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Mortgage Volume in 2020 Set to Break All-Time Records!

According to Fannie Mae, mortgage volume in 2020 will most likely reach an all-time high of $3.9 trillion.  Refinance volume will make up an astounding $2.4 trillion of that record setting number, which is the highest level since 2003, and more than double the volume of 2019.   Sales of existing homes continue to rise, increasing 25% in July from June, to a seasonally-adjusted $5.86 million.  This number represents the highest level since 2006.  In addition, the average home price in July increased to $304,100, which is up 8.5% from a year ago.

Fannie Mae went on to state, “We continue to believe that a low-rate environment will support refinance demand over the forecast horizon.”   They also believe that interest rates may actually go lower in 2021.  Their reports indicate that 69% of outstanding first lien mortgages can still benefit by at least a half percent in interest rate.   Overall, housing data from a multitude of sources over the past few months indicates that the strong housing market is a major component driving the economy at this time. 

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.

Sources:

https://bit.ly/2REpi8a

https://bit.ly/33Dfe4Q


Housing Demand is Extremely Hot

Last week Redfin, a real estate brokerage, reported that for the fourth consecutive month, over half of Redfin home offers faced a bidding war.  Competition was strongest in coastal areas like in San Diego where a whopping 65% of offers had a bidding war. 

Redfin Chief Economist Daryl Fairweather said, “The pandemic-driven trend of people moving away from densely packed cities toward more affordable and spacious regions means homes in places like Sacramento and Phoenix are becoming nearly as competitive as the Bay Area.”  He also said, “Low mortgage rates are motivating homebuyers who are thinking of moving to go through with it. I expect competition to continue picking up in more affordable parts of the country.”  Also noted in this report was that bidding wars occurred mostly in single family homes followed by townhomes and then condos.

Some more interesting data by way of the National Association of Realtors (NAR) showed that 68% of 597,000 existing home sales in July were on the market for less than 30 days.  On top of that, first-time home buyers made up more than one third of these sales.

It is evident that the housing market has remained scorching hot and will continue to be as long as demand for homes continues to be as strong as it is currently.

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.

Sources:

https://bit.ly/2FcEzdT

https://bit.ly/2ZtHd5M


Federal Reserve Aims to Keep Inflation Low

 

In an attempt to boost the economy as it rebounds from the Coronavirus crisis, the Federal Reserve announced that it aims to keep inflation low for an extended period of time.  So what does that mean? Basically, the cost to borrow money should remain extremely cheap.  Low inflation equals lower mortgage rates.  Mortgage rates are expected to stay near record lows, with the idea of future rate hikes pushed further down the road.  Greg McBride, Chief Financial Officer for Bankrate, echoed that sentiment, “From an interest rate standpoint, this means lower for longer, and lower more often.”

In addition to low mortgage rates, low inflation will also have a positive effect on variable rates tied to credit cards and Home Equity Lines of Credit (HELOCs).  According to Bankrate.com, the average credit card rates are now at a low of 16.03%, with the average rate for HELOCs 4.79%.  Overall, the goal of keeping inflation low is to encourage the public to spend more and support the economy. 

Sources: https://cnb.cx/2Z3ywif

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.


The Housing Market Continues to Strengthen

The Federal Housing Finance Agency (FHFA) recently released their House Price Index, and it showed that homes appreciated by 5.7% since this time last year and by 0.9% from May to June.  This report contains collected data based on single-family homes which are mortgaged with conforming limits.

Following a blockbuster 24.7% increase in July closings shown in the Existing Home Sales report, New Home Sales were up 14% in July and up 36% since this time last year.  These numbers came in much stronger than expected and again were impressive numbers.  New Home Sales measure newly signed contracts on newly built homes.   Median pricing on newly constructed homes increased by 7.2% for the year to about 330,000. Also, there were only about 299,000 homes for sale at the end of June, solidifying the fact that inventories continue to be super low.  

With these ultra-low inventories and very high levels of demand, the housing market is continuing to break records and continuing to appreciate.  Historically-low interest rates are aiding consumers with affordability, with rates acting as a counter balance to the higher home prices. The super low rates are also helping many homeowners refinance where it makes sense.

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.

Sources: 

https://bit.ly/3f4R6fl

http://bit.ly/2MJU6mf

http://bit.ly/2sq38xg

 


July Home Sales and Prices Spike to Record Highs!

According to the National Association of Realtors (NAR), sales of existing homes spiked 24.7% from June to July.  This record surge represents the strongest monthly gain in the history of the survey, going back to 1968.  In addition, it’s the highest sales pace since December of 2006.  With interest rates remaining historically low, buyers are extremely eager to purchase right now.  The only thing holding them back appears to be the supply of homes on the market, which has dropped 21.1% annually.

Also hitting record highs is the median home price, which rose 8.5% annually in July to $304,100.  This value represents the highest nominal price on record, and also warrants the highest price when adjusted for inflation.  When adjusted for inflation, the median home price is 3.4% higher than the bubble high set in 2006.  As with record existing home sales, low interest rates are a big catalyst in driving up home prices, due to the fact the low rates represent more purchasing power for home buyers allowing them to purchase higher priced homes with a lower payment.

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.

Sources: https://cnb.cx/34o6m5k


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