The Treasury Department on Tuesday issued final regulations that will officially prohibit high-tax states from utilizing workarounds to evade the new cap on state and local tax (SALT) deductions.
As part of the Tax Cuts and Jobs Act, SALT deductions were capped at $10,000 – which is well below the average amounts claimed by individuals residing in states such as New York, California and New Jersey. The average deduction claimed in California, for example, is $22,000, according to Kevin de Leon, a Democratic member of the California state senate.
Therefore, in response, a number of state governments proposed or enacted legislation that would allow taxpayers to make charitable contributions to an established state fund in order to earn a credit. The goal would be to allow the residents to take the full amount given as a deduction by transforming a non-deductible payment into a charitable contribution.
However, the IRS blocked that strategy through guidelines issued on Tuesday, which require taxpayers to subtract the value of their state and local tax deductions from their charitable contributions.
The regulations also provide exceptions for state tax deductions and tax credits of no more than 15 percent of the amount of the donation.
The regulations apply to contributions made after Aug. 27, 2018.C
Treasury Secretary Steven Mnuchin said in 2017 that he hoped it sent a message to state governments that “they should try to get their budgets in line.”
Meanwhile, Democrats have said they would try to undo the cap on state and local tax deductions. New York Gov. Andrew Cuomo has said the new tax change would lead to a decline in revenues in the state because taxpayers would leave.
The Treasury said it would continue to evaluate the issue and release further guidance if necessary.
Mortgage rates have steadily declined with the 30-year fixed-rate bottoming out to 3.82 percent, its lowest level since September 2017, according to the latest figures from Freddie Mac.
Digital Risk co-founder Jeff Taylor told FOX Business’ Neil Cavuto that now is the time for new home buyers to take advantage of the bigger inventory on the market.
“If you’re looking to get into the housing market, i.e., you don’t have a house right now, this is literally the perfect time,” he during an interview on Monday. “Interest rates are about a one percentage point less than it was this time last year … that’s a 10 percent savings on a 30-year mortgage a month.”B
The Federal Reservemight cut the federal funds rate twice this year, a move that could cause the 30-year fixed rate to fall even lower.
“If you get two rate cuts at 50 and if you get to 75, yeah, I think you can be back down to three and a quarter [percent], Taylor said.C
Taylor adds that the lower interest rates allow consumers to reach a little deeper into their pockets and “afford more of a house.”
“People are feeling better about their jobs right now and they’ve been saving. It’s a great time to finally to get into the housing market and make a purchase,” he said.
The societal ramifications of state-legalized marijuana — a $10.4-billion industry — are being hashed out, study by study. And home values are one of the effects under scrutiny.
The link between real estate prices and weed might not be readily apparent, until one considers the en vogue vibe of licensed retail pot shops. Some are so slickly upscale-minimalist they sell branded yoga mats and Obama Kush, a Cannabis indica strain that “channels the president’s famous message of ‘change’ as it invigorates and inspires.”
Your favored budtender can set you up, and she might even offer hope: Lucrative legal weed does indeed seem to bake premium bucks into the worth of your home.
The most thorough study found that legalizing retail marijuana in Colorado increased housing values by about 6%, or $15,600 a property. Among all the factors contributing to home price increases, that accounted for about 27% of overall appreciation in municipalities that adopted legal cannabis from 2010 to 2015, according to the University of Mississippi study, published last year in Economic Inquiry.
“Our result is quite robust,” the study’s coauthor, Cheng Cheng, said in a written response to questions. “This result remains robust when we account for the impact of other common housing value determinants (e.g., housing characteristics and demographics) and of the regulation of medical marijuana.”
And the effect was still evident when they compared different municipalities within metropolitan areas, said Cheng, an assistant professor of economics at the University of Mississippi. He used a variety of data sources — including tax assessors, county records, the U.S. Census Bureau and the MLS — to arrive at his conclusions.
Colorado approved marijuana for recreational use in 2012. In 1996, California became the first state to legalize medical cannabis, and voters approved recreational use in 2016. Cannabis remains illegal at the federal level, classified as a Schedule 1 drug, along with others considered ripe for abuse, such as heroin and LSD.
