The average 30-year fixed rate mortgage increased to 3.45% during the week ending Jan. 13, up from 3.22% the week prior, according to the latest Freddie Mac PMMS Mortgage Survey. A year ago, the 30-year fixed rate mortgage averaged 2.79%.
The 15-year fixed rate mortgage averaged 2.62% last week, up from 2.43% the week prior. A year ago at this time, it averaged 2.23%. Mortgage rates tend to move in concert with the 10-year Treasury yield, which reached 1.74% on Wednesday, up from 1.71% a week before.
This is the third week of mortgage rate increases, after the 30-year fixed rate fell to 3.05% on Dec. 23 amid fears of the Omicron variant. The report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
Rates rose across all mortgage loan types, according to Sam Khater, Freddie Mac’s chief economist. Driving the increase is the expectation of a faster than expected tightening of monetary policy in response to a continued inflation caused by disruptions in labor and supply chains.
“The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future,” Khater said.
The Mortgage Bankers Association (MBA) showed on Tuesday that mortgage applications climbed 1.4% for the week ending Jan. 7. The growth was buoyed by a 2% increase in the trade group’s seasonally adjusted purchase index. On the refinance front, the index dipped by 0.1% from the previous week, coming in 50% lower than the same week one year ago.
Economists expect rates to increase in 2022 but will still be close to record-low levels. The MBA forecasts that 30-year mortgage rates will reach 4% by the end of 2022.
The average 30-year-fixed rate mortgage climbed to 3.92% for the week ending Feb. 17, up 23 basis points from the previous week. It’s the highest level since May 2019, according to the latest Freddie Mac PMMS Mortgage Survey.
A year ago, the 30-year fixed-rate mortgage averaged 2.81%. The PMMS report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
“Mortgage rates jumped again due to high inflation and stronger than expected consumer spending,” Sam Khater, Freddie Mac’s chief economist, said in a statement. According to him, “as rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets.”
Mortgage rates typically move in concert with the 10-year Treasury yield, which reached 2.03% yesterday, compared to 1.94% on the previous Wednesday. The 15-year-fixed-rate mortgage averaged 3.15% last week, up from 2.93% the week prior. A year ago at this time, it averaged 2.21%.
Economists had predicted rates would increase in 2022 as the overall economy stabilized – but would still be close to record-low levels. However, rates rose faster than expected. The Mortgage Bankers Association (MBA) forecasts that 30-year mortgage rates would reach 4% by the end of 2022.
Some mortgage rate indices topped 4% late last week.
Sponsored Video
Joel Kan, MBA’s associate vice president of economic and industry forecasting, told HousingWire that If conditions stay in the current state, we’ll certainly see higher rates.
However, rates could quickly head in the other direction, “if something abroad rocks the boat,” such as an armed conflict between Russia and Ukraine, an emergent Covid variant, or a sudden change in certain commodity prices.
So far, rising rates are impacting borrowers’ appetite.
Mortgage applications decreased 5.4% from the previous week, when rates eclipsed the 4% mark for the first time since 2019, according to the MBA survey for the week ending Feb. 11.
The seasonally adjusted refi index fell 8.9% from the previous week, bringing its share of total applications to the lowest level in 19 months. The survey showed that the refi share of mortgage activity decreased to 52.8% of total applications last week, from 56.2% the previous week.
Meanwhile, the purchase index dropped a mere 1.2% from the previous week. A heavier mix of conventional applications again contributed to another record average loan size at $453,000.
The Supreme Court has blocked President Joe Biden’s student loan debt relief plan, saying his administration lacked authorization under the HEROES Act to forgive up to $20,000 in student debt per borrower.
Some 43 million borrowers won’t see a cent of the debt cancellation promised by the White House last year. Under current guidance from the Education Department, borrowers must get ready to resume student loan payments starting in October on their full student loan balance.
On Friday afternoon, Biden announced that his administration was pursuing a student debt cancellation plan B. This route leans on a different legal avenue than the one struck down by the Supreme Court, and the process could take a year or longer. But a plan B remains far from guaranteed, and there is no timeline yet. Take steps to prepare for repayment now.
“Now that we have the decision, we can move forward,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. “There are a lot of borrowers who have been in limbo waiting to see what was going to happen.”
What did the Supreme Court decide?
The court ruled in two cases, and struck down the cancellation through the second case. All nine justices unanimously dismissed the first case, Department of Education v. Brown, because they found the plaintiffs had no standing to sue since they “fail to establish that any injury they suffer from not having their loans forgiven is fairly traceable to the Plan.” The two plaintiffs — individuals who claim they weren’t eligible for part or all of the relief — said they were harmed by not having the opportunity to participate in a notice-and-comment period for the program.
In the second case, Biden v. Nebraska, the court found that at least one plaintiff, the state of Missouri, had the right to sue. Six states sued jointly — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — alleging the relief would harm tax revenue in those states in addition to the finances of certain state-based loan agencies.
With standing established, a 6-3 majority of justices declared that Biden’s student debt cancellation plan, enacted under the 2003 HEROES Act, was unconstitutional. Chief Justice John Roberts delivered the opinion of the court, joined by Justices Clarence Thomas, Samuel Alito, Brett Kavanaugh and Amy Coney Barrett.
