Realtors

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Good news, home buyers — expect both lower mortgage rates and home prices in 2024, which could ease the cost of homeownership, Redfin
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says.

In its housing outlook for 2024, the real-estate brokerage said that next year would not only be “a year of change” but one where aspiring homeowners will finally be “catching a break.”

“2024 will be neither a buyers’ nor a sellers’ market, but we think that the market will be tilting in favor of buyers with lower rates, lower prices, and more inventory as sellers get tired of waiting for rates to drop,” Chen Zhao, Redfin’s economics research lead, told MarketWatch. 

“The increase in supply is likely to exceed the increase in demand, creating a market more friendly for buyers than 2023,” she added.

Home prices and mortgage rates to fall in 2024, according to Redfin 

The brokerage expects home prices to fall 1% on a year-over-year basis in the second and third quarter of 2024. Aside from a brief drop in the first half of this year, the decrease would be the first time prices would have fallen since 2012, Redfin added, “when the housing market was recovering from the Great Recession.” 

The median price of a home sold in October 2023 was $391,800, according to the National Association of Realtors. Prices were up 3.4% from last October.

Redfin expects home prices to fall in part because it expects the “lock-in” effect to subside. The lock-in effect refers to people who don’t want to sell their current home because of their relatively low mortgage rate.

“We’ve recently seen a double-digit annual increase in homeowners contacting Redfin for help selling their home, alongside a small drop in requests from prospective buyers,” the company noted.

Some homeowners are warming up to the idea of borrowing at a rate of 7%, Redfin said, because they may not see mortgage rates fall to the 3% – 4% range any time soon. Others see an opportunity to cash out on their equity and move to a more affordable place, the company added.

Redfin’s forecast also expects mortgage rates to drop. The rate on the 30-year fixed-rate mortgage was averaging 7.22% as of Nov. 30, according to Freddie Mac. The 30-year will fall throughout the year, Redfin said, and drop to 6.6% by the end of 2024. Even though Redfin expects the U.S. Federal Reserve will keep interest rates at their current level for the time being, it’s expecting a rate cut two or three times starting in the summer, which would bring mortgage rates down, they explained.

A separate 2024 housing forecast by Realtor.com predicted that mortgage rates will drop to 6.5% by the end of 2024.

Redfin also expects home prices to fall more significantly in certain parts of the nation, such as in parts of coastal Florida. Considering the run-up in home prices in places like North Port and Cape Coral, Redfin explained, there’s a “lot of room to fall.” Additionally, there’s the rising risk of climate disasters, such as hurricanes and storm surges, which make it more expensive to own homes in such areas given the rising cost of home insurance and other associated repair and rebuilding costs.

“At the same time, affordable and climate resilient places such as Albany, N.Y., Rochester, N.Y., and Grand Rapids, Mich., could see more rapid price appreciation,” Zhao added.

Political and legal developments to watch for in 2024 

Redfin also noted that buyers and sellers will be more aware of the commissions they pay to real-estate agents next year, on the back of a landmark jury verdict in 2023 which upended a decades-long arrangement. Redfin is one of the defendants named in another class-action suit by home sellers, and is accused of engaging in a price-fixing conspiracy to inflate commissions.

Instead of the home seller bearing the 5-6% fee paid to their broker, which has historically been shared between the listing agent and the buyer’s agents, the arrangement may change. “Home buyers in 2024 will become even more aware of how much an agent costs,” Redfin said, “and less apologetic about negotiating commissions.”  

Buyers may also forgo working with their own agent and work directly with the listing agent, Redfin suggested.

Additionally, Redfin expects the Biden administration to focus more efforts on housing, given how rapidly affordability has deteriorated in the last year. Considering the fact that home prices are up more than 20% since the president took office, Redfin said, “high housing costs are making many Americans feel poor.” 

The Biden-Harris campaign did not respond immediately to a request for comment.

“We expect President Biden and his opponents to make splashy housing policy proposals to try to lure voters who are unhappy with their economic prospects,” Redfin said.

“Democrats are likely to focus on subsidizing down payments for first-time homebuyers, promoting inclusionary zoning and funding housing vouchers, which are all popular with liberal voters,” the company added. “Republicans are more likely to focus on reducing regulations that limit development.”

Source: marketwatch.com

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More home sellers on the East Coast are getting in on the commission lawsuit action.

Plaintiffs in Florida and Pennsylvania filed lawsuits on Monday, accusing real estate industry players of allegedly colluding to artificially inflate real estate agent commissions. Both lawsuits are seeking class-action status.

Similar to the other commission lawsuits, the latest two take aim at the National Association of Realtors’ Participation Rule, which requires the listing broker to make a blanket offer of compensation to the buyer’s broker to list the property on the MLS.

The Florida commission lawsuit was filed by Parker Holding Group, a Panama City-based firm that sold homes in March and August 2021, in Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County.

Defendants in the lawsuit include the Florida Association of Realtors, the nation’s largest state Realtor group with 238,000 members, and 16 large local brokerages, with agent counts ranging from 655 to nearly 4,000. Brokerages named in the suit include The Keyes Company, LPT Realty, Charles Rutenberg Realty, Charles Rutenberg Realty-Orlando, United Realty Group, The K Company Realty, Florida Homes Realty & Mortgage, Dalton Wade, Avanti Way Realty, MVP Realty Associates, Florida Realty of Miami, Lifestyle International Realty, Watson Realty, Premiere Plus Realty, Future Home Realty and Michael Saunders & Company.

Like the other commission lawsuits, the Parker suit alleges that the defendants colluded “to impose, implement, and enforce anticompetitive restraints that cause home sellers in Florida to pay inflated commissions in connection with the sale of their homes.”

Because this is a state lawsuit, the complaint claims the alleged behavior is in violation of the Florida Antitrust Act of 1980 and the Florida Deceptive and Unfair Trade Practices Act, and not the Federal Sherman Antitrust Act.

The complaint names local Realtor associations, MLSs and the brokerages’ employees and agents as co-conspirators, accusing them of using their control over the state’s Realtor association-affiliated MLSs to impose rules from NAR that allegedly promote anticompetitive practices.

“In a raw demonstration of market power, the Florida Realtor MLSs overturn the natural order of a rational price system where home sellers and home buyers each separately bargain and pay for the services provided to each of them,” the complaint alleges.

The proposed class for the suit includes all Florida citizens who have sold a property through one of the state’s Realtor association-affiliated MLSs and paid a buyer broker commission between Dec. 4, 2019 and the present.

The plaintiffs are demanding a jury trial, treble damages, coverage of the cost of the suit and a permanent injunction “to permanently enjoin and restrain Defendants from establishing the same or similar rules, policies, or practices as those challenged in this action in the future.”