Cheng posits that property values get a contact high from retail marijuana because home buyers, entrepreneurs and job seekers who flood a newly legal marketplace create “unprecedented business and employment opportunities.” They’re also sparking demand within a fixed housing inventory. And he added that an injection of new tax revenue means neighborhood amenities can be upgraded, likely enticing homeowners to stay put while driving prices upward.
Other sleuths have sliced and diced Zillow’s vast real estate data to arrive at similar findings — a process that’s now relatively easy given advances in text-mining software.
Home values immediately increased once voters approved legal cannabis, long before retail shops opened, according to a Zillow analysis run by St. Louis-based Clever Real Estate, an agent referral network. The firm examined data from 2017 to 2019 in all U.S. cities.
Those that legalized recreational marijuana saw home values increase $6,337 more than in cities where pot is illegal, the study found, after controlling for population, initial home values, GDP and other variables.
“There’s an immediate bump right after legalization because investors see opportunities to go into those markets; they bring more job seekers,” said Thomas O’Shaughnessy, Clever’s head of research. A 2018 Cato Institute study observed findings similar to those unearthed by Cheng and Clever.
Cities that approved marijuana only for medical use did not experience the same value jolt as those where recreational weed is available. Instead, home prices increased at rates comparable to those in cities where all marijuana is illegal.
So it appears the commercial sale of cannabis is what stimulates home values. Washington, D.C., legalized cannabis for recreational and medical use in 2014 but barred commercial sales. Lack of a regulated citywide pot market “resulted in slower growth for the D.C. area compared to the national average,” author Luke Babich wrote in the Clever study.
Without that cash flow (sales of buds, edibles, extracts, tinctures, vape pens, branded yoga mats…), “money won’t flow back into the market and housing prices won’t respond over the long term,” Babich wrote.
Following California’s voter approval of cannabis in November 2016, “San Jose saw its sharpest historical two-year increase in home values” in two decades, a $303,200 hike, Babich noted. Of course, that entire $300K can’t be attributed to legal weed, said O’Shaughnessy, especially given Silicon Valley’s blistering housing market.
Still, (borrowing from that “Obama Kush sales copy) such increases no doubt induce a “euphoric rush” as well as some “cerebral stimulation” — at least for homeowners. For home buyers, news of pot-induced price hikes are probably a serious buzzkill.
The tectonic plates of America’s major real estate markets continue to shift beneath our feet. Little more than a year ago, unstoppable home price increases seemed to be the new normal just about everywhere. Go, go, go! It was a never-ending party for sellers, and mass anxiety for price-squeezed buyers. But then last fall came signs of a housing slowdown, as big-city prices began to level off—or in some markets actually drop. Was a housing bubble about to burst?
Well, not quite. Nationally home prices still rose 6.9% year over year in April. But here’s the thing: That’s actually the lowest price growth in five years. And according to the latest data, 1 in 5 metropolitan areas is now seeing decreases in home prices, compared with half as many a year ago. So what are the places moving from a seller’s market to a buyer’s? The realtor.com® data team set out to find those metros where home prices are falling the most.
“In a lot of markets buyers are hitting an affordability ceiling,” says Chief Economist Danielle Hale of realtor.com. “Prices just can’t keep rising if buyers can’t keep up. They are dropping out, and that’s why we’re seeing prices adjust [down] in some markets.H
There are some surprises on this list—including some of the highest-profile markets in the country (hello, San Francisco Bay Area!). It turns out there is a limit to how high home prices can go, even in some of America’s most alluring, if overheated, places.
Some markets are seeing price drops due to overbuilding: This creates too much supply and not enough demand, so prices naturally fall. And just like in past years, in other areas, natural disasters devastated lives, communities, and local real estate.
“A disaster will affect your ability to market” your home, says Orell Anderson, president of Strategic Property Analytics, in Laguna Beach, CA. It can boost home prices and rents in unaffected pockets as locals compete for housing. But it can also hurt an area’s image as folks don’t want to suffer through another disaster. “The market will demand a discount.”
To figure out where prices are down the most, we looked at the change in median list prices on realtor.com from April 2018 to April 2019 in the 250 biggest metropolitan areas.* We filtered out markets where price per square footage was up over that period. And we limited the ranking to no more than three metros per state.
