Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) rate averaged 3.49 percent, the lowest it has been since October 2016.
Sam Khater, Freddie Mac’s Chief Economist says, “Mortgage rates continued the summer swoon due to weaker economic data. While economic growth is clearly slowing due to rising manufacturing and trade headwinds, economic fundamentals are still solid for U.S. consumers. The unemployment rate is low, housing affordability is improving, homebuyer demand is rising, and home price growth is stable.”
30-year fixed-rate mortgage averaged 3.49 percent with an average 0.5 point for the week ending September 5, 2019, down from last week when it averaged 3.58 percent. A year ago at this time, the 30-year FRM averaged 4.54 percent.
15-year FRM averaged 3.00 percent with an average 0.6 point, down from last week when it averaged 3.06 percent. A year ago at this time, the 15-year FRM averaged 3.99 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.
Freddie Mac is launching a new mortgage product that allows borrowers to buy a fixer-upper and finance the renovation all with one loan. Existing homeowners can use it to repair or improve their properties.
The government-sponsored enterprise announced its new CHOICE Renovation loan product on Wednesday, saying it’s available immediately to all approved lenders. Lenders have two paths for delivering the loan to Freddie. They can either wait until the renovations are complete, or, for approved lenders, they can deliver the loan while work is ongoing if they’re providing oversight for the projects.
“We recognized there’s a significant amount of aging housing stock, both in under served areas and in the broader housing market, and there’s also a need for affordable housing,” Kelly Marrocco, director of credit policy at Freddie Mac said in an interview. “This is a new offering that allows people to purchase a home that needs repair, or allows existing homeowners to renovate without having to do a cash-out refinance.”
The new mortgage product has a unique feature to address the danger of natural disasters and flooding. It allows owners to use the funds to renovate or repair a property that has been damaged in a natural disaster or for changes that will help to prevent damage from a future disaster, such as work on storm surge barriers, foundation retrofitting, or retaining walls.
The funds “can be used to address housing resiliency items that will either repair damage or improve the homes ability to withstand environmental hazards,” Marrocco said.
The renovation market has grown by more than 50% since the Great Recession ended in 2009, Freddie Mac said in its announcement of the new loan product. Nearly 80% of the nation’s 137 million homes are at least 20 years old and 40% are at least 50 years old.
“Given the increasing age of existing housing stock, the growing number of millennials and other first-time home buyers looking for more affordable home buying options, and the increase in retirees opting to age in place, the Freddie Mac CHOICE Renovation mortgage is a flexible solution to finance or refinance these fixer-uppers,” Danny Gardner, a Freddie Mac senior vice president, said in the announcement.
As the housing market shifts further in favor of homebuyers, Ellie Mae’slatest Millennial Tracker Survey reveals that purchase requests from Millennials increased to 87% of all purchase requests made in February, a 2% increase from January.
The survey also revealed that although conventional loans continue to be the most popular loan product among the generation, they fell slightly to 68% of all loans.
Interest in refinances fell two percentage points from the previous month, coming in at 11% of all loans for Millennial borrowers.
“The percentage of purchase loans is on the rise with Millennials continuing to enter the homebuying market for their first or maybe even second purchase,” Executive Vice President of Strategy and Technology Joe Tyrrell said. “The increase in days-to-close we saw in February is relative to the percentage increase in purchases versus refinances, as purchases typically take longer to close.
According to the survey, it typically took Millennials 46 days to close on conventional loans, which is the longest average time to close since January 2017. Among conventional loans closed by Millennials in February, it typically took the generation 44 and 53 days to close on a purchase and refinance loans, respectively.
Notably, the Millennial Tracker also discovered that the average time to close on all loans decreased to 42 days in February. During the same period, the average closing time on FHA loans fell to 42 days, while the average time to close on VA loans increased to 59 days month-to-month.
Lastly, the survey highlighted that the average FICO score for Millennial borrowers edged up to 723 in January, rising from 722 in January, according to Ellie Mae.
Millennials are finding it increasingly difficult to become first-time buyers. Even for those that have managed to find (albeit shaky) footing on the housing market, it’s not easy. Moving to a bigger and better house is often out of the question, for example. But millennials are a crafty lot; if moving isn’t an option, why not remodel? In fact, over 25% of millennials are choosing to do just that. In this article, we focus on what they decide to focus their remodelling energies on.