In an email, Florida Realtors’ general counsel Juana Watkins wrote that the group denies these allegations.

“Florida Realtors will defend against this action,” Watkins wrote. “Florida Realtors® stands by the value of the professional expertise that its members provide to their clients. Going forward, Florida Realtors® does not comment on pending litigation.”

Juan Baixeras, the broker/owner of family-run Florida Realty of Miami, said he is hopeful that the state Realtor association will help him out and offer guidance.

“These allegations are absurd. It’s just law firms trying to cash in on the previous success of the other lawsuit,” he wrote in an email. “We have never fixed prices. Our commission has always been negotiable. We are a 100% commission office, we get paid a flat fee of $355 no matter what commission comes in. So, price fixing commissions would not help us at all, we would still make $355.”

Another commission lawsuit in Pennsylvania was filed by Homesellers Spring Way Center, John and Nancy Moratis and Nancy Wehrheim in U.S. District Court for the Western District of Pennsylvania. Defendants in the suit include West Penn MLS, a local broker-owned MLS that is not affiliated with NAR, and eight local brokerages, including Berkshire Hathaway HomeServices The Preferred Realty, NRT Philadelphia LLC, Piatt Sotheby’s International Realty, NextHome PPM Realty, NextHome Dynamic, Realty One Group Gold Standard, Realty One Group Platinum and Realty One Group Horizon.

Despite not being affiliated with a Realtor association, West Penn MLS has adopted a rule similar to NAR’s Participation Rule.

The complaint alleges that the rule is anticompetitive because “it compels the seller to compensate the broker representing the purchaser even though that broker should be working for the purchaser, not the seller; it mandates a ‘blanket offer,’ meaning that the same compensation must be offered to every buyer’s broker, regardless of skill, experience, or the services provided; and it has the effect of encouraging ‘steering’ by buyer-brokers, because it incentivizes them to direct their clients to properties with higher commission offers.”

The Center suit complaint cites the Sitzer/Burnett case, stating that the defendants’ alleged practices “are not unique; rather, they are part and parcel of nation-wide collusion within the real estate industry to maintain inflated commissions.”

The lawsuit also names co-conspirators, including “local and state Realtor associations,” as well as “other brokerages within that geographic area.”

The proposed class for the lawsuit includes all home sellers who used a listing agent or broker affiliated with or employed by one of the brokerage defendants in the sale of a home listed on the West Penn MLS, and who paid a commission to the buyer’s broker.

This suit also demands a jury trial, treble damages, coverage of the cost of the suit and a permanent injunction “enjoining Defendants from (1) requiring that sellers pay the buyer broker and (2) continuing to restrict competition among residential real estate brokers in the manner set forth above,” according to court records.

The two new commission lawsuits are just the latest in an ever-growing pile of copycat cases that have been filed since late October when a Missouri jury found the real estate industry liable for colluding to artificially inflate agent commissions in the Sitzer/Burnett trial. A motion for injunctive relief has yet to be filed in that lawsuit and a final ruling from the judge is not expected until spring 2024.

Editor’s note: HousingWire reached out to all of the defendants in the latest lawsuits for comment and will update this story as comments are returned.

Source: housingwire.com

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Many people want to buy a home but think it isn’t possible because they don’t have money to put toward a down payment. Traditionally, lenders require a 20% down payment toward your mortgage.

But a 20% down payment adds up to a lot of money. For example, if you plan to purchase a $150,000 home, you’d need to come up with a $30,000 down payment. Many people cannot afford this, but fortunately, the 20% rule is a lot less common than you might think.

Is a buying a house with no money down possible?

The National Association of Realtors (NAR) reports that 39% of non-owners believe they need a 20% down payment or more and 22% believe they need a 10% to 14% down payment.

But neither of these are true. Many mortgage lenders will let you buy a home by putting down as little as 3%. And some lenders will let you skip the down payment altogether.

NAR also found that 61% of first-time homebuyers made a down payment between zero and 6%. So, it’s safe to say that a 20% down payment isn’t the standard anymore. But unfortunately, many consumers choose not to pursue homeownership because they believe this down payment myth.

Weighing the Pros and Cons of No Down Payment Mortgages

Is there any reason to aim for 20% down when most home buyers buy with a down payment less than 20%? If you can afford it, yes, the 20% rule is still a wise choice.

The more money you put toward your mortgage, the less debt you’ll have to repay and the less your monthly payment will be. Plus, there are several drawbacks to putting down less than 20%:

  • Less favorable rates: If you pay less than 20%, lenders will probably see you as a risky investment. And they will take this into consideration when calculating your mortgage rates. In general, you can expect to pay a higher interest rate if you put down a smaller down payment.
  • Higher closing costs: Closing costs are based on the size of your mortgage. So, the smaller your down payment is, the higher your closing costs will be. However, you may be able to get around this if you live in a state where it’s typical for the seller to pay the closing costs.
  • Private mortgage insurance (PMI): Private mortgage insurance is a type of mortgage insurance designed for borrowers who make a down payment lower than 20%. It protects your mortgage lender in case you end up defaulting on your loan.

PMI can cost as much as 1% of your total monthly mortgage payment. So for a $150,000 mortgage, you’ll end up paying $150 per month.

However, this may not be that bad, especially if you have a less expensive mortgage. And once you reach 20% home equity, you can cancel your PMI and get rid of these extra payments.

Check Out Our Top Picks for 2023:

Best Mortgage Lenders

How to Buy a House With No Money Down

Fortunately, there are several lending programs that do not require a down payment. Here are five payment assistance programs that will help you buy a home with little to no down payment.

1. VA Loans

VA loans are a valuable option for eligible military veterans, active-duty service members, and certain surviving spouses. These government-backed loans offer several benefits, making homeownership more accessible and affordable through the use of a VA loan.

100% Financing and No Down Payment

One of the most significant advantages of VA loans is the 100% financing, meaning you won’t need to make a down payment when utilizing a VA loan. This can save borrowers a substantial amount of money upfront, making it easier to enter the housing market.

No Private Mortgage Insurance (PMI) Requirement

Unlike conventional loans that require PMI for down payments less than 20%, VA loans do not require PMI. This can save borrowers hundreds or even thousands of dollars per year in mortgage insurance premiums when using a VA loan.

VA Funding Fee

While VA loans offer numerous benefits, there is a one-time funding fee charged to help offset the costs of the program. The funding fee is 2.15% of the total loan amount for first-time users of VA loans and 3.3% for subsequent uses.

This fee can be financed into the VA loan, reducing the out-of-pocket expenses for the borrower. In some cases, borrowers may be exempt from the funding fee, such as those with service-connected disabilities.