“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” wrote Chief Justice John Roberts in the majority opinion. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”
Justice Elena Kagan penned the dissent, joined by fellow liberal justices Sonia Sotomayor and Ketanji Brown Jackson.
How did we get here and what’s next?
President Joe Biden’s student debt cancellation plan, first unveiled in August 2022, promised to erase up to $10,000 per individual borrower earning less than $125,000 annually or per married couple earning less than $250,000, and up to $20,000 for those who received a need-based Pell Grant while in college. The White House said that 90% of the relief would go to borrowers earning less than $75,000 per year.
Roughly 26 million borrowers applied or were automatically eligible for relief — and 16 million of them were approved by the Education Department and subsequently sent to loan servicers. The White House opened debt relief applications in October but closed them a month later as lawsuits swirled. The Supreme Court soon agreed to take on two of the lawsuits and held oral arguments for student debt cancellation on Feb. 28.
If you were among the millions of borrowers counting on this relief, you still have options to lower your monthly payments and even get some of your debt forgiven. Here’s what else borrowers need to know, and how to prepare for the impending end of forbearance.
What should I do now?
Get ready to make payments
Federal student loan payments are set to resume soon, with no possibility of further forbearance extensions. Interest will start accruing again on Sept. 1, and borrowers will have to resume monthly payments on their full student loan balance starting in October.
“Take your time, get very organized, identify where your loans are, what your repayment expectations are, sit down and actually create your own budget or spending plan,” says Stacey MacPhetres, senior director of education finance at EdAssist by Bright Horizons, an education and child care company. “And then take the time to figure out what you need to do.”
If you set money aside during the payment pause, consider making a lump sum student loan payment toward your balance before Sept. 1 to avoid racking up interest.
Find your servicer and set up payments
Check to see who your servicer is. Roughly 44% of borrowers now have a different federal student loan servicer than before the pandemic, according to the Consumer Financial Protection Bureau. You can identify your servicer by logging into your studentaid.gov account with your FSA ID or calling the Federal Student Aid Information Center at 800-433-3243.
Your servicer can help you do the following:
Check that your contact information is up to date.
Determine the amount you owe, the size of your monthly payments and when your first bill will be due.
Set up auto-pay. If you had this set up before forbearance, you’ll need to sign up again.
Expect long wait times when calling your servicer, cautions Scott Buchanan, executive director of the Student Loan Servicing Alliance. You may also be able to check some of this information on your servicer’s self-service online portal to avoid the customer service bottleneck.
Ask about income-driven repayment plans
If you anticipate not being able to make your student loan payment, your servicer can set you up with different payment plans and relief options. Consider asking about income-driven repayment (IDR) plans, which cap monthly bills at a set percentage of your income and erase remaining student debt after you make payments for a set number of years. If you earn below a certain income threshold or have lost your job entirely, you could pay as little as $0 per month under an IDR plan.
And a new IDR plan is in the pipeline that could cut monthly payments in half for most borrowers with undergraduate loans, and fast-track some with lower balances to forgiveness.
“I don’t know whether that plan will be ready to go in the fall,” Mayotte says. “But I know that there is a strong desire by the administration to get that plan, whatever it looks like, up and running sooner rather than later.”
If your student loans are in default
A temporary government program called Fresh Start could help if you had student loans in default before the payment pause. The program gives these borrowers the opportunity to re-enter repayment in good standing and access IDR plans and other relief.
Though borrowers will have one year to enroll in the Fresh Start program once forbearance officially ends this fall, they should apply as soon as possible, advises Michele Shepard, senior director of college affordability at The Institute for College Access & Success. The application is already open. You can sign up for the Fresh Start program today by going to myeddebt.ed.gov and logging in to your account, or calling the Federal Student Aid Office at 1-800-621-3115.
What if I can’t repay my student loans?
Shortly after the Supreme Court announcement on June 30, Biden announced a 12-month “on-ramp” repayment program. Borrowers who can’t make payments won’t fall into default until a year of missed payments, but interest will still accrue, so you should pay if you can.
Contact your servicer before you miss a payment. Ask about your options to lower or temporarily suspend payments through student loan deferment or forbearance. Start with an IDR plan, which sets payments at a portion of your income and extends your repayment term. These options can help keep you out of student loan delinquency (when a payment is late by as little as one day) and default (when a payment is at least 270 days late).
Don’t skip student loan payments. Defaulting on your loans can set off a devastating cascade of financial consequences, says Kristen Ahlenius, director of education at workplace financial wellness company Your Money Line. This can include credit score hits, seized paychecks and more.
Other ways to get help
Some nonprofit and legal organizations can offer student loan help as you navigate a return to payments. But be aware of scams, and avoid debt relief companies and anyone offering loan forgiveness. Only the government can forgive your student loans.
Here are some vetted student loan help resources to consider for information, advice or both; they are established organizations with verified histories:
“It feels like there’s a lot of fervor and panic right now,” MacPhetres says. “But there’s time, there’s opportunity, lots of repayment options and the servicers are there to help.”
