Rates Jump Again

Fixed-rate mortgages increased again this week, 

'The U.S. weekly average 30-year  fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week.

Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed. The 30-year fixed mortgage rate is up 33 basis points since the start of the year.

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.6 point for the week ending February 8, 2018, up from last week when it averaged 4.22 percent. A year ago at this time, the 30-year FRM averaged 4.17 percent. 
• 15-year FRM this week averaged 3.77 percent with an average 0.5 point, up from last week when it averaged 3.68 percent. A year ago at this time, the 15-year FRM averaged 3.39 percent. 
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.57 percent this week with an average 0.4 point, up from last week when it averaged 3.53. A year ago at this time, the 5-year ARM averaged 3.21 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 makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide.

Rent or Buy?

Welcome to the tortured, modern American real estate 

soliloquy: to buy or not to buy? For millions of urban and suburban dwellers alike, that is the question. And it's a tough one: 

As home prices keep nudging higher, so do rents, which don't provide any equity. 

You've calculated your assets and earnings. You've nailed down your lifestyle costs to the penny. You've zeroed in on the area where you want to put down roots. 

And you're totally down with the wholeAmerican Dream of home ownership, tired of flushing away buckets of cash each month with nothing to show for it. But can you afford this? Saving up for that down payment and monthly mortgage can be an intimidating feat, especially for all those first-time buyers burdened with student loan debt. 

That's why renters across the country look around and wonder: Does it makes more financial sense, at this point in time, to rent rather than buy a home?  

We learned that homeownership isn't always the best bet. It all depends on how much money you're making compared to your expenses, what your plans and financial goals are, and, most importantly, where you plan to buy.

'Homeownership is the opportunity to build wealth. It also helps people be more stable.'  'If there's a recession and you lose your job for a year, then people can take out a home equity loan and get through the hard times.' But the entry costs can be prohibitive.

Our calculations also don't factor in the costs of down payments or annual maintenance. And they don't include home appreciation, which makes the investment worth more as the years go by. Rule of thumb: You should plan on staying in your home for at least five to seven years, to build enough equity to cover sales costs.

source: Realtor.com

Home Prices Continue to Rise

More Is Predicted for 2018, Home buyers on a budget may want 

to have a seat and take a few deep breaths. Home prices around the country are continuing to surge—and they're not likely to slow down any time soon.

They shot up 6.6% year over year in December, according to CoreLogic's most recent Home Price Index and Home Price Forecast. 

The real estate data company predicts prices will continue climbing, increasing an additional 4.3% by the end of 2018.

And Mortgage rates are steadily rising, Heading into the spring buying season, the supply of homes remains at record lows, which presses home prices higher throughout the country. 'Rising income and consumer confidence has increased the number of prospective home buyers 

The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices. (Overvalued markets are where prices are at least 10% more than typical, sustainable levels.) An additional 28% were deemed undervalued, while 37% were priced just right.

The priciest markets are still in the Western swath of the nation, and prices are still going up. The cost to buy a home in December surged 11.2% over the year before in the Las Vegas metro; 10.1% in the San Francisco metro; and 8.1% in the Denver metro. That adds up.

'There's such a lack of inventory,'and 'People are paying above appraisals.'

The states with the biggest annual price jumps were Washington, at 12%; Nevada, at 11%; and Idaho and Utah, at 10.7%. Rhode Island and California both saw 8.2% increases, while prices were up 8.1% in Maine and 8% in Colorado.
Alaska had the smallest bump, at 1.6%, followed by 1.7% in Oklahoma and 1.9% in Connecticut.

Am I Eligible for a VA Loan?

Buying Costs Veterans and Active Military Should Keep in Mind, For veterans and active military, VA 

loans are a great way to achieve the dream of homeownership. More than 22 million service members have used these flexible, no down payment loans since 1944.

But when people hear “no down payment,” they often don’t realize they'll still need some cash on hand to finish the deal.

“Zero down does not mean zero to close,” points out 
The good news is that buyers don’t have to go in blindly: Your VA loan-savvy real estate agent will be your ally in helping you estimate the costs you will need throughout the process, no matter where you live.

“Our goal is to save veterans money and get them into a home that they’re happy with,” says Realtor® 

While the amount you need to close will vary according to your location and situation, experts say you can usually expect to need about 3% of the purchase price on hand to close.

Want to break it down? Here are some home-buying costs that veterans and active military shouldn’t overlook.

1. Credit report

Buyers will often pay this fee, which runs, on average, about $30, to their lender when they first apply for a loan. Be aware that this fee is nonrefundable even if the loan doesn’t close.