Certificate of Eligibility

To apply for a VA loan, borrowers need to obtain a Certificate of Eligibility (COE) from the Department of Veterans Affairs. The COE verifies the borrower’s eligibility for the VA loan program based on their military service or, in some cases, the service of their spouse. The COE can be requested online through the Department of Veterans Affairs website, by mail, or through an approved lender.

Additional Benefits

VA loans also offer competitive interest rates, more lenient credit requirements, and flexible underwriting guidelines compared to conventional loans. Additionally, there are no prepayment penalties, allowing borrowers to pay off their VA loans early without incurring additional fees.

2. Navy Federal Credit Union

Navy Federal Credit Union’s loan program is similar to what the VA offers. It offers a zero down mortgage and no mortgage insurance. And Navy Federal’s funding fee is only 1.75%.

Navy Federal offers a 30-year loan and a 30-year jumbo loan. 30-year loans have a loan limit of $424,100 while jumbo loans are available up to $1 million. However, you will have to be a Navy Federal member to qualify.

3. USDA Loans

If you’re looking to move to a rural area, you might qualify for a USDA loan. The United States Department of Agriculture Housing Program was designed to aid rural development and is aimed at low-income families. USDA loans offer 100% financing with low interest rates.

Here are the eligibility requirements you must meet to qualify for a USDA loan:

  • When buying a home it must be within the USDA’s boundaries: Although this loan targets rural areas, some suburban areas may still qualify. You can look at this map on the U.S. Department of Agriculture’s website to see if your location falls within the USDA’s geographical boundaries.
  • Your household income can’t exceed a certain threshold: This applies to everyone living in the household, even if they won’t be listed on the mortgage. For instance, if you have a parent living with you who collects Social Security, this counts toward the gross income of all members of a household. The maximum household income varies by state and county so you can find out if you qualify here.

See also: Best Home Loans for Low-Income Borrowers

4. Lease-Option

A lease-option (also known as rent-to-own) allows you to rent a home with the option to buy it at a predetermined price after a certain period. A portion of your monthly rent may be applied toward the purchase price or down payment. This can be a solid option if you need more time to save for a down payment or improve your credit.

5. Seller Financing

In some cases, the seller may be willing to finance the property for you, allowing you to purchase the home without a traditional mortgage. This arrangement typically requires a contract outlining the terms of the loan, including the interest rate, payment schedule, and any potential penalties.

Seller financing can be a viable option if you have a strong relationship with the seller or if the seller is having difficulty selling the property.

6. Crowdfunding

Crowdfunding is a method where you raise money from multiple individuals, typically through online platforms. You can set up a campaign to raise funds for your down payment or even the entire purchase price. This method may work best if you have a strong network of friends, family, and supporters who are willing to contribute to your home-buying goal.

7. Shared Equity Agreements

Shared equity agreements involve partnering with an investor who provides a portion or all of the down payment in exchange for a percentage of ownership in the property. When the property is sold or refinanced, the investor receives a return on their investment based on the agreed-upon share of equity. This can be an attractive option if you can’t afford a down payment but are willing to share future appreciation in the home’s value.

8. Housing Assistance Programs

There are numerous local, state, and federal housing assistance programs that offer grants, low-interest loans, or other forms of financial support to help eligible individuals purchase a home with no money down. These programs often have specific requirements, such as income limits, property location, or first-time homebuyer status. Be sure to research and apply for any programs for which you might be eligible.

Low Down Payment Loans

If you’re unable to buy a house with no money down but can afford a small down payment, consider these low down payment options that can help make homeownership more accessible.

1. 97% LTV mortgages

97% LTV mortgages is a loan program that is offered to first-time homebuyers by Fannie Mae and Freddie Mac. They require a 3% minimum down payment and private mortgage insurance.

Here are the guidelines for the program:

  • You’ll need a credit score of at least 680
  • One of the borrowers must be a first-time homeowner
  • Manufactured housing isn’t permitted
  • Gifts, grants, and other funds may be used toward the down payment

2. Federal Housing Administration (FHA) Loans

The Federal Housing Administration (FHA) was established in 1934 to reduce the requirements to qualify for a mortgage. This government-backed mortgage program offers flexible requirements, making it an attractive option for first-time homebuyers.

Here are the guidelines you’ll need to meet to qualify for an FHA loan:

Credit Score Requirements

The minimum credit score required to qualify for an FHA loan is 500. The specific down payment requirements depend on your credit score:

  • If your credit score is between 500 and 579, you’ll need to make a 10% down payment.
  • If your credit score is 580 or higher, you’ll have to make a 3.5% down payment.

Seller Contributions

FHA loans allow sellers to contribute up to 6% of the closing costs. This can help reduce the upfront costs for the buyer and make it easier to afford the purchase.

Mortgage Insurance Requirements

Mortgage insurance is required for an FHA loan, protecting the lender in case the borrower defaults on the loan. However, once you build 20% equity in the home, you can refinance to a conventional loan to eliminate the mortgage insurance requirement.

Debt-to-Income Ratios

FHA loans accept high debt-to-income (DTI) ratios, allowing borrowers with significant existing debt to still qualify for a mortgage. The FHA typically requires a maximum DTI of 43%, but exceptions can be made for borrowers with compensating factors, such as substantial savings or a history of making large payments on time.

3. HomeReady Mortgage

The HomeReady mortgage is a Fannie Mae program designed for low-to-moderate-income borrowers. It requires a down payment as low as 3% and offers flexible underwriting guidelines, making it an attractive option for first-time homebuyers or those with limited credit history.

4. Home Possible Mortgage

Similar to the HomeReady mortgage, the Home Possible mortgage is a Freddie Mac program that allows for a down payment as low as 3%. It is designed to help low-to-moderate-income borrowers achieve homeownership and offers flexible underwriting guidelines.

5. State and Local Homebuyer Assistance Programs

Many state and local governments offer homebuyer and down payment assistance programs that provide grants or low-interest loans to help cover down payment and closing costs. These programs typically have income and property location requirements, so be sure to research and apply for any programs for which you might be eligible in your area.

Each of these low down payment mortgage options has its own set of eligibility requirements and potential benefits. Be sure to research and compare these options to determine which one best aligns with your financial situation and home-buying goals.

Preparing for Homeownership

Before jumping into the home buying process, it’s essential to prepare yourself financially and mentally. This section covers tips for improving credit scores, creating a budget, and managing debt to make the home buying process smoother.

Credit Score Improvement Tips

Improving your credit score involves checking your credit report for errors and disputing any inaccuracies. Ensure that you pay your bills on time and reduce outstanding debt as much as possible. Keep credit card balances low, avoid opening new credit accounts, and consider requesting a credit limit increase without increasing your spending.

