by Keeping Current Matters

According to the latest FreddieMac Quarterly Forecast, mortgage interest rates have fallen to historically low levels this spring and they’re projected to remain low. This means there’s a huge incentive for buyers who are ready to purchase. And homeowners looking for eager buyers can take advantage of this opportune time to sell as well.

There’s a very positive outlook on interest rates going forward, as the projections from the FreddieMac report indicate continued lows into 2021:

“Going forward, we forecast the 30-year fixed-rate mortgage to remain low, falling to a yearly average of 3.4% in 2020 and 3.2% in 2021.”

 With mortgage rates hovering at such compelling places, ongoing buyer interest is bound to keep driving the housing market forward. Rates also reached another record low last week, so homebuyers are in . . .

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by Keeping Current Matters

With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the busy spring real estate season is shifting into the summer. In 2020, summer is the new spring for real estate.

Joel Kan, Economist at The Mortgage Bankers Association (MBA) notes:

“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks…Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”

Additionally, according to Google Trends, which scores search terms . . .

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by Keeping Current Matters

Spring is right around the corner, so flowers are starting to bloom, and many potential homebuyers are getting ready to step into the market. If you’re thinking of buying this season, here’s how mortgage interest rates are working in your favor.

Freddie Mac explains:

“If you’re in the market to buy a home, today’s average mortgage rates are something to celebrate compared to almost any year since 1971…

Mortgage rates change frequently. Over the last 45 years, they have ranged from a high of 18.63% (1981) to a low of 3.31% (2012). While it’s not likely that the average 30-year fixed mortgage rate will return to its record low, the current average rate of 3.45% is pretty close — all to your advantage.”

To put this in perspective, the following chart from the same article shows how average mortgage . . .

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by Keeping Current Matters

The current housing landscape presents greater home values, low interest rates, and high buyer demand. All of these factors point to the strong market forecasted to continue throughout the rest of the year.

There is, however, one thing that may cause the industry to tap the brakes: an overall lack of housing inventory. Buyer demand naturally increases during the summer months, but the current supply is not keeping up.

Here is a look at what a few industry experts have to say:

Lawrence Yun, Chief Economist at National Association of Realtors

“Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices.”

Mark Fleming, Chief Economist of First American

“Market conditions are ripe for increasing home . . .

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by Keeping Current Matters

We’re halfway through the year, and with a decline in interest rates as well as home price and wage appreciation, many are wondering what the experts predict for the second half of 2019.

Here’s what some have to say:

Danielle Hale, Chief Economist at realtor.com

“Lower mortgage rates, higher wages and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”

“Our outlook implies 4% growth for the remaining months of the year, predicated on…more supply than last year, the decline in mortgage rates, moderating home price appreciation and improving affordability.”

Lawrence Yun, Chief Economist at NAR

“Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good . . .

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by Keeping Current Matters

A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet.

The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown.

1. Interest Rates

One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In our recent post we posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates.

2. Building Materials

Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home . . .

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by Keeping Current Matters

As we kick off the new year, many families have made resolutions to enter the housing market in 2019. Whether you are thinking of finally ditching your landlord and buying your first home or selling your starter house to move into your forever home, there are two pieces of the real estate puzzle you need to watch carefully: interest rates & inventory.

Interest Rates

Mortgage interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. Despite the recent drop, interest rates are projected to reach 5% in 2019.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also . . .

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by Keeping Current Matters

The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a look at a historical view of interest rates over the last 45 years.

Bottom Line

Be . . .

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by Keeping Current Matters

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.

For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.

NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,

“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”

Let’s take a deeper look:Interest . . .

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by Keeping Current Matters

Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which . . .

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