Category — mortgage

Freddie Mac, the government-run mortgage agency that surveys the market each week, announced that mortgage rates fell again this week…continuing to set record lows. 

The average price of a 30-year mortgage dropped to 4.42% from 4.44%.  This time last year, the mortgage rate was 5.12%, which was low at the time.

Amazingly, you can get a 15-year fixed-rate loan for under 4% — 3.90% this week, which is down from last week’s rate of 3.92%. This time last year, the same loan cost 4.56%.

Mortgage rates fell to a record low for the fourth time in five weeks.   The average rate for 30-year fixed loans this week is 4.56 percent, down from 4.57 last week. That’s the lowest since Freddie Mac began tracking rates in 1971.

Freddie Mac reported this morning that interest rates on 30-year fixed-rate mortgages averaged 4.57 percent this week. That’s down a hundredth of a percentage point from last week’s average rate, which was already at record lows.   Freddie Mac has been tracking 30-year-fixed-rate mortgages for 39 years, and the past three weeks have shown record-setting lows for the most popular type of home loan.

 Late last night, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline.

Known as the “Homebuyers Assistance and Improvement Act of 2010,” the bill was passed by unanimous consent. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.

This legislation is designed to create a seamless extension, and the new closing deadline for eligible home sale transactions is now September 30, 2010. There will not be any gap between June 30 and the date the President signs the bill into law.

Last week, mortgage rates fell to the lowest level on record. 

Mortgage company Freddie Mac said on Thursday June 24 that the average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent the previous week.

This is the lowest since rate on 30-year fixed mortgages we’ve seen since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December 2009.

Rates for 15-year and five-year mortgages also hit lows. Rates on 15-year, fixed-rate mortgages fell to an average of 4.13 percent, the lowest on records dating to September 1991 and down from 4.2 percent a week earlier.  Rates on five-year, adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac’s records, which only date back to January 2005.

Mortgage rates are low, and it seems they will be staying that way for a while.  In fact, they are two one-hundredths of a percentage point away from the rates of 1956…that’s 54 years!

The average rate for a 30-year fixed-rate mortgage is within one one-hundredth of a percentage point of the 4.71% reported the week ending December 3, 2009, and if rates decline two one-hundredths of a percentage point, we’re back to the spring of 1956, when the average rate hit 4.68%, according to National Bureau of Economic Research statistics.

Rates for 15-year mortgages fell for the fourth straight week, to 4.17%, the lowest rate since Freddie Mac started tracking 15-year loans in 1991.

In addition to low mortgage rates, according to a recent BankRate.com article, some lenders are beginning to loosen their requirements for down payments.  The article discusses four types of mortgages that require small down payments, some with zero down options.  While these mortgages may have limited availability, they could be a sign of what’s to come.

Is it tougher for buyers to secure mortgage money?

• Mortgage funding remains available for consumers who meet the classic lending standards – including proof of income and solid credit.
• The reasons that most people purchase a home are overwhelmingly lifestyle-driven – from having a baby or getting married, to moving to a smaller home after retirement.  These types of lifestyle changes occur year-in and year-out, in every kind of market.  So even despite the headlines focused on economic issues, we will continue to see people buy and sell homes

Real estate prices in the Case-Shiller 10-city index have dropped 30% from the peak in 2005.  Declines this steep have not been seen since the great depression.  Mortgage rates have also declined and this along with current  prices are a great combination for buyers. 

According to expert studies, there has not been better deals with mortgage/pricing since the early 90s.  If you buy an average home today, and take out a 30-year mortgage at 5%, the annual bill for interest and repayment of principal will come to about 19 times typical weekly earnings (If you get the $8,000 refundable tax credit too, it drops below 18 times). As you can see from the bottom chart, we haven’t seen it that low since the early 1970s. In his article Latest Home Price Data Is Good News for Buyers, Brett Arends states that, “The Case-Shiller 10-city data go back to 1987. I ran the numbers comparing the index values, mortgage rates and average weekly earnings. Net conclusion: On average–an important point I’ll return to shortly–buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal. No, the Case-Shiller data aren’t perfect. The biggest complaint is that they are weighted too much towards the coasts and the big “bubble” cities like Miami, Las Vegas and Phoenix. So I decided to run the same analyses–average prices, mortgage rates and weekly earnings–for the home price data tracked by the U.S. Census. Those numbers go back further than Case-Shiller, to 1972. “ The charts below represent Arend’s study:

The Obama Administration set guidelines for financially troubled borrowers to sell their homes last week.  The government created these guidelines to encourage the use of short sales. 

To put it simply using a definition from the Wall Street Journal, a short sale is a transactions in which the borrower with lender approval sells the home for less than what is owed on the loan. Short Sales are often less damaging to a neighborhood’s property values than a foreclosure would be.  The program makes it easier for borrowers to voluntarily transfer ownership of properties through a “deed in lieu” of foreclosure. 

This plan will award borrowers $1500 from the government if they sell their home for less than they owe on it.  This is the newest addition to Obama’s $75 billion foreclosure prevention plan. 

Call 252-261-3800 or email sales@seasiderealty.com to speak with a short sales specialist.

Freddie Mac has recently released the results of the Primary Mortgage Survey that shows the 30-year fixed mortgage average at 5.14%.  At this time last year, the 30 year fixed mortgage averaged 6.4%.  The 15-year mortgage average for this week averaged 4.58%, and last year the 15-year was at 5.93%.  Five year adjustable rate mortgage averaged 4.67%, which has also been steadily decreasing.

“Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market,” said Frank Nothaft, Freddie Mac vice president and chief economist.  

Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.  Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported.  The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993.  In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency’s purchase-only house price index.