True to its brand, Virgin Voyages does things a little differently than other cruise lines, and this ethos extends to its accommodations. Virgin Voyages’ cabins sport a minimalist look with futuristic touches, and its suites exude a rock-n-roll vibe with in-room turntables and peekaboo showers.
While these cruise rooms may be unique in the cruise industry, you won’t have trouble choosing your cabin or suite. Virgin offers a reasonable three styles of standard cabin and eight categories of suites, so your choice will be guided by your requirements around space, price and light.
Virgin also does not use standard cruise industry lingo to refer to its rooms. Inside cabins are Insider rooms, ocean views are Sea Views, and balconies are Sea Terrace cabins. Suites are RockStar Quarters. Many rooms can accommodate one to four guests, often in slightly unusual bed layouts, so pay attention if you’re traveling in a pack and looking to save a few bucks on your cruise fare.
For cruise news, reviews and tips, sign up for TPG’s cruise newsletter.
Whether this is your first cruise ever or your first with this cruise line, you’ll want to familiarize yourself with Virgin Voyages’ cabins and suites before you make that booking. Here’s everything you need to know.
A Virgin Voyages cabin primer
Sea Terrace on Scarlet Lady. ERICA SILVERSTEIN/THE POINTS GUY
Virgin Voyages sails three identical ships, with one more on the way by the end of 2023. Cabin categories and design are standard across the fleet, so if you’re familiar with one ship, you’re familiar with them all.
Here is a breakdown of the cabin types on Scarlet Lady, which should be the same across all the sister ships:
Insider inside cabins: 105 (8%)
Sea view outside cabins: 96 (7%)
Sea Terrace balcony cabins: 1,051 (79%)
RockStar Quarters suites: 78 (6%)
The cruise line caters to adults only; all passengers must be 18 years old. That means you won’t find any family-focused accommodations. However, you will find Insider and Sea View cabins designed for solo passengers, with a 3/4 size bed (larger than a twin but smaller than a full.)
Solo Sea View cabin. VIRGIN VOYAGES
Other cabins and suites in all categories can sleep three or four guests. Groups who don’t want to squeeze four into a room (and we wouldn’t recommend it, given Virgin’s tiny bathrooms and limited storage) can take advantage of connecting rooms.
Sign up for our daily newsletter
Balcony cabins are designated either regular, extra-large, centrally located or limited-view, and your cruise fare will change depending on which you choose. Cheeky Corner and Suite Aft Suites are also divided into Pretty Big Terrace, Even Bigger Terrace and Biggest Terrace classes.
Related: The 5 most desirable cabin locations on any cruise ship
Accessible cabins are available in Insider, Sea View, Central Sea Terrace, Extra-Large Sea Terrace and Seriously Suite categories.
All Virgin Voyages cabins mix a hip yet minimalist design (think IKEA or micro hotel) with tech-forward accessories (such as an iPad that controls the A/C, curtains and mood lighting). The look is more spare than you’ll find on other cruise lines that feature thick mattresses, fluffy duvets and faux-wood cabinetry in their cabins.
Seabed in couch setup. MELANIE ACEVEDO/VIRGIN VOYAGES
In standard cabins, the bed is modular – not only transforming from a queen bed to twins but also turning from a bed into an L-shaped lounging couch. In some quad layouts, a queen bed and an extra twin share the same headboard with a bunk overhead. The mattresses are rearranged on a long platform to form various arrangements; any uncovered portion of the platform serves as a nightstand or low table.
A triangular-with-rounded-edges odd-shaped white table serves as a desk and vanity in most standard cabins, with a round vegan leather stool beneath. It partially overlaps the shelving unit beneath that houses a mini-fridge and small shelves. Above is a round mirror and a shelf holding the room-controlling tablet.
Sea View and Sea Terrace cabins trade out the typical cruise ship cabin couch or love seat for a spare director’s style chair with a faux leather partial back and a padded seat.
Virgin also skips a full wardrobe for a more minimalist closet area where a hanging rod and a two-shelf luggage rack with storage baskets are hidden behind a curtain. A narrow floor-to-ceiling wardrobe contains four slim drawers, shelves housing the safe, life jackets and extra linens and a full-length mirror.
Sea Terrace on Scarlet Lady. ERICA SILVERSTEIN/THE POINTS GUY
It’s not a lot of storage space — perfect for one, manageable for two and likely impossible for three or four.
Standard bathrooms are also tiny and lacking in storage space. The shower has one measly shelf and pump bottles of Red Flower shampoo, conditioner and body wash. It offers both a rain shower head and a wand. The rest of the tiny bathroom features a bowl sink and a small vanity where you can store toiletries if you move the hand towels somewhere else (possibly the shelf below with the garbage can).
The entire space is tight, even for average-sized people. If you need spacious loos, you will need to book a suite.
Virgin Voyages ships have eight types of suites, ranging from 352-square-foot Seriously Suites (which are essentially extra-spacious regular cabins with slightly nicer furnishings and a much larger bathroom) to the 2,147-square-foot Massive Suite with separate living and sleeping areas, a music room, and a gigantic terrace with a dining table (with steps up in case you want to pull a Richard Branson and dance on it) and hot tub.