Creating a Budget

Creating a budget requires tracking your income and expenses to understand your spending habits better. Categorize your expenses and set realistic limits for each category. Allocate funds for saving and investing, including a down payment and emergency fund, and regularly review and adjust your budget as needed.

Managing Debt

Managing your debt effectively involves prioritizing high-interest debt and paying more than the minimum payment. Consider debt consolidation or refinancing options to secure a lower interest rate. Avoid taking on new debt before applying for a mortgage and create a debt repayment plan that you can stick to.

Understanding the Total Cost of Homeownership

Understanding the total cost of homeownership means factoring in property taxes, insurance, maintenance, and utility costs. Estimate homeowners association (HOA) fees if applicable and consider the costs of furnishing and updating the home. Prepare for potential increases in expenses over time, such as property tax hikes.

How to Choose the Right Mortgage Option

With various mortgage options available, it’s crucial to select the one that suits your financial needs and long-term goals. This section discusses factors to consider when choosing a mortgage, such as loan term, interest rates, and mortgage insurance.

Fixed-Rate vs. Adjustable-Rate Mortgages

Fixed-rate mortgages have a consistent interest rate for the loan’s duration, providing stability and predictable monthly payments. In contrast, adjustable-rate mortgages (ARMs) have an initial fixed-rate period followed by periodic rate adjustments, which may result in lower initial payments but potential rate increases over time.

Mortgage Term: 15-Year vs. 30-Year

The mortgage term plays a crucial role in determining the overall cost of your mortgage. 15-year mortgages typically have lower interest rates and allow for faster equity buildup, but require higher monthly payments. 30-year mortgages offer lower monthly payments, but result in more interest paid over the loan’s lifetime.

Mortgage Insurance Considerations

PMI may be required for conventional loans with less than a 20% down payment. Loans backed by the federal government, such as FHA, VA, or USDA loans, may have different insurance requirements or fees.

Assessing Your Long-Term Goals

When choosing a mortgage option, consider how long you plan to live in the home and whether your financial situation or housing needs may change. Evaluate the potential for home value appreciation and the impact on your future financial goals.

Planning Your Next Steps

Assess Your Financial Situation

The amount of money you choose to put toward a down payment is a personal choice. If you feel ready for homeownership but know that a 20% down payment isn’t feasible for you, there are many options available to help you.

The best place to start is by looking at your monthly budget and seeing what you can realistically afford. Use a mortgage calculator to reverse engineer your goal and find your ideal home purchase. Consider factors like property taxes, insurance, and maintenance costs, as well as any debts you currently have.

Get Pre-Approved

Get pre-approved for a mortgage before you start house hunting. This will give you an idea of how much you can afford, and it will show sellers and real estate agents that you’re a serious buyer.

To get pre-approved, you’ll need to provide your lender with documentation such as pay stubs, bank statements, and tax returns. They’ll then assess your credit score and financial history to determine how much they’re willing to lend you.

Shop Around for the Best Mortgage

Shop around for the best mortgage rates and terms. Don’t just settle for the first lender you come across. Compare different lenders and loan programs to find the best fit for your financial situation. Look for competitive interest rates, low fees, and flexible repayment terms.

Work with a Knowledgeable Real Estate Agent

A good real estate agent can help you find a home that fits your needs and budget. They’ll also guide you through the home buying process, making it less stressful and ensuring you don’t make any costly mistakes.

Attend First-Time Homebuyer Classes

Consider attending first-time homebuyer classes or workshops. Many local organizations and government agencies offer educational resources for first-time homebuyers. These classes can help you understand the ins and outs of the home buying process and give you the knowledge you need to make informed decisions.

Save for Unexpected Expenses

Even if you’re able to buy a home with no money down, it’s a good idea to have some savings set aside for unexpected expenses. These might include moving costs, home repairs, or furnishing your new home.

Build an Emergency Fund

In addition to saving for unexpected expenses, it’s also important to have an emergency fund in place. This should be enough to cover three to six months’ worth of living expenses in case you lose your job or face another financial emergency.

Be Patient and Stay Disciplined

Home buying is a complex process, and it can take time to find the right home and secure financing. Stay focused on your goals, be disciplined with your spending, and remember that homeownership is a long-term investment.

Conclusion

Buying a home with no money down is possible, but it may not be the best choice for everyone. Consider your financial situation, your long-term goals, and the various mortgage options available to you before deciding on a zero down payment mortgage. With careful planning and preparation, you can make your dream of homeownership a reality, even if you don’t have a large down payment saved up.

Source: crediful.com

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Mortgage rates moved higher for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans increased.

After surpassing 8 percent in late October, mortgage rates have somewhat retreated. One big driver: Inflation has cooled, which means the Federal Reserve might end its rate increases. The Fed last hiked its key interest rate in July, which increased borrowing costs on a variety of financial products, including mortgages.

The central bank decided to hold firm at its November meeting, indicating it expects rates to stay on the higher side for the foreseeable future.

“Expectations of slower economic growth, moderating inflation and no more Fed interest rate hikes have been a downward influence on mortgage rates,” says Greg McBride, CFA, chief financial analyst for Bankrate.

The slight decline in mortgage rates comes alongside appreciating home prices. Home values have now climbed for eight months in a row, according to the S&P CoreLogic Case-Shiller index for September 2023.

Rates last updated December 5, 2023.

These rates are Bankrate’s overnight average rates and are based on the assumptions indicated here. Actual rates displayed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, December 5th, 2023 at 7:30 a.m.

30-year mortgage rate moves higher, +7.53%

The average rate for a 30-year fixed mortgage for today is 7.53 percent, up 753 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.83 percent.

At the current average rate, you’ll pay a combined $701.27 per month in principal and interest for every $100,000 you borrow. That’s an increase of $701.27 over what you would have paid last week.

The popular 30-year mortgage has a number of advantages:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower, more affordable payments spread over time.
  • Stability: With a 30-year fixed mortgage, you lock in a set principal and interest payment, making it easier to plan your housing expenses for the long term. Remember: Your monthly housing payment can still change if your homeowners insurance premiums and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you might qualify for a larger loan amountor a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.

Learn more: What is a fixed-rate mortgage and how does it work?

15-year mortgage rate moves up, +6.80%

The average 15-year fixed-mortgage rate is 6.80 percent, up 680 basis points over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $888 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.

5/1 adjustable rate mortgage rises, +6.78%

The average rate on a 5/1 ARM is 6.78 percent, ticking up 678 basis points over the last 7 days.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.78 percent would cost about $651 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo mortgage interest rate trends higher, +7.59%

The average rate for a 30-year jumbo mortgage is 7.59 percent, up 759 basis points since the same time last week. Last month on the 5th, jumbo mortgages’ average rate was higher, at 7.82 percent.

