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Mortgage rates dropped to 6.74%, on average for 30-year mortgages. (iStock)
Mortgage rates dropped to 6.74%, on average for 30-year mortgages. (iStock)
Mortgage interest rates on the 15-year and 30-year mortgages are down from last week, Freddie Mac reported.
“The 30-year fixed-rate mortgage decreased again this week, with declines totaling almost a quarter of a percent in two weeks’ time,” Freddie Mac Chief Economist Sam Khater said.
For 30-year, fixed-rate mortgages, the average interest rate was 6.74% this week, a decent drop from last week when rates averaged 6.88%. Rates aren’t down quite as much as last year when they were 6.6%, on average.
Additionally, 15-year mortgages averaged 6.16%, down slightly from last week when they averaged 6.22%. These mortgages also aren’t as low as last year when they averaged 5.9%.
“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” Khater said. “In this environment, there is a good possibility that rates will stay higher for a longer period of time.”
If you want to take advantage of lowering interest rates, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.
HOMEBUYERS FEEL GOOD ABOUT WHERE MORTGAGE RATES ARE HEADED: FANNIE MAE
Warmer weather tends to bring a booming housing market as more homebuyers start looking for homes and inventory grows.
Sellers who list their homes in the spring and summer months often make more money when their home sells because the market is more competitive. A Zillow study found that June was the most profitable month for sellers. Homes listed in the first half of June sold for 2.3% more, on average, putting about $7,700 more in the pocket of sellers.
Location matters when it comes to selling power. In San Francisco, the best time to list is the second half of February, but the first half of July is the best time to sell in New York and Philadelphia.
Certain locations also boast even higher profits during warmer months. During the hottest time of the year, homes in San Jose sold for 5.5% more, boosting profits by $88,000 on an average home, according to Zillow. However, homes in San Antonio sold for just 1.9% more during the same time frame.
“Most sellers don’t have the luxury of timing the market,” Zillow Chief Economist Skylar Olsen said. “The best time to list is when it makes the most sense for their lives.”
“Regardless of the month, sellers who list their home for sale this spring can expect plenty of interest if their home is marketed and priced right.,” she contined. “That’s why it’s more important than ever to hire a real estate agent with the experience to localize your strategy when comparable sales might be further afield.”
If you’re looking to compete with other buyers this spring, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.
HOMEBUYERS GAINED THOUSANDS OF DOLLARS AS MORTGAGE INTEREST RATES FALL: REDFIN
Buyers are facing a tougher market than they did a few years ago. To comfortably afford a home, buyers need to make more than $106,000 annually, another Zillow study showed. This income requirement is 80% higher than in 2020.
Monthly mortgage payments are higher than ever and have doubled since 2020. Payments average $2,188, assuming the buyer puts 10% down. With such high prices, affordability has become a major issue. In 2020, households earning $59,000 annually could afford the median-priced home without spending more than 30% of their income.
The $106,000 income needed today is well above the average household income in the U.S. The average household earns about $81,000.
Some areas are more affordable than others and require a much lower income to afford the average-priced home. Pittsburgh buyers need to earn just $58,232 to afford the average home. Memphis residents need $69,976 and Cleveland residents need $70,810.
Costlier cities like San Jose and San Francisco require much more in annual income to afford a home. San Jose requires an average annual income of $454,296 while San Francisco requires $339,864, according to Zillow.
To see if you qualify for a mortgage based on your current credit score and salary, consider using Credible, where you can compare multiple mortgage lenders at once.
15% OF AMERICANS HAVE CO-PURCHASED A HOME WITH A NON-ROMANTIC PARTNER, EVEN MORE WOULD CONSIDER IT
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Source: foxbusiness.com
Mortgage rates dropped significantly in the last few weeks, but the cost of borrowing remains high prompting many homebuyers to wait for even lower rates.
The 30-year, fixed mortgage rate averaged 7.29% for the week ending Nov. 22, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down significantly from last week’s 7.44% and up from 6.58% the same week a year ago.
HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 7.283% on Wednesday.
“In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low.”
New construction starts and permits showed surprising strength in October while existing-home sales slumped to their worst reading since 2010.
Except for the last seven weeks, current mortgage rates hit their highest levels since 2000. As a result, rates have to fall further to spur more demand from homebuyers who are grappling with affordability pressures.
“If rates can hold onto this improvement, or notch a further decline, however, this could mean that ‘buying a home’ does seem like a viable new year’s resolution to a greater number of households,” Realtor.com Chief Economist Danielle Hale said in an emailed statement.