So where are prices declining the most? Buckle up, let’s take a cross-country trip.
Median list price: $1.1 million Median list price change: -8.4%
Yes, you read that right. Perennial hottest market in the U.S., San Jose is seeing the steepest declines in home prices these days. For the past few years, home prices in this city at the heart of Silicon Valley have soared at double-digit rates. But last fall, red flags started to appear. Sellers began slashing list prices, with the number of price reductions jumping 200% over the previous year. Now prices are plummeting faster than anywhere else in the U.S.
Time for a quick reality check: None of this means that San Jose has become a bargain. It’s still America’s most expensive real estate market. But therein lies the problem—prices just shot up too high. From April 2017 to April 2018, median list prices soared a remarkable 28%. And even in the San Francisco Bay Area, what comes up must come down. Eventually.
“When [prices] jump that quick, it can produce a reaction with buyers, who say, ‘I can’t do it anymore, that is just too expensive,'” says Patrick Carlisle, Bay Area chief marketing analyst at the real estate firm Compass.
Federal tax law changes also played a role. Homeowners can now deduct only up to $10,000 in property and income taxes combined. Plus, the amount of mortgage interest deduction folks can write off on their taxes was reduced. In pricey areas like San Jose, that can translate into a big financial hit.
This has led dwellings to sit longer on the market, climbing from a median 19 days to 27 from April 2018 to April 2019. Meanwhile, the amount of abodes currently for sale has jumped 92%.
Median list price: $681,100 Median list price change: -5.4%
In late 2017, the Thomas fire burned almost 300,000 acres, destroying more than 1,000 homes in Ventura County, part of the Oxnard metro, and surrounding areas (including Santa Barbara County). At the time it was the largest wildfire in California history. And that was just the beginning of the widespread damage—the conflagration damaged ground soil and tree roots, leading to mudslides that wiped out still more homes.
In the disaster’s wake, some displaced victims left the area altogether instead of going through the long, painful process of rebuilding. Others who were thinking of moving to the area changed their plans altogether.
Overall rising prices in the area north of Los Angeles are also to blame. Last spring, buyers hit their breaking point, says local real estate agent Kevin Paffrath, of meetkevin.com. With high prices, mortgage rates, and the tax changes, many stayed on the sidelines, lessening demand in the area.
Median list price: $265,000 Median list price change: -5.4%
The 64,000 Texas A&M University students that pour into College Station every fall—plus all of the faculty and staff—need lots of places to live. But builders in pro-development Texas went a bit overboard in recent years. That resulted in a glut of new homes in this market two hours northwest of Houston, pushing inventory up 18.3% year over year and causing prices to tumble.
Eventually, investors are expected to snap up many of these properties and rent them out to students. But it also means buyers have options. So they can take their time finding the right one—and then negotiating the price down.
Median list price: $750,000 Median list price change: -4.9%
Prices are sky-high in this golden metro encompassing all of wealthy Fairfield County, home to some of the toniest enclaves just outside of New York City. But as in California, tax law changes made buying sprawling mansions in uber-wealthy communities such as Greenwich more expensive. That’s because the state has some of the highest property taxes in the nation—and now homeowners can’t write off nearly as much.
Plus, many of the affluent buyers who might normally head for Fairfield County may be choosing to go to Manhattan instead. That’s because the city has had an influx of new, luxury towers going up in recent years—including the flashy, massive development Hudson Yards.
Median list price: $948,300 Median list price change: -4.1%
When California home prices overheated late last year, it was no surprise that San Francisco—the second-most expensive metro in the nation, after San Jose—took a big hit.
Prices here jumped 10% from April 1, 2017, to April 1, 2018, making homeownership a steeper-than-ever climb for ordinary people. And more homes are going up for sale in lower-priced areas nearby, like Oakland, which is pulling the metro’s median list price down, says Carlisle of Compass.
But prices may soon surge again. San Francisco–based Uber and Lyft just went public, and Pinterest, Slack, Postmates, and Airbnb might soon follow suit. With all of those initial public offerings, workers could be in line for some windfalls. And what better way to spend all that money than on real estate?
“Some sellers have stopped putting their homes on the market because they want to wait for the supposed rush of [IPO] buyers,” Carlisle says.
