|Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage fell to a 10-month low. Sam Khater, Freddie Mac’s chief economist, says, “The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months. This is great news for consumers who will be looking for homes during the upcoming spring home buying season. Mortgage rates are essentially similar to a year ago, but today’s buyers have a larger selection of homes and more consumer bargaining power than they did the last few years.”|
News Facts 30-year fixed-rate mortgage (FRM) averaged 4.41 percent with an average 0.4 point for the week ending February 7, 2019, down from last week when it averaged 4.46 percent. A year ago at this time, the 30-year FRM averaged 4.32 percent.
15-year FRM this week averaged 3.84 percent with an average 0.4 point, down from last week when it averaged 3.89 percent. A year ago at this time, the 15-year FRM averaged 3.77 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.91 percent with an average 0.3 point, down from last week when it averaged 3.96 percent. A year ago at this time, the 5-year ARM averaged 3.57 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.
The 2015 American Community Survey data shows that New Jersey still leads the nation with the highest average annual real estate tax (RET) bill of $8,180—$7,528 more than RETs paid by Alabama’s homeowners. The overall distribution remained roughly unchanged since 2014, as the composition of the top and bottom ten remained the same. The map below clearly illustrates that the highest property tax states are found in the Northeast while—with the exception of Texas—southern states boast the lowest RET bills for their resident homeowners.
Source: U.S. Census Bureau, 2015 American Community Survey, NAHB calculations
As property values vary widely by state, controlling for this variable produces a more instructive state-by-state comparison. In keeping with prior analyses, NAHB calculates this—the effective property tax rate as measured by taxes paid per $1,000 of home value—by dividing aggregate real estate taxes paid by the aggregate value of owner-occupied housing units within a state. As shown below, New Jersey has the dubious distinction of imposing the highest effective property tax rate—2.13% or $21.25 per $1,000 of home value. Hawaii levies the lowest effective rate in the nation—0.28%, or $2.84 per $1,000 of value.
Source: U.S. Census Bureau, 2015 American Community Survey, NAHB calculations
Interstate differences among home values explain some, but not all, of the variance in real estate tax bills across the country. Texas is an illustrative example of a state in which home values hardly, if at all, explain real estate tax bills faced by homeowners. While Texas ranks only 32nd in the country for average home values, it is 12th in average real estate taxes paid. Other factors are clearly at play, and state and local government financing turns out to be a major one.
Property taxes account for 35% of state and local tax receipts, on average, but some state and local governments rely more heavily on property taxes as a source of revenue than others. Texas serves as an excellent example once again. Unlike most states, Texas does not impose a state income tax on its residents. Even though per capita government spending is tame compared with other states—7th lowest in the country—Texas and its localities must still find a way to fund government obligations. Local governments accomplish this by levying the 7th highest effective property tax rate (1.63%) in the country, on average. The state government partly makes up for foregone individual income tax revenue by imposing a tax on corporate revenue rather than income
Builder Sentiment Up
Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
Builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth. Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. These factors will help keep housing on a steady, upward path in the months ahead.
It is worth noting that most of the November HMI responses originated before the elections. Thus, builder confidence remained unchanged as the industry awaited the results.
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.
Existing home sales, as reported by the National Association of Realtors (NAR), increased 3.2% in September and were up 0.6% from the same month a year ago, as first-time buyers seized a 34% share of sales. Total existing home sales in September increased to a seasonally adjusted rate of 5.47 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly adjusted 5.30 million units in August. Investing in real estate is a profitable business. If you are a self-employed real estate investor who is willing to add properties to your portfolio, consider working with HARD MONEY LENDERS BOSTON – INVESTORS CHOICE LENDING.
September existing sales increased in all four regions, ranging from 5.7% in the Northeast to 0.9% in the South. Sales increased by 5.0% in the West in September, despite a 5.3% decrease in the August PHSI for that region. Year-over-year, September sales increased by 2.3% in the Midwest and 1.6% in the West, while falling 0.9% in the South. The Northeast remained unchanged year-over-year for September.
Total housing inventory increased by 1.5% in September, but remains 6.8% lower than its level a year ago. At the current sales rate, the September unsold inventory represents a 4.5-month supply, compared to a 4.6-month supply in August.
The August all-cash sales share was 21%, down from 22% in August and 24% during the same month a year ago. Individual investors purchased a 14% share in September, up from 13% in August and a year ago. The September first-time home buyer share of 34% was up from 31% in August, and 29% from the same month a year ago. Distressed sales, comprised of foreclosures and short sales, fell to 4%, the lowest rate since NAR launched that series in 2008.