2. Earnest money

The earnest money deposit is key to the home-buying process. It essentially allows you to put a 'hold' on a house while you conduct the inspections and appraisal. Without earnest money, you could theoretically make offers on many homes, essentially taking them off the market until you decided which one you liked best. As the name suggests, it shows that you are earnest about moving forward on the purchase.
“The seller wants that buyer to have some money in the game when they take the house off the market,” Chubirko explains.

Depending on where you live, you can expect to put down anywhere from 1% to even 10% of the home’s purchase price as earnest money. (In some highly competitive markets, buyers are making even larger deposits in an effort to stand out.)

But don't worry! Whatever you put down for earnest money will go toward your down payment and closing costs as soon as the deal goes through. (If the deal falters, you could lose some or all of your deposit, depending on the reason why the agreement tanks.)

3. Appraisal

All VA loans require an appraisal to ensure the property is up to acceptable standards and meets the VA's Minimum Property Requirements. What does that mean? Well, an appraiser will calculate the square footage, confirm the property is worth the price you're offering, and that it's safe, structurally sound, and sanitary. Among other things, the appraiser will check for safe mechanical systems, acceptable roof life, and hazard-free basements and crawl space. VA buyers will often pay for the appraisal upfront, but they may be able to recoup the cost at closing.

4. Home inspection

While the appraisal is required, a home inspection is technically optional (except for a pest inspection, which is required in certain states and can cost roughly $50 to $150). But you never want to take a pass on the inspection, unless you're buying a tear-down (not with a VA loan!).

The home inspection is your all-too-crucial opportunity to uncover any problems with the house before you make it official. It's also your chance to point out repairs you can ask the seller to make on your behalf (and those repairs could cost much more than the inspection itself, which is going to run about $300 to $500.)

5. Recording fees

Recording fees must be paid out of pocket at the time of closing. This is the fee you pay the county to record your mortgage in the public record, and the cost varies from county to county.

6. Real estate transfer taxes

These costs vary by state—from none in Indiana, to a $2 flat fee in Arizona, to $2 per each $500 in value in New York. States, counties, and municipalities collect these taxes to transfer the title of the property from the previous owner to the new owner.

7. Title insurance

Title insurance protects you (and your lender) in the event there are title issues from previous owners of the home. The average cost of title insurance is around $1,000 per policy, but that amount varies widely from state to state and depends on the price of your home.

8. HOA fees

If you buy a home in an area where there is a required homeowners association, you will need to pay the application fee, which is variable depending on the local rules. Then there are your monthly dues. For a typical single-family home, HOA fees can cost homeowners around $200 to $300 per month, although they'll be lower or much higher depending on the size of your unit and the amenities.

9. Loan origination fees

An origination fee is one of several that will make up your closing costs. The VA allows lenders to charge up to 1% of the loan amount to cover origination, processing, and underwriting costs.

The bottom line? While VA loans are a great option for any veteran hoping to buy a house, being prepared before you apply will ensure no surprises throughout the process.

10 States Predicted to Have Strong Housing Markets

The housing market in the U.S. has experienced a major uptick 

over the past two  years. In 2016, existing home sales were the strongest they’ve been since 2006. More than a decade after the worst housing crisis in U.S. history, it seems we’re finally in a sustainable recovery period.

5. Utah Businesses continue to flock to many parts of this state, making for a booming housing market that’s set to continue into 2018.

The Provo/Orem region was recently ranked as the best-performing city by the Miliken Institute, thanks to a robust high-tech sector and broad-based job and wage growth. In Salt Lake City, the median home price averages $360,000, and the market is predicted to grow 3.2% in 2018.

As we enter 2018, the housing market shows no signs of slowing, and is slated to remain among the world’s top performers, according to a forecast from Fitch Ratings. U.S. home prices are expected to rise 4.6% this year.

Here are 10 states that are predicted to be among the top performers in 2018:

1. Nevada

Housing forecasts for Nevada suggest that the market will continue to be strong, and that home prices will continue to rise in 2018. The fact that the state is home to Las Vegas — where median home values are expected to rise approximately 5.8% over the next 12 months — accounts for much of the market strength. Home values in Sin City rose 8.6% during the most recent 12-month reporting period, according to S&P/Case-Shiller’s Home Price Index. The median home price is approximately $285,045.

2. Texas

Thanks to a booming economy, Dallas and many other areas in the Lone Star state have seen a boom in housing over the past several years. A steady flow of profitable companies continue to relocate, expand, or launch their businesses here, thanks to lower taxes and a lower cost of living. The median home price in North Texas is $339,950. In 2018, home sales are expected to grow by 6% in 2018.

3. Florida

Led by cities including Deltona and Lakeland, Florida will continue to see a strong housing market in 2018. With the appeal of oceanside living, warm weather, and the ability to live an active lifestyle, Florida’s most popular areas are expected to see a more than 5% boost. The median home price in Deltona, the state’s most-booming housing area is $275,050.