Median list price: $481,600 Median list price change: -3.5%
The Kilauea Volcano spewed a miles-long lava stream through the Big Island of Hawaii last May. The news was plastered with images of magma tearing through Hawaiian homes, about 700 of which were destroyed. Recovery efforts are expected to cost more than $800 million.
It shattered the image of a Polynesian paradise for many foreign investors, wealthy professionals, and rich retirees drawn to Hawaii as a dreamy second-home destination. And in the months following the eruption, tourism dropped off—a huge deal for a market that relies heavily on the business.
Median list price: $300,000 Median list price change: -3.3%
Last year, a massive algae bloom turned Cape Coral’s 400-plus-mile canal system, the crown jewel of the city, into a stinking, toxic green waterway. That wasn’t exactly an inducement for buyers in this fast-growing retirement town, and real estate prices fell accordingly.
“It was smelly and ugly,” says Mike Lombardo, a local real estate agent at Old Glory Realty. “You couldn’t go to the beach because of all the algae. And you couldn’t go fishing because the algae was killing the fish. The whole [real estate] system here is built off people coming down here to enjoy the weather and beach.”
Median list price: $180,100 Median list price change: -2.9%
Located on the U.S.-Mexico border on the banks of the Rio Grande River, Laredo is one of America’s largest inland ports, with more than $200 billion in goods passing through every year. So why is this city packed with customs and border security gigs seeing home prices drop?
It boils down to overbuilding, particularly at the higher end of the market. There’s no shortage of new homes sprouting up here, which means existing homes competing for those buyers have to lower their prices.
“Homes for over $300,000 are on the market longer than usual,” says Sandra Mendiola Alaniz, local broker/owner of Re/Max Real Estate Services.
Median list price: $143,300 Median list price change: -2.3%
Huntington is a struggling metro that’s been badly affected by the opioid crisis. Many are leaving the city, on the Ohio River, for better-paying jobs and opportunities elsewhere. That means there aren’t exactly a lot of people clamoring to buy real estate, which keeps prices down.
Prices were low to begin with, so even a small decline can move the needle quite a bit. The median price here dropped $3,300—compared with $105,000 in San Jose.
Median list price: $275,000 Median list price change: -1.8%
When the polar vortex rolled into the Midwest earlier this year, it brought minus 20 degrees to Iowa, turning boiling water to ice in seconds. That rough winter meant the spring buying season got off to a very late start.
“People weren’t listing,” says Emily Farber, a Realtor at Lepic-Kroeger Realtors. “It was harder for them to take care of exterior maintenance because the weather was so atrocious.”
Plus, there wasn’t as much new construction in the cold. So other would-be sellers couldn’t find a new or trade-up home to buy—so they waited, too.
“It created a snowball effect,” says Farber. As it were.
The spring home buying market got off to a disappointing start in April, as sales sputtered and the state marked the ninth consecutive month of year-over-year sale declines, a new report Thursday shows.
The median sale price of a single-family house was unchanged in April, at $250,000, on a 5-percent decline in sales, according to the monthly report from The Warren Group, which tracks real estate trends in New England.
Sales closed in April typically would have gone under contract 45-60 days earlier, right around the traditional start of the spring homebuying season.
Through the first four months of this year, sales are down nearly 7 percent, compared with the same period in 2018. In the same period, the median sale price fell 1.2 percent, to $240,000, compared with $243,000 for the same four-month period last year.
Hartford County’s home sale market did better than the state as a whole in April. Sales were flat, but the median sale price crept up 1.4 percent to $223,000 from $219,000 for the same month a year ago.
Across all the state’s eight counties, all but Hartford, Litchfield and Middlesex counties saw year-over-year sale declines in April. The deepest decline was registered in New London County, down 16.6 percent compared with April of 2018.
The statewide median sale price was pulled down by declines in Fairfield, Tolland and Windham counties. Price gains in the other five counties — the highest being a 11-percent year-over-year rise in Middlesex County — were not strong enough to lift the overall median price to an increase.
So far in 2019, the four-month trend for sales and prices paid is disappointing for the state’s housing market, which has struggled to recover from the last recession, which ended in March 2010. There were hopeful signs in 2018 when Connecticut registered its third consecutive annual gain in median sale price. The velocity of sales remain a concern, however, failing to show upward momentum.
