in the loan ceiling, effective July 1.
Partnership agreements
“In response to the demand in this segment, JMMB Bank has forged several partnership agreements with developers, some of whom have received financing for their construction projects through JMMB Bank, in keeping with its end-to-end financing of real estate projects,” said Leiba-Barnes.
In May, JMMB Bank adjusted all its variable interest rate loans, including residential mortgages, by up to 1.75 per cent for retail clients, in response to the series of interest rate hikes that the central bank had executed for more than a year. The central bank’s policy rate has rested at 7.0 per cent since last November, but it is coming from a historic low of 0.5 per cent nearly two years ago when the BOJ shifted towards monetary tightening as a check on inflation.
Financing for majority mid-income properties is reflective of recent trends. The central bank, in a review of the mortgage market published in the latest BOJ Financial Stability Report, said acquisition of houses and apartments were mainly financed by banking institutions, inclusive of banks and mortgage banks, and spanned properties priced mainly in the range of $15 million to $30 million, during the period April 2019 to March 2021.
There were also outlier purchases of properties in excess of $60 million, which were spread across all institutions, “suggesting low concentration in high-value real estate,” the central bank stated.
Across all price ranges, the greater share of loan funding was for the purchase of houses, inclusive of apartments priced mainly at $15 million to $30 million, and scheme residences priced below $15 million.
“This was consistent with the affordable housing solutions established in the parish of St Catherine and indicative of joint financing arrangements with other institutions namely the National Housing Trust,” the central bank said.
It added that notwithstanding the spike in mortgage activity, the banks appeared to have a fairly good handle on managing the risk. Since mid-2020, the central bank said that asset quality improved sharply relative to the overall loan portfolio of banking institutions while credit quality was high, with the level of ‘performing’ mortgage loans at March 2022 estimated at 93 per cent of mortgage portfolios.
Based on a recent study, the digital textile printer market is gaining momentum as advanced printing technology is increasingly adopted in home décor and furnishing applications
NEWARK, Del, July 13, 2023 (GLOBE NEWSWIRE) — As per Future Market Insights (FMI), the Global Digital Textile Printer Industry is estimated to reach US$ 2,212.9 million in 2023. Over the forecast period 2023 to 2033, global sales of digital textile printers are expected to rise at 9.8% CAGR. This is projected to take the total market valuation to US$ 5,304.3 million by 2033.
Growth in the market is driven by continuously changing fashion trends, a high need for advanced printing technologies, and increasing demand for customized & personalized home décor.
The market for custom textiles in the home décor and furnishing sector is experiencing rapid growth. Nowadays, people prefer fast fashion and exclusive products that can be customized and personalized according to their specific demands.
Customers are willing to pay premium prices and actively seek out platforms and brands that cater to their custom home décor needs. This trend is particularly evident due to the increasing purchasing power of Gen Z, who are more inclined towards online shopping.
There is a strong demand for printed materials used in furniture. Consumers are increasingly looking for personalized and one-of-a-kind home furnishings, including curtains, upholstery fabrics, bedding, and cushions. This, in turn, is encouraging the adoption of digital textile printers.
Download the Sample Report to Explore Other Factors Driving the Global Digital Textile Printer Market: https://www.futuremarketinsights.com/reports/sample/rep-gb-17495
Digital textile printers have emerged as ideal printing solutions, allowing for customization by enabling the printing of specific designs, patterns, colors, and even photographs on a wide range of home textile products. This personalization capability is significantly fueling the demand for digital printing within the home interior market.
Consumers shift to online shopping is another key factor driving the global digital textile printer industry.
Today’s consumers have elevated expectations, seeking pleasant and personalized shopping experiences and affordable and high-quality clothing aligned with seasonal trends. Online shopping platforms fulfill these demands through attractive offerings, such as seasonal sales and diverse apparel selections.
The rising demand for fast fashion amplifies the importance of digital textile printers in the fashion sector, and the ongoing shift in customer preferences and choices toward online shopping is poised to accelerate market growth further.
