September 26, 2013 • 4:10 pm 0
September 3, 2013 • 4:15 pm 0
At the beginning of May the average mortgage rate for a 30-year FRM was just 3.35 percent. Since then, as tracked by weekly surveys from Freddie Mac, rates have risen aggressively, and as of August 22, the average rate on that same 30-year FRM was 4.58 percent.
Much of the mortgage-rate discussion thus has dealt with numbers, specifically, how much homes sales will be impacted. So for this story, we wanted to take a look at some broader market forces, and how the rising mortgage rates could impact those elements.
1. Housing demand could fall – There are two sides to the housing demand element, both very interesting. On one hand, consumers buy homes with the future in mind, so if mortgage rates appear to be rising, consumers may be incentivized to buy now before rates get any higher. On the other hand, though, the speed in which rates increase also matters, and if rates rise too quickly (as they have the last couple months), they could scare buyers away.
2. New buyers will not arrive – Falling mortgage rates entice many consumers to consider homebuying, but there’s little evidence that rising interest rates have the same effect. Again, consumers who were already considering homeownership may expedite their purchase to lock in low rates, but the renter with no interest in homebuying will not likely follow suit.
3. Rising rates are bad for the high-end and low-end – Both entry-level and affluent homebuyers are most affected by rising mortgage rates. Whereas first-time homebuyers are priced out by rising rates, move-up buyers who were considering homes in the $1 to $2 million range may forgo a new purchase and decide to renovate their existing residence instead. According to a recent analysis by the Wall Street Journal, the monthly payment on homes with a 10 percent downpayment has gone up by 13 percent with the rate increases.
4. Investors are in a quagmire – Though many investors, noted the Journal, may be excited by the rate increases, given that they eliminate many potential competitors by making home purchases more costly, some may also be turned off by the increases, especially with how difficult it has now become to find the ridiculous bargains of 2009 and 2010.
5. The housing rebound will not end – Some spectators have feared that the rising mortgage rates will prematurely end the housing rebound, but that will only happen if rates continue to rise at their mid-summer pace, which is unlikely. Instead, what we’ll probably see is a slowdown of home prices, and a return to the steady, consistent growth that has typically categorized the housing market.
by Peter Ricci
– See more at: http://chicagoagentmagazine.com/5-possible-outcomes-of-higher-mortgage-rates/#sthash.kDJtV7q9.BBxHIOeE.dpuf
Filed under: Housing Market, Alex Romo, average mortgage, business, economy, fha mortgage, first time homebuyers, housing affordability, Housing Market, Mortgage, Mortgage rates, Mortgages, Real Estate, residential mortgage, rising interest rates, The Federal Savings Bank
June 3, 2013 • 9:44 am 0
According to the Home Price Index, the United States housing market had a strong first quarter in 2013, showing signs of growth the last 21 consecutive months. Additionally, home values have also increased approximately 7% from last year nationwide due to buyer demand and low mortgage rates. Home values have grown around 2% between January 2013 and March 2013, and many experts expect the growth to continue over time. More here
Filed under: Housing Market, Alex Romo, Alexander Romo, business, buyer demand, economy, fha, home price index, low mortgage, Mortgages, Real Estate, The Federal Savings Bank
April 2, 2013 • 5:28 pm 0
According to the S&P/Case-Shiller Home Price Indices, home prices grew impressively in January. The 20-city home price index grew by 8.1% from January 2012-January 2013. S&P Dow Jones chairman of the Index Committee David M. Blitzer said, “economic data continue to support the housing recovery.” Blitzer also stated ““single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25 percent year-over-year.” More here
Filed under: Housing Market, Alex Romo, Alex Romo Report, Alexander Romo, business, down payment, economy, fha, Foreclosure, foreclosures, home price index, homes, Real Estate, single family
April 1, 2013 • 12:53 pm 0
There are many factors taken into account when thinking of purchasing that dream home.
According to studies, home purchases have increased substantially in the last 12 months.