As we’ve already mentioned, millennials are either choosing or being forced to stay in their homes. With moving an impossibility, even with growing families, millennials have had to get creative with maximizing space:
Function first. Style is important, but if space comes at a premium, then function is the first thing on the millennial’s mind.
Storage everywhere. Hooks against kitchen walls to hang pots and pans. Drawers under the couch. Pull-out closets. Cabinets against the ceiling. You get the drill.
Natural light. Sometimes it’s impossible to create extra space. So why not the next best thing? Adding a window or skylight can give you the illusion of a bigger home.
ENJOYING OUTDOOR SPACE
Millennials are massively investing in their gardens. In fact, it’s becoming kinda cool, with millennials now spending more on average than their parents. Growing vegetables is definitely becoming a thing, with millennials liking growing their own organic food. It’s tastier, better for the environment, and it’s a fun project to get involved in.
Millennials don’t tend to live in homes with a lot of outdoor space. Gardens are like gold dust, so it’s no surprise that if they manage to get their hands on one, millennials take care of it.They spend a lot of time researching sustainable designs and plants to occupy it.
LOW MAINTENANCE BEATS STYLE
Millennials are big on homes that don’t really take much effort to maintain. They want practical homes built with eco-friendly products. Homes that are built with cheap and sturdy materials, rather than the stylish but overpriced stuff. Here are two examples of what we’re talking about:
Hard flooring, not carpet. Carpets are expensive, get stained easily, will only be in decent condition for a few years tops (less if you have kids!), and it doesn’t look as cool as hardwood flooring.
Metal roof. Tiles have the traditional vibe going for them, but they’re more annoying to maintain than metal roofing. And it doesn’t have to look worse either; many of the newer metal roof varieties are modern and slick.
SMART TECHNOLOGY IS THE SMART CHOICE
Millennials are huge on tech, so it’s no surprise that many of them are turning to smart technology to transform their homes. And it’s not just buying an Amazon Echo. These are some remodelling upgrades that help millennials smarten up their homes:
USB outlets. Power outlets aren’t enough these days.
Built-in speaker systems. When it’s challenging to find space in smaller homes, solutions like built-in speaker systems are a cool way to solve the problem.
Motion sensors. Security is important, especially for millennials living in the big cities where break-ins are a little more common.
Smart thermostats. Not only to save bills, but these also help the environment by limiting your energy usage to when you actually need it.
Pending home sales declined as a whole in December, but for the second straight month the Western region experienced a slight increase, according to the National Association of Realtors®.
The Pending Home Sales Index,* www.nar.realtor/pending-home-sales, a forward-looking indicator based on contract signings, decreased 2.2 percent to 99.0 in December, down from 101.2 in November. Additionally, year-over-year contract signings fell 9.8 percent, making this the twelfth straight month of annual decreases.
Lawrence Yun, NAR chief economist, cited several reasons for the decline in pending sales. “The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December,” he said.
All four major regions experienced a decline compared to one year ago, with the South sustaining the largest decrease.
Yun says so far, the partial government shutdown has not caused any obvious damage to home sales. “Seventy-five percent of Realtors® reported that they haven’t yet felt the impact of the government closure. However, if another government shutdown takes place, it will lead to fewer homes sold,” he said.
According to Yun, as the government reopens, more mortgage options will come available for consumers. “Some home transactions were delayed, but we now expect those sales to go forward,” he said.
Still, there is growth in certain pockets. Yun cited year-over-year increases in active listings from data at realtor.com® to illustrate a potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., San Diego-Carlsbad, Calif., and Portland-Vancouver-Hillsboro, Ore.-Wash. saw the largest increase in active listings in December compared to a year ago.
Yun says despite the low home sales in December, he is confident that the housing market will see improvement in 2019. “The longer-term growth potential is high. The Federal Reserve announced a change in its stance on monetary policy. Rather than four rate hikes, there will likely be only one increase or even no increase at all. This has already spurred a noticeable fall in the 30-year, fixed-rate for mortgages. As a result, the forecast for home transactions has greatly improved, “Yun said.
December Pending Home Sales Regional Breakdown
The PHSI in the Northeast rose 2.0 percent to 93.2 in December, and is now 2.5 percent below a year ago. In the Midwest, the index fell 0.6 percent to 97.5 in December, 7.2 percent lower than December 2017.