At the current average rate, you’ll pay $705.39 per month in principal and interest for every $100,000 you borrow. That’s $705.39 higher compared with last week.

Mortgage refinance rates

Current 30 year mortgage refinance rate climbs, +7.63%

The average 30-year fixed-refinance rate is 7.63 percent, up 763 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.96 percent.

At the current average rate, you’ll pay $708.14 per month in principal and interest for every $100,000 you borrow. That’s an extra $708.14 compared with last week.

Where are mortgage rates heading?

Mortgage rates have done a 180 as of late, falling back under 8 percent. With inflation cooling and 10-year Treasury yields declining, the 30-year fixed mortgage could head into the 6 percent range by next year, said Lawrence Yun, chief economist of the National Association of Realtors, at the group’s conference in November.

“I believe we’ve already reached the peak in terms of interest rates,” said Yun.

The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What today’s rates mean for your mortgage

While mortgage rates fluctuate considerably,, there is some consensus that we won’t see rates back at 3 percent for some time. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

Well, another year is nearly in the books, which means it’s time to look ahead at what 2024 might have in store.

As is customary, I take a look at mortgage rate predictions from a variety of economists and offer up my own take for the upcoming year.

I also look back at the predictions for the current year to see how everyone did (hint: not well!).

The big story in 2023 was out of control inflation. The story going forward might be cooling inflation.

Though there’s also the risk it resurges, at which point mortgage interest rates could rise again.

Mortgage Rates Are Expected to Go Down in 2024

First let’s talk about the general outlook. Most expect mortgage rates to go down in 2024, which was actually the call in 2023 as well.

But guess what? Everyone was wrong. Expectations that the 30-year fixed would fall back into the 5% range were way off.

Instead, interest rates on the popular loan program surpassed the 8% mark before finally letting up over the past month.

So while many economists are optimistic for the coming year, take note that they felt the same way a year ago. And got it wrong.

But things aren’t exactly the same. The Fed increased its fed funds rate 11 times, which many believe has worked to corral inflation.

And this could lead to weak economic output and rising unemployment, which could result in Fed rate cuts as early as March 2024.

This doesn’t necessarily mean mortgage rates would follow the Fed lower, but it could signal that the worst is behind us.

As such, mortgage rates may have peaked, and it’s possible they could continue to drift lower and find a comfortable medium between their old record lows and recent near-21st century highs.

MBA 2024 Mortgage Rate Predictions

First quarter 2024: 7.1%
Second quarter 2024: 6.6%
Third quarter 2024: 6.3%
Fourth quarter 2024: 6.1%

First up is the Mortgage Bankers Association (MBA), which is often fairly bullish about mortgage rates improving.

They are, after all, fans of mortgages being originated, and lower rates equate to higher funding volume.

Last year, they predicted that the 30-year fixed would ease throughout 2023 and average 5.2% in the fourth quarter.

That didn’t work out as planned, with the 30-year fixed closer to 7% today. And it was actually above 8% just a month ago.

Still, they are predicting lower mortgage rates in 2024, just as they did last year. The difference this time around might the inflation story.

It has cooled a lot since then, which could lead to Fed rate cuts and an easing in the 10-year treasury yield, which correlates well with mortgage rates.

Ultimately, they may have expected inflation to improve faster than it did, which is why they got rates wrong in 2023.

Now that inflation actually is significantly lower, their predictions could come to fruition. Also note that their latest prediction is a full percentage point higher than it was a year ago.

They only expect the 30-year fixed to fall to 6.1% by the end of 2024 versus 5.2% when they made the same forecast a year ago.

Fannie Mae 2024 Mortgage Rate Predictions

First quarter 2024: 7.6%
Second quarter 2024: 7.4%
Third quarter 2024: 7.2%
Fourth quarter 2024: 7.1%

Next up is Fannie Mae, which purchases and securitizes conforming mortgage loans.

They are a lot less bullish than the MBA, as they expect the 30-year fixed to remain in the 7% range for all of 2024.

It’s possible they’ll update their forecast in light of recent improvements in mortgage rates.

But as it stands, they don’t expect the 30-year fixed to drop below 7.10%, which is basically where it’s at now.

So we can take this to mean they expect mortgage rates to remain relatively flat at these new, higher levels for much of 2024.

I will update their numbers if they release a new forecast before the end of 2023.

Freddie Mac 2024 Mortgage Rate Predictions

First quarter 2024: n/a
Second quarter 2024: n/a
Third quarter 2024: n/a
Fourth quarter 2024: n/a

While Freddie Mac stopped releasing a monthly outlook for mortgage rates (for reasons unknown), they still do a monthly commentary.

And from that we can glean some ideas about where they think mortgage rates will go in 2024.

Their latest outlook notes that they expect “recent volatility in Treasury yields to abate which will allow modest reductions in mortgage rates.”

How modest? Well, they said mortgage rates will probably not fall below 6% “in the short run” thanks to the higher for longer narrative.

But given the recent improvement in rates (and the 10-year bond yield), it’s possible rates could get back in the low-6s in 2024.

And if the borrower pays discount points, a rate in the 5% range is also possible, assuming those mortgage rate spreads tighten due to decreased volatility.

A year ago, they expected the 30-year fixed to fall to 6.1% by the fourth quarter of 2023. So perhaps they’re being a bit more conservative.

However, they expect home prices to rise a further 2.6% in 2024 thanks to mortgage rate lock-in effect and favorable demographics, including an elevated share of first-time home buyers.

NAR 2024 Mortgage Rate Outlook

First quarter 2024: 7.5%
Second quarter 2024: 6.9%
Third quarter 2024: 6.5%
Fourth quarter 2024: 6.3%

The National Association of Realtors (NAR) releases a monthly U.S. Economic Outlook that contains their mortgage rate predictions for the year ahead.

I’m going off their October version until I can get a more updated one, so I expect their numbers to get even more optimistic given the recent improvement in mortgage rates.

There’s even a chance they’ll throw out a number in the high-5% range for the fourth quarter of 2024.

NAR chief economist Lawrence Yun also expects the 30-year fixed to average between 6-7% by the spring home buying season.

He added that “we’ve already reached the peak in terms of interest rates.” So his expectation is it’ll get better from here. The question is how much better.

Zillow’s 2024 Mortgage Rate Prediction

Next we have Zillow. Sometimes they make mortgage rate predictions, sometimes they don’t.

Given how wrong everyone has been lately, they said, “Predicting how mortgage rates will move is a nearly impossible task…”

However, they do expect home prices to “hold steady in 2024,” declining by a negligible 0.2%.

They also believe mortgage rates may “hold fairly steady” too in coming months if recent inflation readings are any indication.