Related: Why you should splurge for a suite on your next cruise
Suites are split into two categories — RockStar Quarters and Mega RockStar Quarters — which determine which additional perks come with your booking.
Virgin claims that 86% of its cabins feature private balconies, and if you can, you want to book one of these. Why? Because each Sea Terrace comes with a sustainably sourced hammock that is extremely comfortable and unusual in the cruise industry — and for us, was the best part of the entire Virgin accommodation experience.
Inside cabins on Virgin Voyages cruise ships
Social Insider cabin. VIRGIN VOYAGES
Insider cabins are Virgin’s name for windowless interior rooms. They measure 105 to 177 square feet and can sleep one (Solo Insiders) to four people (Social Insiders). As we mentioned above, the Solo Insiders have a 3/4-sized bed. The four-person arrangement is two twin beds arranged in an L shape head to head, with two bunkbeds also in L shape right above. The intent is for the lower beds to be made up as couches during the day and transformed into beds at night.
The room is laid out like a standard Scarlet Lady cabin, but on the far wall, where a window would be, there’s a red, round art piece evocative of a porthole.
Ocean-view cabins on Virgin Voyages cruise ships
Sea View cabin on Scarlet Lady. ERICA SILVERSTEIN/THE POINTS GUY
Sea View cabins are slightly bigger at 130 to 190 square feet and can sleep one to three people, with one pull-down bunk and beds that convert from a queen to two twins. They are arranged identically to the Insider cabins, except they have a large round porthole window with a window seat on the exterior wall.
Some Sea View cabins come in slightly different configurations, especially the rooms located where the ship’s superstructure juts out at an angle. We toured one of these practically V-shaped rooms, which had one rectangular window rather than a full porthole. The window was on the same wall as the bed and chair, and the opposite wall had the desk, mini-fridge and mirror. The converging angle of the two walls made it a tight squeeze between the bed and the desk.
Related: Inside vs. outside cabin: Which affordable cruise room is best for you?
The bottom of the V, if you will, had a tall wardrobe and full-length mirror. The top of the V was the wall with the entry door, the bathroom and the closet hidden away in a tight corner by the window.
Balcony cabins on Virgin Voyages cruise ships
Sea Terrace on Scarlet Lady. ERICA SILVERSTEIN/THE POINTS GUY
Virgin calls its balcony cabins Sea Terraces. They measure 185 to 225 square feet, including the 45-square-foot terrace. They can sleep two to four people, but there’s only one bunkbed. To sleep four, two people will need to share a bed, the third bed will be perpendicular in an L shape (so three heads in close proximity) and the fourth is a bunk flush with the cabin wall above.
Sea Terraces share the layout of the other standard cabins. Note that cabins numbers on the port or A side of the ship have the beds by the bathroom and the desk by the balcony, and cabin numbers on the starboard or Z side of the ship have the reverse layout, with beds by the balcony and desks by the bathroom.
Balconies are outfitted with two upright not-that-comfortable metal chairs and a circular drinks table just big enough for two glasses. The real attraction here is the full-size red hammock hung from the ceiling. A grown adult can easily lay out or simply sit and swing in the hammock. Be prepared to come to blows with your cabinmate over who gets the hammock first and for how long.
Related: Why it pays to upgrade your cruise ship cabin
If you love your hammock so much you can’t live without it, you can buy one on board. The custom-designed hammocks are handwoven by women in rural Thailand and sold by Yellow Leaf, an organization focused on community transformation and female empowerment.
Suites on Virgin Voyages cruise ships
Suite with peekaboo shower. VIRGIN VOYAGES
Virgin Voyages’ 78 RockStar Quarters are broken down as follows (based on Scarlet Lady’s deck plans):
Two Massive Suites
Two Fab Suites
Two Posh Suites
nine Gorgeous Suites
18 Brilliant Suites
14 Cheeky Corner Suites (six Biggest Terrace, four Even Bigger Terrace and four Pretty Big Terrace suites)
24 Seriously Suites
Seven Sweet Aft Suites (three Biggest Terrace, two Even Bigger Terrace and two Pretty Big Terrace suites)
Massive Suite. VIRGIN VOYAGES
The Sweet Aft, Seriously, Cheeky Corner and Brilliant suites are considered RockStar Quarters. They come with the following perks:
Access to Richard’s Rooftop sun deck with hot tubs and a bar
Complimentary in-room bar setup (no refills)
Priority access to dinner and event reservations, plus shore excursion signups
RockStar agents (i.e. concierges) who can help you 24/7
Priority embarkation
Gorgeous, Posh, Fab and Massive Suites are considered Mega RockStar Quarters. They come with all the RockStar perks plus additional benefits:
A daily bar tab for complimentary drinks and bottles of wine throughout the ship
Complimentary Thermal Suite access at the Redemption Spa
Private transfers to the ship or free parking (depending on the departure port)
A personal RockStar Agent
Limitless in-room bar
Premium Wi-Fi on Caribbean cruises, allowing streaming on up to two devices
The suite that’s right for you will depend on your budget, the perks you value and where on the ship you wish to stay.