Key Takeaways from the Digital Textile Printer Market Research Report:
The global digital textile printer industry is expected to reach a valuation of US$ 5,304.3 million by 2033.
Based on ink, the pigment segment is forecast to expand at a CAGR of 11.1% through 2033.
By printing process, the Direct-To-Garment segment is expected to hold a market share of around 50.2% in 2023.
By end use, the clothing & apparel segment is projected to reach a valuation of US$ 3,474.0 million by 2033.
The United States digital textile market value is anticipated to reach US$ 568.0 million by 2033.
Digital textile printer demand in India is predicted to rise at 8.8% CAGR during the assessment period.
“Growing concerns over sustainability in the printing sector have increased demand for digital textile printers. Digital textile printers offer design flexibility and faster production rates. As a result, they are being widely used globally. Key companies are looking to develop advanced printing equipment to expand their customer base.” – says a lead analyst at FMI
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Digital textile printing offers several advantages over traditional dyeing, starting with its ability to reduce waste and address the water pollution caused by dyeing, which is known as the second leading global water polluter.
Further, the agility & flexibility of digital production and textile printing allow manufacturers to efficiently handle both small boutique orders and large retail orders using the same equipment, making it an attractive option.
With a lower cost per print and the convenience of print-on-demand, fast production is possible, enabling profitability from orders of any quantity with just a single button push.
Digital textile printing provides designers with nearly limitless graphic and color capabilities, surpassing traditional printing technologies. This freedom allows designers to unleash their creativity and produce unique designs.
The benefits extend to the supply chain as well. Meeting production and shipping deadlines become easier with digital printing, thereby preventing overstocking. Designers can constantly produce new collections to keep up with ever-changing fashion trends, while customers can satisfy their desire for customized apparel, décor, and gift items.
Key Companies and Their Winning Development Strategies:
Following are the prominent Digital Textile Printer Manufacturers profiled in the report. The Tier 1 players in the market hold a 15% to 25% share in the digital textile printer industry.
Seiko Epson Corporation
Kornit Digital Ltd.
Durst Group Ag
Aeoon Technologies GmbH
J. Zimmer Maschinenbau GmbH
SPGPrints BV
Ricoh Company, Ltd
ATP COLOR S.R.L
Electronics For Imaging, Inc.
DCC Group
MIMAKI ENGINEERING CO., LTD.
Konica Minolta, Inc.
Mutoh Holdings Co. Ltd.
Dover Corporation
HP Inc.
Brother International Corporation
, and others are few
Leading companies focus on developing new digital textile printing machines with enhanced features. Further, they are implementing various strategies, including mergers, partnerships, acquisitions, etc., to gain profits.
Recent Development:
In Dec 2022, Metro NXT, a high-quality and high-speed digital textile printer, was launched by ColorJet Group at India ITME 2022.
Engage with Our Analyst for Expert Insights: https://www.futuremarketinsights.com/ask-the-analyst/rep-gb-17495
Global Digital Textile Printer Market by Category
By Printing Process:
Direct to Garment (DTG)
Dye-sublimation
Direct to Fabric (DTF)
By Ink:
Sublimation
Reactive
Acid
Disperse
Pigment
By Machine Type:
Single Pass Printer
Grand Format Printer
By Substrate:
Cotton
Silk
Rayon
Linen
Polyester
Polyamide
Wool
By Sales Channel:
By End Use:
By Region:
North America
Latin America
East Asia
South Asia & Pacific
Western Europe
Eastern Europe
Central Asia
Russia & Belarus
Balkan Countries
Baltic Countries
Middle East & Africa
About the Packaging Division at Future Market Insights
The packaging division at Future Market Insights provides an in-depth historical analysis and projections for the next ten years and covers the competitive landscape through a unique dashboard view. From packaging materials and machinery to packaging designs & formats, Future Market Insights has an exhaustive database for these industry verticals, serving clients with unique research offerings and strategic recommendations. With a repository of 1,000+ reports, the team has analysed the packaging industry comprehensively in 50+ countries. The team evaluates every node of the value chain and provides end-to-end research and consulting services; reach out to explore how we can help.