Pending home sales in the South fell 5 percent to an index of 109.7 in December, which is 13.5 percent lower than a year ago. The index in the West increased 1.7 percent in December to 88.4 and fell 10.8 percent below a year ago.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.
HAVANA — Rafael Álvarez was up at 6:30 a.m. to warm milk for his baby daughter when he heard the sound of pebbles falling.
“That’s when the floor below us came loose. We were left hanging in the air, then fell into the abyss.”
Álvarez, 41, a baker, was buried in rubble to his waist. His mother, daughter and two others were killed when the 101-year-old building collapsed.
“Save the babies!” were his mother’s last words, he said.
In Havana, some of the same architectural gems that draw tens of thousands of American tourists crash to the ground every year. Causes range from weather and neglect to faulty renovations and theft of structural beams.
Carlos Guerrero, 45, said he and his family live “like scared dogs” in a crumbling building along Merced Street.
Neighbors tell them, “Get out of there! It’s going to collapse!”
“It makes you feel like going and living under a bridge,” said Guerrero, who vows to grab a machete and seek revenge on housing officials if anything happens to his wife and three children.
Some 3,856 partial or total building collapses were reported in Havana from 2000 to 2013, not including 2010 and 2011 when no records were kept.
The collapses worsened an already severe housing shortage. Havana alone had a deficit of 206,000 homes in 2016, official figures show.
The housing crisis is one of the most pressing challenges facing Cuban President Miguel Díaz-Canel, who vowed to improve housing after taking charge of the communist nation of 11 million people in April.
Havana, a city of about 2 million people, had a shortage of 206,000 homes in 2016, official figures show. (Photo: Tracey Eaton, Special to USA TODAY)
Havana officials have won dozens of international awards for their work to restore the historic sector known as Old Havana, with styles ranging from Baroque and neoclassical to Art Deco.
UNESCO calls Old Havana one of Latin America’s “most notable” historic city centers and named it a World Heritage site in 1982.
Havana officials use tourism revenue to renovate many architectural treasures, but can’t keep up with the decay.
Officials estimate 28,000 people live in buildings that could collapse at any moment. Some residents refuse to leave structures that authorities have declared unsafe.
“Of course we’re scared but what are we going to do?” said Yanelis Flores, 42, who rejected a government offer to move into a shelter.
“I will wait for a house,” said Flores from the eighth floor of the former Hotel Astor, which had American management and 200 rooms in the 1930s.
Today, daylight shines through terrifying cracks in the walls.
“This is worse than a pig pen,” Flores said. “It’s rotting.”
The third-floor staircase collapsed in April 2017.
“It was a tremendous explosion – boom!” second-floor resident Yuslemy Díaz recalled. “People on the third and fourth floors were stranded because they couldn’t get down. It was a madhouse.”
Workers brought in a truck-mounted crane to deliver meals to stranded residents.
They built a makeshift wooden staircase. Authorities began relocating residents on the 9th and 10th floors.
Díaz, 32, a manicurist, is eager to move.
‘You live with fear’
“The moment it starts to rain and a little stone falls next to you, you think it was the building. You live with fear. A building doesn’t tell you, ‘I’m going to fall tomorrow at 3 p.m.’ It falls – boom! – at any time day or night. It doesn’t warn you.”
Before the stairway failure, residents say, people had been prying valuable marble tiles from the walls, weakening the staircase.
Yunier Angulo, 31, a butcher, left the building seconds before the stairway crumbled. A man just behind him was seriously hurt.
Angulo’s friends told him he was lucky. “You were born that day,” they said. But he doesn’t feel any safer and said he sleeps “with one eye open and the other closed.”
“The building could collapse tomorrow. It gets worse every day.”
Across town, Leydis Castro, 77, has a leaky ceiling, but refuses to ask for a handout. “The government doesn’t have a duty to fix everyone’s house.”
Her neighbors disagreed and wouldn’t pay a cent when the city offered repairs in exchange for a monthly fee, she said.
Fidel Castro promised to demolish “hellish tenements” and build safe, modern housing when he took power in 1959.
Today, Magaly Marrero, 65, said her apartment is so bad that she showers in the kitchen and relieves herself in a bucket.
