Daily Archives: November 3, 2016

Mortgage rates average 3.54% | Bedford Hills Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates increasing to their highest level since late June.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.54 percent with an average 0.5 point for the week ending November 3, 2016, up from last week when it averaged 3.47 percent. A year ago at this time, the 30-year FRM averaged 3.87 percent.
  • 15-year FRM this week averaged 2.84 percent with an average 0.5 point, up from last week when they averaged 2.78 percent. A year ago at this time, the 15-year FRM averaged 3.09 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.87 with an average 0.4 point, up from last week when it averaged 2.84 percent. A year ago, the 5-year ARM averaged 2.96 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.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“A jump last week in the PCE — the price index tracked most closely by the Fed — raised the prospect that inflation might not be completely dead after all. Investors reacted by driving the yield on the 10-year Treasury to its highest point since June. The 30-year mortgage rate jumped 7 basis points to 3.54 percent, the largest 1-week increase in over six months.”

Schiller: Always reason to worry about housing prices | Waccabuc Real Estate

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US home price gains slowed slighting in July, as many on Wall Street are speculating that the Federal Reserve will raise rates before the end of the year. The S&P/Case-Shiller 20-City Composite Index rose 5.0% year-over-year, missing analysts’ expectations of a 5.1% increase but still above the 4.8% pace of the prior two years.

The recent surge in real estate demand has pushed home prices near their pre-crisis peak in 2006, which is making it increasingly difficult for new home buyers to enter the market. Home sales fell 0.9% in August from the previous month, according to the National Association of Realtors. That’s the second straight month of declines.

Higher home prices have begged the question by many as to whether the current pace is sustainable, or if there’s reason to fear another massive collapse in real estate.

“There’s always reason to worry [about a coming collapse],” Robert Shiller, Nobel Prize–winning economist and co-creator of the S&P/Case Shiller Index, told Yahoo Finance’s Seana Smith in the video above. But he is quick to point out one stark difference between today’s housing market and that of 2006. “We’re in a holding pattern right now … People are less excited about buying because they themselves don’t believe [home prices] will be going up a lot. Back in 2006, when the homeownership rate was setting records, people had extravagant expectations.”

His comments on Americans’ hesitation to buy echo the findings of a recent study byPulsenomics, which found that just 38% of renters surveyed think now is a good time to buy. Today, home values have reached or surpassed peak levels in about a quarter of US markets.

How rising rates could impact the housing market

While prospective buyers continue to benefit from relatively low borrowing costs, the big question is whether a series of rate hikes will increase mortgage rates and prompt a fallout in the housing sector. Fed funds futures suggests a roughly 57% chance of higher US interest rates by December, according to data from CME Group.

Shiller says it’s very difficult to forecast how the housing market will react to rising rates but is quick to point out that even in an uncertain environment, rate hikes shouldn’t be a factor for potential buyers.

“The Fed raised [rates] in December just a quarter of one percent, and plausibly they’ll raise [rates] by another quarter or a half percent, and it may not be a big deal,” said Shiller. “On the other hand, it might be a big deal because we’re in this strange period of near zero interest rates, and if people see it as a major turning point, it could affect home prices … My opinion is if you want a house, go out and buy it. It’s not an extremely unusual time. There are always risks.

read more…

http://finance.yahoo.com/news/robert-shiller-theres-always-reason-to-worry-about-a-coming-collapse-in-housing-124331739.html