Explore Research Related Reports of Packaging:
Digital Printed Cartons Market Overview: As per the latest report by FMI, the digital printed cartons market is likely to witness growth at a CAGR of 6.5%-7% annually over the upcoming decade.
Digital Label Printing Market Growth: Global digital label printing demand is anticipated to be valued at US$ 10,538.3 Million in 2022, forecast to grow at a CAGR of 5.3% to be valued at US$ 17,662.6 Million from 2022 to 2032.
Digital Printing Packaging Market Demand: Global digital printing packaging demand is anticipated to be valued at US$ 17,760.7 Million in 2022, forecast to grow at a CAGR of 5.1% to be valued at US$ 29,206.9 Million from 2022 to 2032.
Digital Printing Paper Market Forecast: The growth in demand for digital printing paper is anticipated to remain steady for various reasons. The digital printing paper is used in various industries such as display packaging, food & beverages packaging.
Oceania Digital Textile Printer Market Segmentation: Recent market research reveals that the Oceania digital textile printer market is set to hit a valuation of US$ 98.4 million in 2023. It is expected to further expand at a CAGR of 4.3% over the forecast period 2023 to 2033.
About Us :
Future Market Insights, Inc. (ESOMAR certified, Stevie Award – recipient market research organization and a member of Greater New York Chamber of Commerce) provides in-depth insights into governing factors elevating the demand in the market. It discloses opportunities that will favor the market growth in various segments on the basis of Source, Application, Sales Channel and End Use over the next 10-years.
Contact Us:
Future Market Insights Inc. Christiana Corporate, 200 Continental Drive, Suite 401, Newark, Delaware – 19713, USA T: +1-845-579-5705 LinkedIn| Twitter| Blogs | YouTube For Sales Enquiries:[email protected]
[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: RESO.]
The Real Estate Standards Organization (RESO) is a non-profit trade organization that champions open standards in the real estate industry, specifically with respect to data. Originally created in 1999 as a NAR work group responsible for the first version of RETS (Real Estate Transaction Standard), RESO was incorporated as an independent, non-profit in 2011 that has a wide range of initiatives:
Web API: A modern RETS alternative for MLS data transfers.
Data Dictionary: The Rosetta Stone for real estate data that allows systems to interact efficiently.
Universal Property Identifier (UPI): represents property data globally to reduce inconsistencies.
Unique Organization Identifier (UOI): A list of individual organizations used to accurately identify the original source data recipients can accurately identify the organizational source (publisher) of each piece of data in an aggregated database Pinpoints the organizational source for specific pieces of data to improve transparency and accuracy.
Unique Licensee Identifier (ULI): Helps properly identify practitioners to give customers more transparency.
Workgroups: used to create RESO’s standards.
Serving MLS’, brokerage and tech providers, RESO counts the National Association of Realtors, Zillow, eXp, Realtor.com, FBS, MoxiWorks, and W&R Studios among its members.
Represented in the GEM by: Sam DeBord & Joshua Darnell.
What we like: No one but RESO is incentivized to bring the entire industry together to standardize the messy decades-old process of making disparate real estate datasets speak to each other using a common language.
The lack of existing homes for sale on the market is driving a resurgence of home-price growth and supporting increases in new home construction, according to Fannie Mae’s Economic & Strategic Research (ESR) group.
“The extent of the ongoing lack of inventory has exceeded our prior expectation,” the ESR group said in its July commentary. “This ongoing lack of inventory, in part due to mortgage lock-in effects, has driven significantly stronger home price appreciation over the first half of 2023 than we had previously anticipated.”
Fannie Mae forecasts home-price growth for 2023 and 2024 will be positive 3.9% and negative 0.7% on a Q4/Q4 basis respectively, up from negative 1.2% and negative 2.2% in its previous quarterly update.