4. California

With the economy expected to continue growing statewide, housing demand is poised to remain strong into 2018. However, a shortage of available homes for sale and affordability constraints make it a more challenging market to get into for homebuyers. Those with top credit scores have a competitive advantage over the competition when it comes to securing a mortgage. One of the fastest-growing areas, Stockton, is predicted to grow its housing market by 4.6%, and the median home price there is $385,050. In the most desirable areas, would-be homebuyers have been largely squeezed out altogether. For example, the median price of a home in San Francisco has increased $100,000 in the past year.

6. North Carolina

North Carolina’s strong housing market is being largely driven by the amount of people relocating there from other states. Home sales are predicted to grow 6% in 2018, and the median home price averages $325,000. Charlotte is among the fastest-growing because it has capitalized on the popularity of mixed-use developments that surging in popularity across the country.

7. Colorado

The home of the Mile High City has seen some of the steepest price increases in housing of any other state in the U.S. over the past two years. While the market will remain strong, it is poised to level out a bit in 2018 to around 3.1%. Colorado Springs tops the cities for growth and the median home price there is slated to rise 5.7% this year.

8. Tennessee

In Nashville, the housing market will continue to flex its muscle in 2018. According to a Nashville Realtor, single-family homes in the city’s premier suburbs often fetch multiple offers above asking price “overnight.” Currently, the median home price hovers around $358,500.

9. Oklahoma

Oklahoma City boasts one of the strongest — yet affordable — housing markets as we move into 2018. That makes it an attractive option for those looking to secure a mortgage with a manageable payment. Home prices average $99,000 there, which a bit lower than the national average, and also lower than the statewide median home price of $116,800. Thanks to a lower cost of living, steady job economy, and low crime rate, the state will continue to stay at the top of the U.S. housing market this year.

10. Georgia

This “peach” will continue to be sweet in 2018. In a one-year period between July 2016 and July 2017, home values jumped 10%. Thanks lower median home prices of $218,350, and a smaller amount of home available for sale, we will continue to see a strong housing economy, particularly in and around Atlanta.

source: Realtor.com

Best Time to Sell in a Decade

Home Seller Profits at 10-Year High of $54,000 in Q4 2017, Prices are rising and homeowners are 

staying put longer, and that means more homeowners can cash in when they go to sell. Home seller profits surged to a 10-year high in the fourth quarter of 2017. Sellers saw an average home price gain since purchase of $54,000, up from $47,133 a year ago.

That $54,000 average seller profit represents an average 29.7 percent return on investment compared to the original purchase price. That is the highest average home seller return on investment since the third quarter of 2007, according to ATTOM Data Solutions’ Q4 2017 Home Sales Report, released this week.

“It’s the most profitable time to sell a home in more than 10 years, yet homeowners are staying put longer than we’ve ever seen,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”

Among the 155 metro areas that ATTOM Data Solutions’ tracked, the locales with the highest average home seller ROI were: San Jose, Calif. (90.9%); San Francisco (73.3%); Merced, Calif. (64.6%); Seattle (64.4%); and Santa Cruz, Calif. (59.8%).

Meanwhile, homeownership tenure set a new record high in the fourth quarter of 2017. Homeowners who sold in the quarter had owned their homes on average 8.18 years, up from 7.78 years in the fourth quarter of 2016. It is the longest average home seller tenure since ATTOM Data Solutions has tracked it starting in the first quarter of 2000.

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Fed Leaves Rates Unchanged, But Hikes Coming

Yun predicts that mortgage rates will reach 4.5 percent by the second half of the year.

The Federal Reserve voted on Wednesday to leave its interest rate unchanged, but it continues to leave the door open to future increases this year. The Fed’s rate will remain in the range of 1.25 percent to 1.5 percent, which is low by historical standards. .

Lawrence Yun, chief economist of the National Association of REALTORS®, predicts the Fed will still do three short-term rate hikes later this year—and that will have an impact on mortgage rates for home shoppers.

 “The series of rate hikes will nudge up mortgage rates, though not in one-to-one fashion,”Yun says. “Moreover, the Fed’s quantitative un-easing of selling the bonds and mortgage-backed securities into the market [after having purchased in recent years] will also force up longer-term interest rates, including mortgage rates.”

It hinted that a rate hike is likely at its next meeting in March. The Fed said the economy is growing at a “solid rate.” The economy grew at 2.3 percent in 2017, and many economists are expecting faster growth this year. The unemployment rate was at 4.1 percent in December 2017. “The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation,” the Fed said in a post-meeting statement.

Fed Chair Janet L. Yellen will end her four-year tenure at the end of this week. Jerome H. Powell, a Fed governor since 2012, has been named as her replacement.

Source: REALTOR® Magazine and “Federal Reserve Leaves Rates Unchanged,” The New York Times (Jan. 31, 2018)