Related: How to snag cruise ship suites for less
Among the RockStar Quarters, the Seriously Suite is the most common suite type on board. It measures 352 square feet, including the balcony. It features a European king bed facing the floor-to-ceiling glass balcony doors, tall closet wardrobes, a brass vanity, a shelving unit with a turntable and bar setup and a window behind the bed looking into the extra-large shower. The bathroom is spacious with a marble tile look, and the terrace is only slightly larger than a standard one, with the same furnishings.
The Sweet Aft Suite ranges in size from 416 to 661 square feet, depending on the deck and the size of the balcony. The higher the deck, the bigger the suite and terrace. There’s one Sweet Aft Suite on each deck between decks 8 and 14, and each is located smack in the center of the back of each deck.
These suites also have a bed facing the windows, but the bathroom is to the side with a shower porthole looking onto the oversized balcony. In addition to the standard hammock, the terrace features two padded lounge chairs, a couch and a round metal table (meant for Champagne) and chairs.
The Brilliant Suite measures 482 square feet and looks like an expanded version of the Seriously Suite. The extra space allows for a modular couch that can double as a bed; this suite can sleep up to four. Its balcony is slightly longer than the Seriously Suite’s, meaning it can offer the larger Champagne table of the Brilliant Suite.
The Cheeky Corner Suite also comes in a range of sizes, 615 to 857 square feet, based on deck and balcony size. The 14 suites are at the back corners of the ship on decks 8 – 14, on either side of the Sweet Aft Suites.
Balconies wrap around the back and sides of the ships, and offer the same furnishings as the Sweet Afts but with the hammock tucked away in the side corner. Inside, the room has a corner sofa area and a large wardrobe.
Related: What not to do on a cruise balcony
All of the Mega RockStar Quarters are on Deck 15, directly beneath Richard’s Rooftop, for easy access.
Massive Suite terrace. VIRGIN VOYAGES
The Gorgeous Suite is the smallest at 570 square feet, and can sleep up to four. Its interior is similar to the Brilliant Suite, but the difference is in the balcony. The suite has a double-depth balcony with an outdoor shower and lounge chairs.
The Posh Suite measures 833 square feet, with living and sleeping areas divided by a wall. It can sleep four (the living room sofa can convert to a bed) and has a bath and a half (the master with a peekaboo shower looking into the bedroom and out the balcony doors beyond). The balcony is similar to the other suite terraces with lounge chairs, a hammock, Champagne table and chairs and a small couch.
The Fab Suite, at 950 square feet, is essentially an oversized version of the Posh Suite. The extra space allows for additional seating areas in both the living room and bedroom. It can also sleep four.
All the way forward on Deck 15, each of the two Massive Suites lives up to its name, coming in at a whopping 2,147 square feet. You enter the main living area with a circular couch seating area and a full bar. To one side is the music room, which can double as an extra bedroom; the suite sleeps up to four — that is if you don’t stay up rocking out on the provided guitars all night. An adjacent guest bathroom is ideal for hosting parties.
On the other side, the master bedroom has privacy behind sliding doors and floor-to-ceiling windows. Just behind, the marble-tiled dressing area features two closets and a soaking tub; turn the corner to find the rest of the bathroom, complete with the signature windowed shower.
The also-massive terrace is your own private backyard with a hot tub, outdoor shower, dining table for six, two hammocks, circular couch seating and padded lounge chairs.
Bottom line
Virgin Voyages’ cabins get the job done. However, its standard rooms won’t keep you inside when the real fun is found in the ships’ public areas. Their best feature is the hammock on every balcony.
For more spacious bathrooms, tricked-out terraces, lounge and seating spaces, and extra perks, upgrade to the RockStar Quarters. While you might want to bring the after-party back to your social living quarters, you miss out if you hide out in your upper-deck digs rather than immerse yourself in the entertainment and cozy hangouts found around Virgin Voyages’ ships.
Mortgage rates are moving up a little this morning as we march toward the big market moving event of the week: the monthly jobs report on Friday.
Long-term rates are still expected to increase so our recommendation remains for borrowers to lock on a purchase or refinance right now. Read on for more details.
Where are mortgage rates going?
Rates rise after moving lower yesterday
Mortgage rates are moving a little higher today. Yesterday, we saw the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, move down to its lowest level since late January.
Mortgage rates typically move in the same direction as the 10-year yield so rates improved slightly to start the week. Today, we’ve seen a bit of a reversal in the market with investors moving back into stocks, pushing Treasury yields and mortgage rates higher.
Rate/Float Recommendation
Lock now while rates are lower
Mortgage rates are on track to stay relatively flat this week. This is good news for anyone looking to buy a home or refinance their current mortgage. Rates are on track to move higher as the year unfolds so most borrowers will be better off locking in a rate soon.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Fedspeak
Minneapolis Fed President Neel Kashkari at 9:30am
Notable events this week:
Monday:
PMI Manufacturing Index
ISM Manufacturing Index
Construction Spending
Fedspeak
Tuesday:
Wednesday:
ADP Employment Report
Fedspeak
PMI Services Index
Factory Orders
FOMC Minutes
ISM Non-Mfg Index
EIA Petroleum Status Report
Thursday:
Jobless Claims
International Trade
Fedspeak
Friday:
Monthly Jobs Report
*Terms and conditions apply.