With an ongoing tight supply of existing homes for sale on the market, the ESR group expects overall home sales in 2023 to remain near the lowest annual level since 2009.
“We began discussing our expectations of a supply shortage in late 2014, and it remains front and center in the housing market in 2023,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement.
“The supply of existing homes is near the 2009 crisis low, and it’s showing no signs of easing. This puts the onus on homebuilders and can be seen in the construction data,” Duncan added.
While the U.S. single-family homebuilding fell 7% in June, permits for future construction rose to a 12-month high as a severe inventory shortage supports new construction. Housing starts surged 18.5% in May to a pace of 997,000 units, the highest level in a year.
Homebuilders continue to use mortgage rate buydowns to help drive sales, and with many construction input prices — including that of lumber, which is lower than a year ago — builders continue to have ample margin to offer incentives, Fannie Mae pointed out.
The ESR group in return upgraded its single-family housing starts forecast to 896,000 units for 2023 and to 890,000 units for 2024, up from 824,000 and 845,000, respectively.
The combination of an upward revision to the home price outlook and greater expected home construction has also led to a slight upgrade in Fannie Mae’s forecast of 2023 mortgage originations.
Fannie Mae anticipates total single-family originations to be $1.62 trillion in 2023, up from last month’s prediction of $1.59 trillion, while maintaining its forecast for 2024 single-family originations at $1.9 trillion.
Stronger pace of economic growth
“Substantial revisions to first quarter data alongside ongoing resilience in the labor market and new home construction now point to the first half of 2023 having experienced a stronger pace of economic growth than we had previously expected,” the ESR group pointed out.
Inflation continued to decelerate on an annual basis with the Consumer Price Index (CPI) dropping to 3% in June, down from 4% in May.
Labor market indicators are painting a mixed picture to conclude that sufficient softening has occurred. Nonfarm payroll employment increased by 209,000 in June, while the April and May reports were revised downward by a combined 110,000 jobs.
Fannie Mae noted that the underlying tightness in the labor market is not consistent with inflation settling at a 2% target.
“Therefore, despite improvement in recent inflation measures, we expect Fed policy to remain tight until it is clear that the labor market has softened sufficiently,” according to the report.
While Fannie Mae’s macroeconomic forecast is little changed from last month — including a call for a modest recession beginning in the fourth quarter of this year or the first quarter of next year — it has upgraded its real gross domestic product (GDP) growth outlook to 1.1% from 0.1% on a Q4/Q4 basis.
Two years ago when I bought my People 150cc scooter, I was teased ceaselessly by my car-loving friends. It wasn’t so long ago that gas was under two dollars a gallon, and the need for more efficient wheeled transportation wasn’t as “in your face” as it is now. Today, when my friends talk about my scooter (or my wife’s) it’s to ask where I got it, for how much, and how much we save by having them.
J.D. recently mentioned he was thinking of forsaking his dream of a Mini Cooper for a scooter instead, but he had some questions. How much money would he save? Could we quantify with some certainty the impact of a scooter on one’s budget? Here’s my attempt based on my experience.
Safety First
First, I’d like to talk about a few misconceptions. Scooters are not necessarily slow-moving vehicles. Your speed depends on your engine size. I’d think of them more generally as small motorcycles. You’re exposed to the elements (more so than a car), and you’re giving up the “safety” of a steel box, but you are getting a more maneuverable vehicle.
I’d strongly encourage anyone riding a scooter to take a motorcycle safety course, such as the one given by the Motorcycle Safety Foundation. Safety, either in a car or a scooter, depends greatly on the operator. In my opinion, driving a scooter is no different (in terms of safety) than driving a motorcycle.
In my four years operating a scooter, I have not been involved in any accident. I’ve been able to avoid unsafe motorists better than I would be able to in a car. I don’t feel any more unsafe operating my scooter, but I’ve had many years of experience, and that confidence can create a noticeably different ride. I would expect first-time riders to be much more nervous.