The September median sales price of $234,200 was 5.6% above the same month a year ago, and represents the 55th consecutive month of year-over-year increases. The median condominium/co-op price of $222,100 in September was up 6.1% from the same month a year ago.
Sales of new single-family houses in the United States declined 1.9 percent to a seasonally adjusted annual rate of 563,000 in October of 2016, compared to market expectations of a 0.3 percent rise. Figures for the previous month were revised down by 19,000 to 574,000. New Home Sales in the United States averaged 651.70 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.
Sales of new single-family houses in the United States rose 3.1 percent to a seasonally adjusted annual rate of 593,000 in September of 2016, compared to market expectations of a 1 percent decline. Figures for the previous month were revised down by 34,000 to 575,000. New Home Sales in the United States averaged 651.94 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.
Home affordability is at the worst level in seven years, with 24% of the U.S. county housing markets less affordable than their historic affordability averages in the third quarter, the most recent ATTOM Data Solutions Home Affordability Index for third quarter 2016 recorded.
This level is not only up from 22% of markets in the previous quarter, but it is up from 19% of markets a year ago.
The only other time affordability came in worse than this was in third quarter of 2009 when 47% of markets were less affordable than their historic affordability averages.
The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3% down payment — including property taxes and insurance.
“The improving affordability trend we noted in our second quarter report reversed course in the third quarter as home price appreciation accelerated in the majority of markets and wage growth slowed in the majority of local markets as well as nationwide, where average weekly wages declined in the first quarter of this year following 13 consecutive quarters with year-over-year increases,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.
“This unhealthy combination resulted in worsening affordability in 63% of markets despite mortgage rates that are down 45 basis points from a year ago.
According to the report, out of the 414 counties analyzed in the report, 101 counties (24%) had an affordability index below 100 in the third quarter of 2016, meaning that buying a median-priced home in that county was less affordable than the historic average for that county going back to the first quarter of 2005.
Key counties highlighted include: Harris County (Houston), Texas; Kings County (Brooklyn), New York; Dallas County, Texas; Bexar County (San Antonio), Texas; and Alameda County, California in the San Francisco metro area.
Despite the negative news, Blomquist did point out one positive area.
“Some silver lining in this report is that affordability actually improved in some of the highest-priced markets that have been bastions of bad affordability, mostly the result of annual home price appreciation slowing to low single-digit percentages in those markets,” Blomquist continued.
He explained that this is an indication that home prices are finally responding to affordability constraints — a modicum of good news for prospective buyers who have been priced out of those high-priced markets.
This infographic from ATTOM Data Solutions shows the U.S. home affordability affliction and some possible antidotes.
How has the housing market changed since the recession? A new report by Apartment List paints a less-than-positive picture for renters. In the aftermath of the mortgage crisis, many of the costs of homeownership have gone done, even as homeownership rates reach record lows. At the same time, costs associated with renting have risen at a time when more and more Americans are renting apartments and single-family homes.
While homeownership rates have reached historic lows across the country, hitting numbers not seen since the ‘60s, three particular areas and demographics have seen the biggest loss. According to the Apartment List analysis of Census data, the recent downturn really hit those living in Sunbelt Cities (Las Vegas, Orlando, Atlanta), Americans under 45 years of age, and Hispanic and African-American consumers.
In fact, minorities experienced the largest drops in homeownership: Hispanics (-4.0%), African Americans (-5.5%), and other minorities (-6.7%). Non-Hispanic whites were somewhat less affected, with a homeownership decline of -3.3%.
While a drop in the national homeownership rate has serious implications for long-term financial health, those who do own are often reaping the benefits of lower costs, especially compared to renters. Historically low interest rates mean monthly payments have dropped 13% since 2007. That can really add up: the median monthly mortgage payment is $2,754, but widespread refinancing has cut that to $2,263, a savings of roughly $6,000 a year. With median household income at $54,000 in 2014, that extra money can provide a significant boost.
The story is much different for renters. Rents have increased an average of 3.7% nationwide, exacerbating differences between owners and renters. For instance, in Houston, homeownership costs have dropped $289 since the Recession, while the cost to rent has risen by $115.
The median national rent increased from $901 to $934. While $33 may seem small, held up against a steep 14% drop in inflation-adjusted income for renters, and it becomes much more significant.
Like many aspects of the U.S. economy in the last decade, the stratification of the housing market may only increase inequality. Those with the money to buy are reaping the advantages of historically low costs, while those who can’t, especially Millennials and minorities, are being locked out and missing out on a chance to build household wealth.
Home prices in 20 major U.S. metro areas rose 0.8% in June from the month prior on a non-seasonally-adjusted basis, according to the S&P/Case-Shiller home price index. From the same period a year prior, prices saw a 5.1% increase, below the expectations for a 5.2% rise