In many areas, it is now cheaper to own a home than it is to rent. read more
Rates are at an all time low but we know this will not last. I already have witnessed an increase in rates and tightening in credit qualifications
the last couple months. So, if you’re even thinking of buying in the near future, call me today!
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Filed under: Housing Market, Alex Romo, Alexander Romo, closing cost credit, credit, dream home, economy, Home, Home Purchase, homebuying, homeownership, Rates, Real Estate, The Federal Savings
March 31, 2013 • 12:27 pm 0
The current United States’ economic outlook has grown this year, and according to the Organization for Economic Cooperation and Development, the economy is expected to grow by 3.5% by the end of the year’s first quarter. The housing market recovery has played a pivotal role in aiding the economy’s growth. The OECD said, “monetary easing appears to be feeding through to the real economy as household consumption has picked up and the housing sector has begun to rebound.” More here
Filed under: Housing Market, Alex Romo, Alexander Romo, business, Chicago, fha, Housing Market, Mortgage, Real Estate, The Federal Savings Bank
February 10, 2013 • 2:48 pm 0
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Filed under: Housing Market, Alex Romo, Alex Romo Report, Alexander Romo, Chicago, economy, existing home sales, fha, fha mortgage, FHA Refinance, FHA Streamline refinance, fixed rate mortgages, homebuyer tax credit, Housing Market, Morgage Advice, national association of realtors, Pending home sales, Real Estate, residential mortgage, The Federal Savings Bank, year fixed rate mortgages
November 23, 2012 • 3:32 pm 0
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Filed under: Mortgage Advice, Alex Romo, Alexander Romo, business, Closing costs, credit consultation, economy, fha mortgage, FHA Refinance, FHA Streamline refinance, Housing Market, mortgage lates, No Appraisal, No Income, Real Estate, The Federal Savings Bank
October 29, 2012 • 3:25 pm 0
The National Association of Realtor’s Pending Home Sales Index measures contract signings and is an indicator of future existing-home sales. In September, the index was up 0.3 percent over August and 14.5 percent above last year’s level. It was the 17th consecutive month of year-over-year improvement. Lawrence Yun, NAR’s chief economist, said home contract activity remains at an elevated level when compared to recent years and should continue its upward trend in 2013. Pending home sales were up in every region of the country and are showing double-digit increases over last year in the Northeast, South, and Midwest. According to the NAR, existing-home sales should close 2012 at 4.6 million, which is an increase of 9.0 percent over 2011. More here and here.
Filed under: Housing Market, 6 million, activity, Alex Romo, Alexander Romo, association, business, Chicago, chief economist, contract activity, contract signings, digit increases, economy, existing home sales, Home, home contract, Housing Market, Illinois, index measures, indicator, level, midwest, Mortgage, nar, pending home sales index, percent, Real Estate, realtor, region, Sales, South, The Federal Savings Bank, upward trend, Year
August 21, 2012 • 4:01 pm 0
Nearly 74 percent of all new and existing homes sold during the second quarter of this year were affordable to a family earning the national median income of $65,000, according to the National Association of Home Builders Housing Opportunity Index. But though that’s high by historical standards, it’s down from a record 77.5 percent of homes during the first quarter. Barry Rutenberg, NAHB’s chairman, said the decline in affordability is a positive development because it’s another signal that the housing recovery is taking root, which should lend confidence to buyers and sellers in the current market. In 92 percent of the metros covered by the index, prices were up from the first quarter of this year. The most affordable major housing markets during the second quarter included Youngstown and Dayton, Ohio; Buffalo, N.Y.; Indianapolis, Ind.; and Modesto, Calif. More here and here.
Filed under: Housing Market, affordability, business, buyers and sellers, Chicago, current market, dayton ohio, economy, Housing Market, Illinois, index prices, Mortgage, nahb, national association of home builders, national median income, opportunity index, Real Estate, rutenberg, taking root, The Federal Savings Bank, transportation, youngstown
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