Pinching Pennies
But the big question here is: How much can one save if you go from a car-centric lifestyle to a scooter-centric lifestyle?
First, purchasing a scooter will cost significantly less, even for models that can keep up with highway traffic. The average new four-door sedan costs about $20,000. A scooter that can achieve a constant speed of 70mph and legally be driven on interstate highways will cost around $3,000. Costs for used vehicles of both classes can vary by large degrees, but the scooter will always be an order of magnitude cheaper. Thus, a scooter can more easily be financed directly out of pocket, avoiding an expensive car loan.
Operating a scooter — gas, insurance, maintenance — is also much cheaper than operating a car. Astonishingly enough, the difference in just one year represents a brand new Buddy 125 (a scooter I highly recommend).
Not Quite Car-Less
However, transferring to a scooter is just one lifestyle choice. We can choose to locate ourselves so that we can walk to work and shop using a rolling cooler. We can locate near bike-friendly areas and strap storage racks to our bikes. We have many choices. None of these choices allows for long-haul, heavy or large lifting, however.
My wife and I have a car, along with our scooters. While seldom used except for long trips and large item hauling needs, we do need a car for those purposes. But we are better off using our scooters, bicycles, and legs for daily commutes and grocery store visits.
J.D.’s note: After our discussion of high gas prices and alternative transportation, not only did Stephen volunteer to share his experiences above, but Bev Brinson sent me a copy of her book, The Complete Idiot’s Guide to Motor Scooters. It’s a great introduction to the subject. If, like me, you’re interested in scooters, but don’t know where to start, borrow a copy from your library.
Builder sentiment in the market for single-family homes rose 1 point in July to 56, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
It marks the seventh straight month of gains and the highest level since June 2022. A reading above 50 is considered positive sentiment.
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Builders say low supply in the resale market is driving demand for new construction, but higher mortgage rates and supply-side challenges continue to put pressure on the market.
“Although builders continue to remain cautiously optimistic about market conditions, the quarter-point rise in mortgage rates over the past month is a stark reminder of the stop and start process the market will experience as the Federal Reserve nears the end of the ongoing tightening cycle,” said Robert Dietz, NAHB’s chief economist.
The average rate on the popular 30-year fixed mortgage crossed over 7% briefly in May and then again at the end of June. It has only come down slightly in the last week. Those higher rates are straining affordability in the market, where prices for existing homes are rising yet again.
Of the NAHB index’s three components, current sales conditions in July rose 1 point to 62; buyer traffic increased 3 points to 40, the highest reading since June of last year; and sales expectations in the next six months fell 2 points to 60. The drop in expectations is due to that jump in interest rates and the resulting hit to affordability.
Despite higher mortgage rates, however, builders are using fewer incentives. Just 22% of builders reported cutting prices in July. This is down from 25% in June and 27% in May.
Sales of newly built homes in May, the latest reading available, jumped 13% compared with April and were 20% higher than May 2022, according to the U.S. Census Bureau. The median price was down over 7% from May of last year, but that median may be skewed by the mix of homes selling, which is currently leaning toward the lower end.
Before the 2008 housing crisis, home sellers would offer DPA to FHA borrowers and raise the sales price to cover the cost, creating exaggerated losses for the FHA program.
The housing environment is different today – where a lender has far less control over a home’s sales price and no control over the appraiser, according to a paper published by Ted Tozer, a non-resident fellow at Urban Institute and the former president and CEO of Ginnie Mae.
“By lifting this restriction to allow lenders to provide DPA, either through self-funding or through a grant program, policymakers could help remove the down payment obstacle for many families,” Tozer said.
Lenders could provide DPA through two channels — the first channel through self-funding offered on an unlimited basis.
The lender could charge the borrower a 1% higher interest rate to fund a 3.5% down payment, which would allow the lender to issue a Ginnie Mae–guaranteed mortgage-backed security (MBS) that would generate enough of a premium to fund the required down payment, Tozer explained.