Together, the cost of buying a home could level off next year, or even drop if mortgage rates do too. But they aren’t throwing out specific numbers.

Interestingly, Zillow expects more mortgage rate locked-in homeowners to “end their holdout for lower rates and go ahead with those moves.”

So even if rates don’t get much better, the holdouts might say enough is enough and list their properties.

If rates do keep dropping, this argument becomes even more compelling. So much-needed supply could be freed up in the process.

Redfin 2024 Mortgage Rate Predictions

Meanwhile, Redfin believes mortgage rates will steadily decline throughout 2024, but remain above 6%.

Specifically, they expect the average 30-year mortgage rate to linger around 7% in the first quarter, then inch down as the year goes on.

By the end of 2024, the real estate brokerage thinks mortgage rates will fall to about 6.6% thanks in part to 2-3 rate cuts from the Fed.

Offsetting these cuts is the expectation that we will avoid a recession in 2024. So a lack of serious economic pain means more modest declines in rates as opposed to sizable ones.

Still, they see home buyers finally catching a break because home prices are also predicted to be flat.

This means monthly payments will fall further from their recent all-time highs, which we can all agree is a good thing.

Realtor 2024 Mortgage Rate Forecast

Meanwhile, the economists at Realtor.com are predicting a minimal decline in mortgage rates, but still an improvement.

They expect the 30-year fixed to average 6.8% in 2024 after averaging 6.9% in 2023. So just a 10-basis point decrease.

However, they do expect rates to finish off 2024 at 6.5%, which is a little more optimistic.

It’s also markedly better than the 2023 year-end expectation of 7.4%. And would essentially take us back to the end of 2022, when the 30-year fixed averaged 6.42%.

In other words, we might be able to forget 2023 ever happened. But we still won’t be able to revisit early 2022 anytime soon.

At that time, the 30-year fixed was a mindboggling 3.22%.

The Truth’s 2024 Mortgage Rate Predictions

First quarter 2024: 6.875%
Second quarter 2024: 6.625%
Third quarter 2024: 6.25%
Fourth quarter 2024: 5.875%

Like everyone else, I was wrong about mortgage rates in 2023. I thought they’d slowly move lower throughout the year before ending the year around 5%.

Instead, we are closer to 7% today, which is a pretty big miss. That being said, what I assumed would play out last year (lower inflation), seems to be happening now.

There are also several rate cuts now expected in 2024, with the CME FedWatch Tool favoring a 4% – 4.25% range for the federal funds rate by December 2024.

The 10-year bond yield is also expected to moderate further, and could be back to the mid-3% range.

If we assume that mortgage rate spreads also tighten from their current levels near 300 bps to something more reasonable, such as 200 bps, we could see noticeably lower mortgage rates in 2024.

Taken together, a spread of 200 bps and a 3.5% 10-year yield could signal a return to mid-5% mortgage rates.

That might sound a little too good to be true, so I’ll err on the side of caution and go for an average rate as low as 5.875% to end the year.

Remember, there are still a lot of unknowns and potential curveballs ahead. We’ve got multiple geopolitical events that are still unfolding.

And potentially the most contentious U.S. presidential election in history. So as always, mortgage rates will ebb and flow, and opportunities will present themselves.

There will be good months and bad months, but I expect mortgage rates to continue trending lower as 2024 unfolds.

(photo: Marco Verch, CC)

Source: thetruthaboutmortgage.com

Apache is functioning normally

TPO, Subservicing, Marketing, CRA Products; Training and Webinars; Podcast Interview with Dr. Elliot Eisenberg

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TPO, Subservicing, Marketing, CRA Products; Training and Webinars; Podcast Interview with Dr. Elliot Eisenberg

By:
Rob Chrisman

Mon, Dec 4 2023, 10:43 AM

“People would learn more from their mistakes if they weren’t so busy denying them.” Here’s a little trivia for the compliance folks in the coffee room: The CFPB handles 20,000 consumer complaints per week, and given that financing a home, and then servicing the loan, is the largest financial transaction most individuals go through, you gotta figure a chunk of the 20,000 involve mortgages. While we’re on the CFPB, Director Chopra addressed issues related to refinancing in a hearing on Capitol Hill last Thursday. But the headlines have been grabbed by interest rate improvements in our free market economy, and the economics calendar this week will be highlighted by the U.S. jobs report on Friday, arriving just five days before the Federal Reserve’s December 13 meeting. (Expect payrolls growth will rise to 200K in November from 150k job additions in October, and the unemployment rate to stay steady at 3.9 percent.) Today’s podcast can be found here, and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Today’s has a wide-ranging interview with economist Elliot Eisenberg on government spending, the Fed’s balance sheet, and “Eisenbergian Economics.”

Lender and Broker Products, and Services

Servicing transfers are complicated, so it is critically important that you nail down the prep work beforehand. If you don’t, and the servicing transfer goes awry, it’s not only servicers who suffer, their customers do, too. The professional services team at ICE Mortgage Technology break down exactly what’s on the line, and what happens when poorly handled servicing transfers leave customers in a lurch. Read its new blog here to learn just how “high stakes” loan transfers can be, and the steps servicers can take to avoid borrower confusion, retention concerns, and even reputational risk, before they become a problem.

Exclusive data: Maxwell Q3 2023 Mortgage Lending Report reveals trends in interest rates, loan volume, and borrower demographics. Q3 brought continued challenges for home buyers and lenders. Despite 11 Fed rate hikes over the past year and a half, interest rates averaged 7.2 percent in Q3, the highest Maxwell data has recorded within the current market cycle. Still, Maxwell’s new report, which derives insights across more than 300 lenders and $290B in loan volume, shows signs of stabilization in Q3. Motivated borrower groups found creative paths to homeownership despite adversity, flocking to remaining pockets of affordability (hint: West Virginia). For insightful market data along with actionable advice from Maxwell experts on how to form a strong 2024 strategy, click here to get your free copy of Maxwell’s Q3 2023 Mortgage Lending Report.

Community Reinvestment Act (CRA) Final Rule: Preparing Your Bank for CRA Modernization! After years of discussions and false starts, the Federal Reserve, FDIC, and OCC issued their final rule modernizing the Community Reinvestment Act (CRA) in October. The almost 1,500-page final rule will take effect on April 1st, 2024. This means banks must comply with all the rule’s provisions by January 1, 2026 (aside from certain requirements taking effect January 1, 2027). How will CRA modernization impact your bank? What do regulators hope to achieve? What are they looking for from banks? What should your bank do to prepare? In this new article, experts from Ncontracts discuss this and more, plus offer insights on how the right resources can ease these regulatory burdens. Read the full article for more information.