“Sometimes I say, ‘God, how long will I live in these conditions?’ This is no life,” she said. “What can I aspire to? To die buried because one day the roof comes down and crushes me?”
No deaths, injuries data
Cuban officials don’t release figures on those killed or injured in building collapses.
Álvarez, the baker, said before his second-story apartment came down on July 15, 2015, workers on the ground floor had been using a jackhammer to strip the walls to the brick. He said cracks from below began inching toward his apartment. His mother complained, but city inspectors said the workers weren’t to blame.
Álvarez said his wife, Lizbett, 41, fell head first into the rubble during the building collapse and was in a coma for 22 days. She recovered, but doesn’t like talking about the episode and won’t walk past 409 Havana Street where her home once stood.
Álvarez fractured his spine in three places, but dismissed his injuries and praised the victims.
Rafael Álvarez said his mother who was killed in the building collapse taught him “to be strong, to persevere. To be a good person, to get along with everyone.” (Photo: Tracey Eaton, Special to USA TODAY)
He said his mother, Mayra Páez, 60, shouted “Save the babies!” until her voice grew silent.
Rescuers told him she suffocated. She was a former nurse, “much loved in the neighborhood,” her son said.
She taught him “to be strong, to persevere. To be a good person, to get along with everyone.”
No one could save his daughter, Genolan, 3. She was “a happy girl,” her father said. “She talked all the time and danced a lot.”
His nephew, Jorge Álvarez, 18, wanted to be a welder.
“He was my life,” his uncle said.
The teenager’s girlfriend, Glendys Kindelán, had just turned 18. Her mother, Yaima Kindelán, said she frantically searched for her daughter at hospitals before finding her body, wrapped in gauze at a funeral home.
“I couldn’t see her face,” she said.
She said her daughter “a very respectful girl, a student” who dressed as a nurse for a photo shoot on her 15th birthday. Her mom joined her as a police officer.
The teen had two dogs, Yonky and Princesa, who rarely left her side. “Having those little animals that she loved so much, she wanted to become a veterinarian,” Kindelán said.
After the accident, authorities investigated an architect and four others who had planned to open a fast-food restaurant at the site.
This summer, authorities told Álvarez they didn’t have enough evidence to prosecute anyone.
“I started to cry. I expected that justice would be done. They said, ‘Calm down, sir. Calm down. Do you want some water?’
Construction companies have been ratcheting pay higher to find workers.
Average hourly earnings for construction workers were $30.21 in October, the Labor Department reported Friday. That represented a 3.9% increase in wages compared to a year ago, the strongest yearly gain since mid-2009.
The U.S. housing sector is falling apart, and the Federal Reserve is all but ignoring the damage as it prepares for what many expect to be three rate hikes in 2019, CNBC’s Jim Cramer warned Friday.
“The housing sector’s a disaster,” Cramer said on “Closing Bell.” “We’re building about half the houses we did when the country had half the people, and we still can’t sell them. KB Home does a huge amount of housing in California. They can’t sell them. ”
The Fed’s interest rate hikes have contributed to the surge in mortgage rates, which in October jumped above 5 percent. The central bank has said it plans to hike rates in December of this year — a move Cramer supports — and three more times in 2019.
“I favor a rate hike, and then I’d like to wait. In what world is that irrational?” Cramer said Friday. “Affordability’s gotten out of control. [The Fed members] know that. We have affordability data. But they don’t want to focus on the things they should.”
That lack of rigor is leading the Fed to make decisions that are “not safe” and “irresponsible” when it comes to the U.S. economy, the “Mad Money” host said, echoing his earlier point that the Fed needs to do more homework.
“We shouldn’t look upon them as if they have great information. They had such bad information in 2007,” Cramer said. “They have this judgment that the economy’s great. It’s an irresponsible, non-empirical judgment. It’s anecdotal. It has not a lot of homework. And I favor rigor. I think rigor is what matters, sophistication and rigor. And they’re unsophisticated, and they’re non-rigorous, and I would rip up their homework and tell them to go home.”
With just about two weeks remaining before the midterm election, early voting has begun in many states. And as is true every year, several states will see significantly better turnout than others — sometimes twice as high. And while there are numerous reasons why people don’t vote, a recent study found that one major factor is that some states make it much harder than others to cast a ballot.