These loans would still have access to all the features of the FHA streamline refinance program, allowing borrowers to reduce their payments if they stay on their new mortgage.
“Given the robustness of using premium-price Ginnie Mae MBS to fund the program, there wouldn’t be a need to limit its availability,” Tozer said.
The second channel would be through a grant provided by the lender’s corporate funds.
Since lender grants have limited funding, the programs could be restricted to specific income levels and priority markets, the paper noted.
Through this channel, borrowers would still have to pay mortgage insurance costs – which would come down to the difference between the private mortgage insurance that the GSE loans require and the 0.55% annual mortgage insurance premium required by the FHA.
“The FHA could work with Congress to amend the FHA Modernization Act so only entities that can affect the home’s sales price are banned from providing DPA,” Tozer said.
As an alternative solution, Tozer floated the idea of making the FHA program a zero-down-payment program – a proposal first made by the George W. Bush administration in 2004.
“If this change were made, the FHA program would join the other government-insured programs offered by the U.S. Department of Veteran Affairs and the U.S. Department of Agriculture that do not require a down payment,” Tozer noted.
The paper’s suggestion to amend the FHA Modernization Act comes amid affordability pressures on first-time homebuyers.
The lack of homes for sale is driving up home prices and the 30-year fixed rates have been hovering near 7% in the past two months.
“Housing affordability remains dangerously close to the 37-year lows reached late last year, despite the Federal Reserve’s attempts to cool the market,” said Andy Walden, Black Knight’s vice president of enterprise research.
Fickle mortgage rates rose once again last week, this time four basis points to an average of 2.99%, according to Thursday data from Freddie Mac‘s PMMS. However, despite fluctuating sub-3% mortgage rates, borrowers are still competing in a supply strained and overheated market.
“Home prices continue to accelerate while inventory remains low and new home construction cannot happen fast enough,” said Sam Khater, Freddie Mac’s chief economist. “There are many potential homebuyers who would like to take advantage of low mortgage rates, but competition is strong. For homeowners however, continued low rates make refinancing an option worth considering.”
The overall housing index hit its lowest point since February, said Joel Kan, the Mortgage Bankers Association’s associate vice president of economic and industry forecasting. Even though rates have been below 3.2% over the past month, they are still around 20 to 30 basis points higher than the record lows in late 2020, he said.
“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity,” said Kan.
While the COVID-19 crisis has kept mortgage rates lower and suppressed inventory, these two factors have also facilitated higher levels of price growth as COVID-19 happened amid a housing market sweet spot.
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“We have an increase in the number of buyers and a total collapse of inventory driving home-price growth,” said Logan Mohtashami, lead analyst at HousingWire. “In the last expansion, the only thing that kept home-price growth from taking off was the higher mortgage rates of 4% to 5%. We are currently enjoying the lowest mortgage rates ever, so we don’t have that to dampen the market.”
According to Mohtashami, the new home sales marketplace is unhealthy, but when mortgage rates rise, this sector will get hit harder than the existing home market, like it always does. This won’t result in an epic housing crash, but it will impact future construction.
April’s existing home sales painted a familiar picture of a market still grappling with low supply as sales dropped for the third month in a row, down 2.7% from March to 5.85 million. Last week’s data on pending home sales proved that like new and existing sales, pending home sales also felt the strain of exhausted home inventory in April ― dropping 4.4% from the previous month to an index of 106.2, according to the National Association of Realtors.
A few notable mortgage rates slumped over the last seven days. The average interest rates for both 15-year fixed and 30-year fixed mortgages slid down. We also saw a cut in the average rate of 5/1 adjustable-rate mortgages.
As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate — a short term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank’s goal is to reduce prices by curtailing consumer spending.