Carter Wessman
Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.
Filed Under: general, homeowner-tips, how-to-2, real-estate
Any renter knows that a new apartment comes with a new lease agreement. It’s just a part of the apartment rental process. Once you find the perfect apartment, you’ll sit down to finalize the paperwork, including the lease. Once you finalize this step, the apartment is yours!
Before you get too excited about moving in and decorating though, it’s important to understand the lease before you sign on the dotted line. This is your ultimate guide to lease lengths for your next apartment rental.
What is a lease?
Let’s start with the basics. A lease is a legally binding contract between a tenant and a property owner. Tenants agree to pay rent in exchange for leasing an apartment unit for a certain period of time. The lease defines everything from the rent rate to the move-in date.
Leases outline exactly how much money you’ll owe for each month’s rent and it also states how much you need to pay for a security deposit and other apartment application fees. Paying rent and security deposits are some of the rules agreed upon when you sign the lease and before you move in.
All apartment complexes and property managers will require tenants to sign a lease. Landlords want to rent to people who can pay the cost of the property each month and are willing to agree to the legally binding lease.
How long is a lease for an apartment
Now that you understand leases at a high level, let’s talk about lease lengths. The length of the lease can vary, depending on the landlord or property owner. Before signing, you need to understand how long you’re signing for as you’re legally bound to the lease terms.
Leases range from short-term leases to long-term leases. Some landlords allow you to rent on a month-to-month basis while others require an annual commitment. Term leases will be in the lease document and will designate how long you’re required to stay in the lease. You can break a lease, but you’ll often see hefty fees involved in terminating your lease early.
Depending on where you are in life and what you’re looking for when it comes to renting, you’ll want to decide what lease terms are right for you. Once you know your living situation, you can sign the lease agreement that is right for you.
How long do most apartment leases last?
Most apartments will offer a term lease that is at least a year. Property managers want tenants to sign a year-long lease because it guarantees they’ll have a tenant renting the unit and paying rent for 12 months. The property manager is responsible for filling units so a longer lease is appealing to them.
However, you can find a variety of lease lengths, depending on the apartment complex and the landlord. You can also negotiate your lease terms when it comes time to renew the lease agreement.
What is the shortest time you can lease an apartment?
Lease terms vary but short-term leases are anything shorter than one year. Anything more than one year is a long-term lease. Regardless of the lease term, you’ll still pay a security deposit and monthly rent for all rentals.
You can find a short-term lease that ranges anywhere from 30 days to three months to six months. Short-term rentals will outline the lease term in the many pages of the agreement itself.
A six-month lease is short term but the shortest of all is a month-to-month lease or a 30-day lease agreement.
What is a month-to-month lease?
Month-to-month leases allow the new tenant to decide each month if they want to renew and keep renting. Though this agreement provides flexibility to the renter, it will typically cost more. Landlords have to continually find new renters for the open apartments so a month-to-month lease is a riskier option for them.
Usually, with a short-term lease, you’ll need to give the landlord 30-days’ notice before you vacate the apartment. For month-to-month leases, this means you need to know if you’re staying into the next month when you sign the short-term lease.
Basically, you’ll need to plan 60 days out when you want to move in and move out before signing anything. Otherwise, you might owe fees for breaking the lease early.
With other short-term leases, you’ll still need to give the landlord a heads-up before you plan to move out. Remember, the lease is a legally binding contract so make sure you understand the fine print before signing it.
Reasons to choose a short-term lease
So, why would people choose a short-term lease? Here are a few pros and cons.
Pros of a short-term lease
You can try a new city — Short-term leases are great if you’re considering moving to a different city. You can sign a month-to-month lease without having to commit to an extended time in that location. If you like the city, great! You can consider signing a long-term lease after your first month is up. Or, if you don’t love where you live, you can find a different city or apartment.
You can move out into your first apartment with low risk — Your first time moving out is a big, intimidating decision so avoiding a long-term lease is a good idea if you’re unsure about living on your own. By signing a shorter lease agreement, you can test if you like living on your own or not.
You can rent furnished apartments — If you travel a lot for work or are a digital nomad, then a short-term lease with furnishings included are a great option. You can move from place to place fairly easily without having too many objects or commitments tying you down.
Cons of a short-term lease
They cost more — Because short-term rentals are riskier for a landlord, they typically cost more. You might see a ding in your bank account because the fees, like rent and the security deposit, are higher.
You’ll need to plan your next move frequently — A short lease term means you need to have the next move already planned out. Thirty, 60 or 90 days will come and go quickly, so you need to think ahead about if you’ll stay or go. This is stressful for some people who don’t like constantly planning the next move.
What is the longest lease term for an apartment?
If a short-term lease is anything under 12 months, then a long-term lease is 12 months or more. The lease term will vary, but you can find leases for 12 months, 15 months or even 24. It’s up to the landlord to determine the exact lease term.
Reasons to choose a long-term lease
A long-term lease is a good option for renters who know they want to stay in one place for a longer period of time. These lease agreements provide:
Stability — When you stay at one apartment for a while, you have more stability because you’re able to plant roots and know you won’t have to move frequently.