Source: housingwire.com
Mortgage rates kept climbing for the fifth consecutive week, bringing average year-over-year rates 60 basis points higher.
Freddie Mac‘s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year, fixed-rate mortgage averaged 7.57% as of Oct. 12. That’s up 8 basis points from 7.49% the previous week.
By contrast, the 30-year, fixed-rate mortgage was at 6.92% a year ago at this time.
“For the fifth consecutive week, mortgage rates rose as ongoing market and geopolitical uncertainty continues to increase,” Sam Khater, Freddie Mac’s chief economist said in a press release. “The good news is that the economy and incomes continue to grow at a solid pace, but the housing market remains fraught with significant affordability constraints. As a result, purchase demand remains at a three-decade low.”
On Thursday, the Consumer Price Index report showed steady inflation in September, with increases in shelter costs.
Other indices showed significantly higher home loan rates this week.
HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate for conventional loans at 7.52% on Wednesday, compared to 7.60% the previous week. At Mortgage News Daily on Wednesday, the 30-year fixed rate for conventional loans was 7.60%, up from 7.70% the previous week.
Last week’s stubbornly strong jobs report surprised investors, resulting in a surge in the 10-year Treasury yield and home loan rates, Hannah Jones, senior economic research analyst at Realtor.com, said in a news release.
On Thursday, the benchmark 10-year Treasury yield was at 4.6%, down from 4.8% earlier in October. Amid geopolitical uncertainty, investors took refuge in bonds, Jones noted.
Additionally, higher mortgage rates are also a result of the Federal Reserve‘s reduced holdings of mortgage-backed securities, Bright MLS Chief Economist Lisa Sturtevant said in a news statement. The Fed’s selloff of MBSs has increased the supply of mortgage bonds in the market, driving those bond yields higher.
Source: housingwire.com
Mortgage rates will spend the rest of the year moving mostly sideways, as inflation cools but remains above the Fed’s goal, the latest Freddie Mac economic outlook states.
“Under our baseline scenario, the unemployment rate gradually moves modestly higher, enough to slow the economy but not trigger a full-blown recession,” a blog posting authored by its Economic & Housing Research Group led by Sam Khater, chief economist, said. “In that scenario, we expect inflation to cool but remain above the Federal Reserve’s target of 2% and mortgage rates to move mostly sideways, most likely remaining above 6% through year-end.”
Starting last month, Freddie Mac moved to a qualitative forecast from the quarterly quantitative it had been providing in the past. This report was dated June 16, after the Federal Open Market Committee declined to raise short-term rates at its meeting earlier in the week.
In their prior forecasts, including for May, both Fannie Mae and the Mortgage Bankers Association have predicted the U.S. will enter into a recession in the second half of this year. Neither has publicized their June outlook yet.
With mortgage rates staying in that 6% range that put most people out of the money to refinance unless for need, that part of the market should remain muted for the rest of 2023.
This week’s Primary Mortgage Market Survey, based on applications submitted to Freddie Mac’s Loan Product Advisor automated underwriting system, put the 30-year fixed rate mortgage at 6.69%. The last time rates were under 6% was the week of Sept. 8, 2022.
“On the home purchase side, we expect mortgage originations to stay flat this year,” Freddie Mac said. “Purchase originations will start to strengthen later this year as home sales stabilize, and they will resume modest growth in 2024.”
Home sales should remain negatively affected by high mortgage rates and the slowing economy. But a bright spot so far this year is the entry-level segment.
“Despite the substantial affordability challenges, first-time home buyers continue to come to the market and have contributed to an increase in homeownership rates,” Freddie Mac said.
To support its argument, the government-sponsored enterprise pointed to the below-median family income homeownership rate, which at the end of the first quarter was 53.4%, up from 48% in 2016 according to the Census Bureau’s Housing Vacancy Survey.
Over the same time frame, the above-median income rate increased just 0.8 percentage points.
“As of the first quarter of 2023, 87% of the 3.1 percentage point increase in the overall homeownership rate since 2016 can be attributed to the growth in the below-median family income homeownership rate,” Freddie Mac said.
Source: nationalmortgagenews.com
Freddie Mac â Mortgage Rates Continue to Edge Down, Providing Window of Opportunity for Home Buyers Realtor.com News
The average mortgage rate for a 30-year fixed loan is now just 3 basis points away from 3%, after a 16 basis point jump according to Freddie Mac.
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