Variety is the spice of life, which is why ICE maintains an ever-growing library of multimedia marketing content with its Surefire℠ CRM and Mortgage Marketing Engine. Intelligently automated Blueprints for Success give lenders a leg up with effective marketing workflows without the hassles of A/B testing and complex configuration. Whether a lender launches our Blueprints for Success out-of-the-box or configures them to meet unique goals, these automated campaigns help nurture relationships, improve pull-through and power sales across the entire homeownership lifecycle. Explore how Surefire can power your sales strategy in 2024 and schedule a demo with the ICE team today.

Delinquencies have remained statistically low, but recent market data indicates an uptick in early-stage delinquencies, unemployment, and more Americans relying on credit to make ends meet, so that rate may continue to rise. Computershare Loan Services (CLS) is a highly rated subservicer that can take the heavy lifting of managing high-risk loans off your shoulders. All its services (originations fulfillment, co-issue MSR acquisition, subservicing, and its mortgage cooperative) help keep lenders one step ahead. In this industry, you deserve a partner that has it all. Contact CLS to find out how they can help you reach your goals, in any market.

Broker and Correspondent Programs

Give Your Pipeline a Boost this December with LoanStream’s Winter Specials on Non-QM and Prime! Purchase, Rate/Term & Refi Cash-Out on both. Non-QM, 50bps >65% to <= 75% LTV & 720+ FICO, 75bps >55% to <= 65% LTV & 720+ FICO, 100bps <= 55% LTV & 720+ FICO. These are only here for a limited time so take advantage and Contact your Account Executive for details. For loans locked 12/1/2023 through 12/31/2023. Restrictions apply. Interested in getting approved? Visit our Get Approved page now: Get Approved LoanStream Wholesale – Wholesale Mortgage Lending.

With the holiday season underway, Rocket Pro TPO is kicking off its December to Remember campaign by introducing a series of exciting and valuable wins throughout the month of December to celebrate and support Rocket Pro’s broker partners. On Friday, the first win was introduced: a 25 bps LLPA on 30-year fixed rate conforming VA loans that will be available all month. Check out this video message from EVP Mike Fawaz. And, today, Rocket Pro’s highly popular Fast 15 Loan Guarantee is back now through January 31st! This special offer for brokers guarantees that all eligible loans will be clear to close in 15 business days or they will pay your client $2,500. For correspondent partners, they guarantee that eligible loans will be clear to close in 15 business days, or they will waive the $999 acquisition fee. Requirements and rules apply. Partners are encouraged to watch their inboxes and Rocket Pro TPO’s social media channels for more wins to come. Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

Events, Training, and Webinars in December

TOP CEOs DISCUSS WINNING STRATEGIES FOR THE 2024-25 MORTGAGE CYCLE. Tomorrow, 12/5, at 2 PM ET, tune into HousingWire as Sagent CEO Dan Sogorka digs into this topic with industry leader Mark O’Donovan (Chase), moderated by Julian Hebron of The Basis Point. These 3 mortgage experts will uncover how lenders can thrive through 2025 and beyond, discussing vital topics such as navigating homebuyer affordability, lender priorities, FHFA, CFPB insights, and more. Don’t miss this powerhouse session! Register here to refine your strategies for the upcoming year or catch the recording if you can’t attend live.

A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future.

Tomorrow, 12/5, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. Tune in every Tuesday at 1PM ET to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode. This week’s guest is Kayla Gatmaitan, and education-focused LO for first time homebuyers.

If business is slow and you’re looking for new opportunities, register for MBA Eastern Pennsylvania’s upcoming free session with Freddie Mac on Tuesday, December 5 at 11:00 a.m. One of the challenges homebuyers face in today’s market is saving for the down payment. In this session, the benefits and differences between two low down-payment offerings, Home Possible® and HomeOne® will be explored. Additionally, the session will cover Freddie Mac BorrowSmart AccessSM, a program that offers up to $3,000 in down payment and closing cost assistance to help your clients reach homeownership.

The title industry faces many challenges going into 2024 and October Research wants to help you prepare your business. Orrick Partner Sherry-Maria Safchuk and CATIC SVP and National Agency Manager Kyle Rank will share their expertise and address critical issues such as consumer protection, cybersecurity trends, remote online notarizations, updates on the 1033 rule and more on the latest Industry and Regulatory Outlook webinar Dec. 5th. Stay ahead of the competition and start the new year strong. Register today at DoddFrankUpdate.com.

2023 Financial Institutions Professionals Webinar Series, presented by the Bonadio Group, December 5th, 6th, and 7th at 8:00 PST. During this complimentary event, industry experts will discuss emerging issues, impacts, insights, & more. Create your own personal agenda by choosing from several sessions, each designed as a roadmap to help you navigate what’s to come in the ever-changing financial services landscape. Each session offers 1 (one) credit of CPE.

Wednesday the 6th, looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. This week’s guest is Mark Jones, President of Union Home Mortgage and Chairman of the MBA.

Join MBA St. Louis at St. Charles Realtors, Wednesday, December 6th, 8:00 am – 10:30 am, and test your knowledge on Conventional Loans. This engaging and interactive course led by Trainer MaryKay Scully, Enact MI’s Director of Customer Education will review the key areas of Credit, Income, Collateral, Liabilities, Assets, HomeReady and Home Possible. It will inform and engage participants. Assessing knowledge, while reviewing Fannie Mae and Freddie Mac guidelines, as well as Desktop Underwriter and Loan Product Adviser. Cost: $20 (covers light snacks and room rental).

Freddie Mac added enhancements to its HFA Advantage® mortgage offering, providing a competitive solution for housing professionals to consider for first-time and repeat homebuyers. In a free webinar, Thursday, December 7th, 2 p.m. – 3:30 p.m. ET, you’ll learn more about HFA Advantage’s features and benefits, eligibility and homebuyer education requirements and new product enhancements.

With a residential real estate market that continues to change and evolve, WMBA has gathered industry professionals that offer different perspectives to give real insight into “Build for Rent” model, an increasing popular approach to residential new construction being built and held as rental properties. Join WMBA for the Income Property Luncheons on Thursday, December 7th, In Person Attendees: 11:30-1:00pm, Virtual Attendees: 12:00pm-1:00pm.

Join Angel Oak Mortgage on Thursday, December 7 at 10:00 PST for a webinar detailing its Investor Cash Flow (DSCR) programs and cover the top 20 broker questions. Learn how easily these loans close and help add to the bottom line.

Success leaves clues. Not surprisingly, many of the traits shared by high achievers are common sense in theory, but not necessarily common practice (otherwise, everyone would be a high achiever, right?). Discover the keys to having your best year ever, the most important (yet often missing) part of the formula for success and disciplines you often don’t think about. Join Hannah J. Barton and Blaine Rada, CSP, to discover these habits and incorporate them into your own life. TMBA Webinar, Habits of High Achievers, Thursday, December 7 at 11:00 am – 12:00 pm.