Guaranteed place to live — Unless you’re evicted, you have an equal housing opportunity to find a place and stay there through the length of your lease.
Ability to budget — Knowing that you’ll be in the same place for a set amount of time, you can budget how much you’ll spend in rent for the length of the lease. This can help ease financial stress.
Building a relationship with the landlord – As you stay in one place because of a long-term lease, you’ll build rapport with your landlord, which is a nice benefit for when you move in the future to have a landlord reference on-hand.
What you need to know about monthly rent and an apartment lease
When you’re apartment hunting, you need to consider everything from location to the cost of rent to lease length. Regardless of the lease duration, you need to know that state laws view leases as legally binding contracts. So, don’t sign anything before you fully comprehend the ins and outs of the lease.
Do you understand the lease terms so you know what you’re getting yourself into? Before you dot your “i’s” and cross your “t’s”, ask yourself these questions:
How much can I spend in monthly rent?
Can I afford the security deposit and other fees?
How long do I want to live in one place?
Do I want a month-to-month lease or a year-long lease?
Truthfully answering these questions for yourself will help the process move smoothly and ensure you’re moving into the place of your dreams and signing the terms you are comfortable with.
Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.
Bonds Crushed by Data, But Technically Still in The Range
By:
Matthew Graham
Thu, Jun 29 2023, 4:33 PM
Bonds Crushed by Data, But Technically Still in The Range
At many points in the past week, we’ve lamented the narrow, boring nature of the prevailing trading range. The thesis has been constant: it will take data to prompt a more meaningful move as the market trades on technicals in the meantime. Today’s data did it’s best to prompt a meaningful move with GDP revised up 0.6% and Jobless Claims falling most of the way back down to earth. Bonds reacted with their largest sell-off in several weeks. Ironically, because the starting point was the bottom of the range, the sell-off was only able to get yields up to the ceiling of the range.
Jobless Claims
239k vs 265k f’cast, 264k prev
Q1 GDP
2.0 vs 1.4 f’cast
GDP Final Sales
4.2 vs 3.5 f’cast, 1.1 prev
Pending Home Sales
-2.7 vs -0.5 f’cast, -0.4 prev
09:07 AM
Weaker overnight with additional selling after econ data. MBS down 5/8ths and 10yr up 11bps at 3.823.
11:45 AM
Snowball selling into the 10am hour and leveling off after that. 10yr up 13.2bps at 3.846 and MBS down 5/8ths.
02:42 PM
Still sideways at weaker levels, 10yr up 13.6bps at 3.85. MBS down 3/4ths.
04:16 PM
Off the weakest levels, but still generally flat. 10yr up 12.4bps at 3.838. MBS down just under 3/4ths.
Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.
The average 30-year-fixed rate mortgage climbed to 3.69% for the week ending Feb. 3, up eight basis points from the previous week. It’s the highest level since the start of the pandemic, according to the latest Freddie Mac PMMS Mortgage Survey.
Before the uptick, the rates remained flat at 3.55% for three weeks, reflecting the impact of the Omicron variant in the economy.
A year ago, the 30-year fixed-rate mortgage averaged 2.73%. The PMMS report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
“The normalization of the economy continues as mortgage rates jumped to the highest level since the emergence of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
Mortgage rates usually move in concert with the 10-year Treasury yield, which reached 1.92% yesterday, compared to 1.78% on the previous Wednesday. The 15-year-fixed-rate mortgage averaged 2.93% last week, up from 2.77% the week prior. A year ago at this time, it averaged 2.19%.
Most economists believe rates will climb in the months ahead – but will still be close to record-low levels. The Mortgage Bankers Association (MBA) forecasts that 30-year mortgage rates will reach 4% by the end of 2022.
Sponsored Video
“Rate increases are expected to continue due to a strong labor market and high inflation, which likely will have an adverse impact on homebuyer demand,” Khater said.
The expectation of higher mortgage rates is based on the fact that the Federal Reserve will raise interest rates. The central bank said it will happen “soon,” though an exact timetable has not yet been disclosed.
“With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Federal Open Markets Committee said in a statement.
Rising rates are impacting borrowers’ appetite.
Mortgage applications decreased 8.1% from the previous week, a response to an uptick in mortgage rates and record houses prices, according to the MBA survey for the week ending Feb. 4. The average loan size again hit another record high at $446,000. The seasonally adjusted refi index fell 7.3% while the purchase index dropped 9.6%.
Mortgage rates tickets slightly up but remain within the 6% to 7% range, according to Freddie Mac. (iStock)
Mortgage rates ticked slightly up, still hovering within the 6% to 7% range, but home sales show buyers are shrugging off the more expensive borrowing costs, according to Freddie Mac.
The average 30-year fixed-rate mortgage increased to 6.71% for the week ending June 29, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s up from the previous week when it averaged 6.67%. A year ago, the 30-year fixed-rate mortgage averaged 5.7%.
The average rate for a 15-year mortgage was 6.06%, up from 6.03% last week and up from 4.83% last year.
The slight shift marks another week that rates remain within the 6% to 7% range. However, a recovery in home sales may indicate that buyers are accepting the higher borrowing costs as the new normal, according to Freddie Mac Chief Economist Sam Khater.