New York, which does not allow people to vote early, saw 56.2 percent of voters turn out for the 2016 election, following 29 percent in the 2014 midterm election and 53.5 percent in the 2012 election, according to an analysis of election data by the nonprofit organization FairVote. FairVote is a nonprofit dedicated to reforming America’s electoral system to achieve full participation and obtain a “truly representative democracy.”
If history is any indicator, several states will see between just 25 percent and 35 percent of voters turn out. This includes Texas, which ranked dead last in the country for voter turnout in the 2014 election with a paltry 28.3 percent. Here were the worst states for voter turnout (Washington, D.C., included) in the 2014 midterm election:
Meanwhile, some states see more than double that turnout. Maine had the highest voter turnout in the 2014 election at 58.5 percent of eligible voters. Wisconsin, Colorado, Alaska and Oregon rounded out the top five with 56.8 percent, 54.5 percent, 54.4 percent and 53.5 percent of voters casting a ballot, respectively. All except Oregon allow residents to vote up to 15 days before Election Day.Subscribe
As noted earlier, there are a variety of reasons that some states see better turnout than others. FairVote noted some of the biggest involve how competitive the races are supposed to be, the demographics of the voting population — voters tend to be older, wealthier, more educated and white — and how restrictive voting laws are.
A new study lent a lot of credence to that last factor. Researchers at Northern Illinois University, Jacksonville University and Wuhan University in China found that states are influencing who votes by either making it easier or harder to cast a ballot. They created an index and ranked each state according to the time and effort it took to vote in each presidential election from 1996 through 2016. They scrutinized the effect of more than 30 factors involving registration and voting laws.
“The study does give us some very substantive findings that we can report about the effect on voter turnout,” wrote lead author Scot Schraufnagel. “But we created this index with the idea in mind that it’s going to have a lot of interest for reasons beyond voter turnout because it helps to define an electoral climate, which might influence whether people are willing to run for public office or who is willing to run for office. There also are implications for civil rights. We know, anecdotally, states with larger African-American populations have higher ‘cost of voting’ values.”Mississippi, Virginia, Tennessee, Indiana, Texas and Michigan were ranked as the states where it’s most difficult to vote. Maine, Oregon, California and Colorado all cracked the top 10 in places where it’s easiest.
In 37 states, including three that mail ballots to all voters, along with Washington, D.C., any eligible voter can cast a ballot in person before Election Day without an excuse, according to the National Conference of State Legislatures. Colorado, Washington and Oregon use all-mail voting.
Meanwhile, 13 states, including New York, Michigan and Pennsylvania, offer no early voting and require you to provide a reason to vote by absentee ballot.
Making it easier to vote nationwide could boost election turnout by about 10 percentage points, Schraufnagel noted. This includes same-day voter registration policy, mail-in voting and, yes, early voting.
Sales of new single-family houses in the United States dropped 5.5 percent from the previous month to a seasonally adjusted annual rate of 553 thousand in September of 2018, following a downwardly revised 3.0 percent decline in August. August. It is the lowest rate since December 2016, worse than market expectations of 625 thousand. Sales in the Northeast went down to its lowest level since April 2015. Also, sales decreased in the West and in the South. New Home Sales in the United States averaged 650.36 Thousand from 1963 until 2018, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011.
US New Home Sales Lowest Since 2016
Sales of new single-family houses in the United States dropped 5.5 percent from the previous month to a seasonally adjusted annual rate of 553 thousand in September of 2018, following a downwardly revised 3.0 percent decline in August. It is the lowest rate since December 2016, worse than market expectations of 625 thousand. Sales in the Northeast went down to its lowest level since April 2015. Also, sales decreased in the West and in the South.
Sales declined in the Northeast (-40.6 percent to 19 thousand), its lowest level since April 2015; the West (-12 percent to 139 thousand) and in the South (-1.5 percent to 318 thousand). On the other hand, sales rose 6.9 percent to 77 in the Midwest. The median sales price of new houses sold was USD 320,000 below USD 331,500 in the same month of the previous year. The average sales price fell to USD 377,200 in September from USD 379,300 a year ago.
The stock of new houses for sale went up 2.8 percent to 327 thousand. This represents a supply of 7.1 months at the current sales rate, up from 6.5 months in August.
Year-on-year, new home sales decreased 13.2 percent.