The median sale price is a well-watched indicator of changes in sale prices and trends affecting property values. But it doesn’t necessarily mean all home prices and values, for that matter, are moving in the same direction.
Chinese investors have been the biggest purchasers of U.S. residential real estate for six consecutive years, but President Trump’s trade war, and China’s efforts to reduce its national debt and boost economic growth, could change that.
In 2018 dollars, Chinese buyers accounted for roughly 25% of total foreign investment in U.S. residential real estate. Canada was No. 2 at 9%.
Of the 284,000 properties sold to foreign buyers last year, some 40,400, or 15%, were bought by Chinese nationals. Five years earlier, Chinese nationals had purchased 23,075 homes, representing just 12% of all properties sold to foreign buyers.
Even China’s growing share in recent years represents a small percentage of overall investment in U.S. residential real estate. As of 2018, foreign buyers in aggregate accounted for just 3% of U.S. home sales, the association added. That figure had been rising, but experienced a modest decline between 2017 and 2018. The figures for 2019 are expected to be similar to the 2018 levels.Long before the current trade dispute, the Chinese government had been creating hurdles for its citizens who wanted to invest abroad. The country started restricting outbound investments in 2016, allowing residents to take only the equivalent of $50,000 out of the country, as a means of propping up the country’s currency. This not only made it more difficult to purchase real estate in America but prompted some Chinese investors to sell their U.S. assets.
A Chinese pullback could have serious effects for some West Coast markets
Unlike foreign buyers from other countries who spread their investments more evenly across the U.S., Chinese residential real-estate investment is highly concentrated on the Pacific Coast. Nearly 40% of Chinese buyers have purchased in California, home to a large Asian community.
But California isn’t the only place where a fall in Chinese buyers would make a difference. Chinese nationals represent a significant share of the foreign buyers of residential real estate in the New York City metropolitan area and growing shares of buyers in states including Florida and Texas.
Chinese buyers also play a big role in the residential-real-estate markets of college towns, as more Chinese students have opted to study at American universities, Yun said.
However, a retreat by Chinese buyers could be good news for Americans looking to purchase a home, especially in such costly Golden State markets as San Francisco, Los Angeles and San Diego. These are among the most expensive in the entire country, and their popularity had contributed to double-digit home-price appreciation in recent years.
The rate at which home prices are climbing has recently slowed as buyers have struggled with affordability. The lack of competition from foreign buyers, who typically enter competitive all-cash offers, could provide an opportunity to get a better deal on a home for locals looking to buy.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate fell to 3.82 percent, the sixth consecutive weekly decline and its lowest level since September 2017.
Sam Khater, Freddie Mac’s chief economist, says, “While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates that there can be a wide dispersion among mortgage rate offers. By shopping around and getting a single additional mortgage rate quote, a borrower can save an average of $1,500.”
“These low rates are also good news for current homeowners. With rates dipping below four percent, there are over $2 trillion of outstanding conforming conventional mortgages eligible to be refinanced – meaning the majority of what was originated in 2018 is now eligible,” he says.
30-year fixed-rate mortgage (FRM) averaged 3.82 percent with an average 0.5 point for the week ending June 6, 2019, down from last week when it averaged 3.99 percent. A year ago at this time, the 30-year FRM averaged 4.54 percent.
15-year FRM averaged 3.28 percent with an average 0.5 point, down from last week when it averaged 3.46 percent. A year ago at this time, the 15-year FRM averaged 4.01 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
Welcome to the exurbs: remote areas just beyond the more affluent suburbs that have seen a wave of activity from builders and home shoppers.
According to a recent report by the National Association of Home Builders, the exurbs were the only regions that saw an annual increase in single-family permits in the first quarter of 2019.
Posting a 1.6% year-over-year gain, the exurbs are home to just 9% of the nation’s single-family construction. But while this might not seem like much, its share is growing – a fact that some analysts say is raising red flags.
Why? The last time the exurbs saw activity increase was during the housing boom, when speculators got a bit over-excited about the opportunity to make the big bucks by flipping homes on the cheap. But when the bubble burst, these areas were largely abandoned, and builders were left deep in the red.