“Mortgage rates have hovered in the six to seven percent range for over six months and, despite affordability headwinds, homebuyers have adjusted and driven new home sales to its highest level in more than a year,” Khater said. “New home sales have rebounded more robustly than the resale market due to a marginally greater supply of new construction.
“The improved demand has led to a firming of prices, which have now increased for several months in a row,” Khater continued.
If you are looking to buy a home, you can take advantage of lower mortgage rates and shop for the best rate on a loan. You can visit an online marketplace like Credible to compare rates, choose your loan term and get preapproved with multiple lenders at once.
THESE TWO FACTORS COULD BE DRIVING YOUR CAR INSURANCE COSTS UP
Interest rates could move higher
Federal Reserve Chair Jerome Powell said in a recent statement that inflation remains high and the process of getting it to a 2% target rate “has a long way to go.”
The central bank has already raised rates 10 times in 2022 and 2023 to bring inflation down to a 2% target. In June, it announced a much-anticipated pause on interest rate increases following continued moderation in inflation.
The interest rate increase means the federal funds rate will remain in a targeted range of 5% to 5.25%, the highest level in 16 years.
“With the Fed taking a breather from monetary tightening until its July meeting, capital markets are assessing the outlook for the second half of 2023,” Keeping Current Matters Chief Economist George Ratiu said in a statement. “On the upside, even with interest rates more than double what they were at the start of 2022, the economy continues to expand as consumers – buoyed by jobs and rising wages – manage to spend more on goods and services.
“On the downside, the Federal Reserve has been clear that inflation is still hotter than desired, and additional rate hikes are on the table,” Ratiu continued. “Based on the central bank’s forward guidance, we can expect two more rate increases in the months ahead.”
Despite the continued pressure on interest rates, mortgage rates are still expected to drop near 6% by the end of 2023, Realtor.com Chief Economist Jiayi Xu said in a statement.
If you’re trying to find the best mortgage rate, it can help to shop around. Visit the Credible marketplace to compare options from different lenders at once without affecting your credit score.
MORE STUDENTS TURNING TO FEDERAL AND PRIVATE STUDENT LOANS TO FINANCE COLLEGE: SURVEY
Construction of more affordable homes, increasing
Demand for affordability is driving the construction of more homes priced under $300,000, according to a report by Realtor.com. Early estimates in May indicate that homes within this price range constituted approximately 17% of total sales, marking the highest share since December 2021 (18%).
“Despite this encouraging news, there remains an urgent need for more homes at the most affordable price points, where the shortage of available inventory is most severe,” Xu said.
If you are ready to shop for a mortgage, you could get a better rate by looking at several lenders. Credible can help you compare interest rates from multiple mortgage lenders and choose the one with the best rate for you.
HOMEBUYERS ARE FINDING BETTER DEALS IN THESE CITIES, SURVEY SAYS
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.
The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-13 this week, which requires the use of a form that allows borrowers to voluntarily state their language preferences and provide information on any housing counseling and homeownership education they received.
The form, the Fannie Mae/Freddie Mac Form 1103, is known as the Supplemental Consumer Information Form (SCIF). It will be required for all FHA loan applications issued on or after August 28, 2023.
“Requiring the SCIF can inform a lender or mortgage servicer’s provision of services in languages other than English and in accordance with a borrower’s understanding of the homebuying and mortgage lending processes,” the FHA said in an announcement.
Collecting the information specified in the SCIF will allow the FHA to “enable a better aggregate view of language preferences for the borrowers it serves, which in turn will influence its future actions to continue breaking down language and other barriers to homeownership,” according to the announcement.
Lenders working with borrowers on FHA Title II forward mortgage financing will be required to present the SCIF during the application process.
“The SCIF has already been adopted for conventional mortgages and we believe that its use is even more important for FHA-insured mortgages, given FHA’s outsized role in providing access to mortgage financing for underserved populations,” HUD Deputy Assistant Secretary for Single Family Housing Sarah Edelman said in the announcement. “This announcement complements the work we recently completed to provide translated versions of mortgage documents and homebuyer education resources.”
The National Consumer Law Center (NCLC) applauded the move by the FHA, noting that it will help level the playing field in terms of access to FHA financing.
“We applaud FHA’s leadership for recognizing how crucial language access is to reducing barriers to homeownership for millions of hardworking families in populations that have been underserved by FHA financing,” Alys Cohen, senior attorney at NCLC, said in a statement. “FHA is a crucial source of mortgage credit in underserved communities, and collecting language preference will expand FHA’s reach and help borrowers gain access to essential information in their preferred language.”
Identifying language preference is an important step toward serving borrowers who have limited English proficiency (LEP), added Nicole Cabañez, Skadden Fellow at NCLC.
“We celebrate this tool for allowing borrowers to express their language needs in an efficient, systematic way, while also recognizing that lenders and servicers also must be required, not merely encouraged, to respond to the needs of LEP consumers with concrete steps to increase access to written and oral assistance,” Cabañez said. “We urge FHA to continue reducing barriers to the mortgage market for LEP homeowners.”