After hiking interest rates 10 times since March 2022, the Fed pumped the brakes at its June meeting. The central bank’s federal funds rate will remain at a range of 5.00% to 5.25% for the time being, although the Fed hasn’t ruled out the possibility of further increases if inflation doesn’t continue to moderate. The Fed will decide whether or not to raise rates at its next meeting on July 26.
Current Mortgage Rates for July 2023
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The most recent Consumer Price Index, a popular gauge of price growth, shows that the Fed’s string of rate hikes is having its intended effect. Annual inflation is now at 3.0% for the 12-month period ended in June, which is the lowest it’s been in more than two years.
The Fed doesn’t set mortgage rates directly, but it does play an influential role. Mortgage rates move around on a daily basis in response to a range of economic factors, including inflation, employment and the broader outlook for the economy. A lower inflation rate is good news for mortgage rates, but the potential for additional hikes from the central bank this year will keep upward pressure on already high rates.
“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree.
Rather than worrying about mortgage rates, though, homebuyers should focus on what they can control: getting the best rate they can for their financial situation.
To increase your odds at qualifying for the lowest rate available,take the steps necessary to improve your credit score and to save for a down payment. Also, be sure to compare the rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you make an apples-to-apples comparison among lenders.
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 7.23%, which is a decrease of 14 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed mortgage will usually have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 6.48%, which is a decrease of 11 basis points compared to a week ago. You’ll definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, if you’re able to afford the monthly payments, there are several benefits to a 15-year loan. You’ll most likely get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 6.19%, a fall of 5 basis points compared to a week ago. With an adjustable-rate mortgage mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. However, you could end up paying more after that time, depending on the terms of your loan and how the rate adjusts with the market rate. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. Otherwise, changes in the market mean your interest rate could be much higher once the rate adjusts.
Mortgage rate trends
Mortgage rates were historically low throughout most of 2020 and 2021 but increased steadily throughout 2022. Now, mortgage rates are well above where they were a year ago. Fewer buyers are willing to jump into the housing market, driving demand down and causing home prices in some regions to ease. But that’s only part of the home affordability equation.
“Interest rates have been much higher in the past and people bought homes and financed homes at those rates,” said Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University. “But it’s been hard for people to react to such a rapid increase in just a short amount of time.”
Even though the Fed hit pause on rate hikes in June, mortgage interest rates will continue to fluctuate on a daily basis. That’s because mortgage rates aren’t tied to the federal funds rate in the same way other products are, such as home equity loans and home equity lines of credit, or HELOCs.
As long as inflation continues to trend downward, though, mortgage rates should decline slightly towards the end of 2023. The most recent housing forecast from Fannie Mae calls for the average 30-year fixed mortgage rate to close out the year at around 6.3%.
“Mortgage rates have been volatile for some time now and while they could eventually start trending down over the next six months to a year as inflation growth continues to cool, their path is probably going to be bumpy,” Channel said.
We use data collected by Bankrate to track rate changes over time. This table summarizes the average rates offered by lenders nationwide:
Current average mortgage interest rates
Loan type
Interest rate
A week ago
Change
30-year fixed rate
7.23%
7.37%
-0.14
15-year fixed rate
6.48%
6.59%
-0.11
30-year jumbo mortgage rate
7.26%
7.39%
-0.13
30-year mortgage refinance rate
7.33%
7.44%
-0.11
Rates as of July 18, 2023.
How to find the best mortgage rates
To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When shopping around for home mortgage rates, consider your goals and current financial situation.
Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a higher credit score, a larger down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.
Apart from the interest rate, other factors including closing costs, fees, discount points and taxes might also affect the cost of your house. Be sure to comparison shop with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage loan that’s the best fit for you.
What’s the best loan term?
When picking a mortgage, you should consider the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are fixed for the duration of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (typically five, seven or 10 years), then the rate adjusts annually based on the market rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your house. Fixed-rate mortgages might be a better fit if you plan on staying in a home for quite some time. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. If you aren’t planning to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage might give you a better deal. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. It’s important to do your research and think about your own priorities when choosing a mortgage.