A renewed surge of activity in exurban areas is a key indicator of a general lack of affordability that is plaguing the housing market.
“A shortage of buildable and affordable lots is forcing builders to increasingly look further outside of suburban and metropolitan areas to find cheaper land that provides more building opportunities,” explained NAHB Chairman Greg Ugalde.
NAHB Chief Economist Robert Dietz said the data highlights the fact that housing costs are increasing at a faster pace in large metro suburban counties.
“Supply-side issues that are hurting affordability and raising costs for builders include excessive regulations, labor shortages, rising material costs and a dearth of buildable lots in mid- to high population centers,” Dietz said.
The euro area is at risk of a new real estate bubble as a result of expansionary monetary policy from the European Central Bank (ECB), Commerzbankanalysts have warned.
The ECB council meets on Thursday June 6, and is likely to decide on the details of the third edition of its targeted longer-term refinancing operations (TLTRO-III) program, a series of Eurosystem operations that provide financing to credit institutions for periods of up to four years.
TLTROs offer long-term funding at attractive conditions to banks in order to encourage them to lend capital to the real economy.
The central bank has faced calls from some corners of the market for fresh stimulative measures to aid the anemic European economy, and the third round of TLTROs represent a continuation of its expansionary monetary course.
“With a view to low core inflation, some policies are often passed off as a free lunch,” a note from Commerzbank senior economists Dr Ralph Solveen and Dr Jorg Kramer said in a note Friday.
“Yet the ECB’s expansionary monetary policy has a cost and it comes in the form of higher house prices, which already appear expensive in some countries, and the threat of a property price bubble is a real possibility.”Rising house prices
Commerzbank highlighted that house prices have been rising rapidly in the majority of eurozone economies, including the large economies of Germany, Belgium and France. With an increase of around 4.5% in the course of 2018, Germany was slightly above average in terms of rising house prices, while Slovenia and Latvia saw double-digit rises. Portugal, the Netherlands and Luxembourg all rose at almost 10% rates.
Yet Commerzbank analysts anticipate that ECB interest rates will remain in negative territory for the foreseeable future, further heightening the threat of a real estate bubble.
“The relation between house prices and rents, a frequently used measure for the valuation of real estate, has risen by more than 10% since early 2015. This is less than 5% below its level at the beginning of 2008, when the housing market in some euro area countries had formed considerable bubbles,” the note stated.
Commerzbank expects that if the ECB maintains its monetary policy stance until the end of 2020, average house prices will exceed pre-crisis levels.Falling debt and no building boom
Solveen and Kramer pointed out that the strength of impact of a bursting price bubble on the real economy depends, in part, on the extent to which rising house prices are accompanied by rising debt and a construction boom.
The euro zone as a whole is not yet in this position, the analysts suggested, with private household debt relative to GDP falling steadily across most of Europe’s Economic and Monetary Union (EMU), although Belgium and France were noted as exceptions.
There is also no question of a construction boom, the economists highlighted, and the share of residential construction investment in eurozone GDP is now significantly lower than at the beginning of 2008.
“The situation is somewhat different in Germany, where the rise in prices in recent years has been accompanied by a sharp rise in construction investment and bottlenecks are increasingly occurring in the construction sector,” the Commerzbank note stated.
“However, the share of residential construction investment in GDP is still lower than at the beginning of the monetary union, and there was certainly no construction boom in Germany at that time.”
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage rate dropped below four percent for the first time since January 2018.
Sam Khater, Freddie Mac’s chief economist, says, “While economic data points to continued strength, financial sentiment is weakening with the spread between the 10-year and the 3-month Treasury bill narrowing as fears of the impact of the trade war with China grow. Lower rates should, however, give a boost to the housing market, which has been on the upswing with both existing and new home sales picking up recently.”
30-year fixed-rate mortgage (FRM) averaged 3.99 percent with an average 0.5 point for the week ending May 30, 2019, down from last week when it averaged 4.06 percent. A year ago at this time, the 30-year FRM averaged 4.56 percent.
15-year FRM averaged 3.46 percent with an average 0.5 point, down from last week when it averaged 3.51 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.