Join LSEG Academy session Central Bank & Bond market outlook – Insight from IFR Markets,

Thursday, December 7th | 8:00 PST., as industry experts examine recent benchmark interest rate increases and likely changes to the direction of central banks’ monetary policies. They will also look at the commentary and insight provided by IFR Markets and showcase how benchmark rates have been impacting the bond and rates markets utilizing LSEG Workspace tools. The discussion will include expectations for interest rate moves in 2024 and provide an opportunity to ask questions to industry experts.

Friday, December 8, is the next episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Listen to Rich Kuegler with Stewart Title!

Capital Markets

As mortgage rates dropped for the fifth consecutive week last week, Federal Reserve Chair Powell said that any speculation of potential rate cuts is still “premature.” Yes, inflation is easing, and the U.S. economy is cooling with Fed policy now well into restrictive territory. The full effect of higher rates is still working its way through the economy and the central bank has noted progress against inflation over the past six months. The hiking cycle is likely over, but the Fed is reluctant to admit as much or discuss any sort of rate cuts.

Economic data over the last week continued to show the U.S. economy is still expanding while inflation trends lower. Real GDP was revised up to 5.2 percent in the second update from 4.9 percent in the advance update. Consumer spending on services increased 0.2 percent in October and spending on nondurable goods increased 0.3 percent. The October PCE deflator was unchanged in October and showed prices were 3.0 percent higher than twelve months ago; the lowest annual reading since March 2021. While prices are still rising faster than the Fed’s preferred rate, the pace continues to slow and bodes well for a soft landing for the U.S. economy.

This can also be seen in housing prices which rose 0.7 percent in September and 3.9 percent from one year ago, according to the S&P CoreLogic Case-Shiller Home Price Index. While elevated mortgage rates helped the slowdown, limited available for sale inventory has kept prices from outright declines. As a result of the continued progress on inflation and recent Fed comments around being well into restrictive territory, the markets expect the Fed is done hiking and will begin to cut rates in 2024.

This week’s economic calendar contains several higher tiered releases including the November payrolls report and preliminary December consumer sentiment on Friday. Between now and then, we will receive ISM Services for November, some labor market indicators, wholesale trade, and consumer credit. The week kicks off with just factory orders for October, due out later this morning. We begin Monday with Agency MBS prices roughly unchanged from Friday evening, the 10-year yielding 4.25 after closing last week at 4.23 percent, and the 2-year at 4.61.

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Pending home sales in October fell to their lowest level since 2001. As mortgage rates edged near multi-decade highs, pending home sales declined 1.5% in October on a month-over-month basis, according to data released Thursday by the National Association of Realtors (NAR). As a result, NAR’s Pending Home Sales Index fell to a reading of 71.4, down from 72.6 in September. 

Regionally, the Northeast posted a monthly gain in transactions, but the Midwest, South and West all posted losses. Year over year, all four regions saw a drop in transactions.

Historically high rates harmed the housing market in October

Annualized existing home sales remained below 4 million in October, the lowest rate since 2010. Meanwhile, new home sales posted a better performance as homebuyers pivoted to new construction amid waning existing home supply. New home sales fell 5.6% in October on a month-over-month basis but remained 17.7% above the previous year’s level. 

In today’s tough housing market, the rental market is cooling off,  giving some relief to homebuyers. The national median rent price fell again in October to $1,729, down from $1,747 in September. It dropped on an annual basis for the sixth consecutive month

NAR chief economist Lawrence Yun is optimistic that declining mortgage rates will help qualify more home buyers in the months ahead, but limited housing inventory will remain the sticking point.

“Multiple offers, of course, yield only one winner, with the rest left to continue their search,” he said in a statement. 

Home sales should perform better in 2024 even if affordability remains a challenge

According to Bright MLS’s forecast, mortgage rates will continue to trend downward in 2024, finishing the year at 6.2%. Existing-home sales and housing inventory will increase next year, and home prices will remain stable, said Lisa Sturtevant, the MLS’s chief economist.

Source: housingwire.com

Apache is functioning normally

“This case has now been pending for more than four and a half years, and we’re ready to move forward and towards trial,” he said on the call.

Ethan Glass of Cooley, an attorney for the National Association of Realtors (NAR), took a different view and urged Wood to not set a date just yet, stating that it is “way premature” as the court has yet to even take motions for summary judgment, “let alone decide them.”

Glass also asked if NAR could let the court know in a week or so if the trade group would like the court to extend its Dec. 19, 2023, deadline for submitting things like motions for summary judgment.

“We are still analyzing what the consequences of the [Sitzer/Burnett] jury verdict are,” Glass said.

A final ruling on the Sitzer/Burnett suit is not expected until April or May 2024, however, the plaintiff’s motion for injunctive relief must be filed before Jan. 8, 2024. The three defendants who were present at the trial, NAR, Keller Williams and HomeServices of America, have all vowed to appeal the verdict.

Glass added that NAR is unsure if there may or may not be reasons to extend the deadline, as the trade group and its counsel are still looking into things.

Braun argued that legal issues still playing out in the Sitzer/Burnett suit was not a reason to delay the trial in the Moehrl case.

Surprisingly, this view was supported by Timothy Ray of Holland & Knight, who is representing Keller Williams. Ray stated that he believes there were “serious errors” in the Sitzer/Burnett trial and that that trial should not be held up as a “standard for how we should go forward in Moehrl.” He added that Keller Williams would like to see the “Moehrl case to stand on its own consistent with the law” in its district and circuit.

Wood agreed with Ray’s view, stating: “I don’t think the fact that the other case has proceeded to trial and there are certain legal issues that will be challenged post-trial … affects what I need to do to keep the case moving here. It is a different case with some different issues, some overlapping issues, in a different circuit. So, I tend to agree with Mr. Ray’s point that this case should stand on its own.”

Looking ahead, Wood said she thought setting a trial date as soon as “it’s reasonable to do so makes sense.”

In the meantime, the parties have until Jan. 22, 2024, to submit a joint state report, in which they are to estimate the number of trial days and testimony hours they anticipate needing. Wood also instructed that the parties should take into account that Anywhere and RE/MAX are unlikely to participate in the trial if their settlements receive final court approval.

Filed in 2019, the Moehrl lawsuit, like the other commission lawsuits, take’s aim at NAR’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to buyers’ brokers in order to list a property on the MLS.

The home seller plaintiffs allege that NAR and the corporate brokerage defendants have conspired to artificially inflate agent commissions, increasing the costs shouldered by home sellers. The suit received class-action status in March 2023.

Source: housingwire.com