“Pending sales bounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract.”
“The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing cost. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.” (emphasis added)
“While it's not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”
“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”
“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”
“It's likely that you'll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you'll be glad you did your homework first to understand how much you can afford. Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”
Author: Timothy McNally in Daily Dose, Data, Headlines, News, Secondary Market January 26, 2017 0
The downward slope of mortgage rates has seen a shift in the opposite direction, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS).
The average 30-year and 15-year fixed-rate mortgages experienced upward movement for the first time in 2017. The 30-year fixed rate mortgage averaged 4.19 percent for the week ended January 26, 2017, rising from 4.09 percent in the previous week. During this time last year, the average 30-year rate was hovering around 3.79 percent.
The 15-year rate averaged 3.40 percent, up from 3.34 percent the previous week and higher than 2015’s 3.07 percent during the same time-period. The report notes that the 30-year rate increase exactly matched the 10-year Treasury yield increase of 10 basis points.
“This week marks the first increase in the mortgage rate since December 29,” stated Freddie Mac chief economist Sean Becketti. He does not expect the higher mortgage rate to cause any significant downward movement in housing prices.
In fact, the shortened supply of homes for sale should keep home prices relatively high for the foreseeable future. “The 2.8 percent decline in existing home sales in December is a reminder of the lack of homes for sale. According to the National Association of Realtors, supply is at its lowest level since 1999, a factor that should support higher house prices regardless of the oscillations of the mortgage rate."
The movement in the rate should not be taken as sign of a continual trend, as the ongoing volatility will likely continue for some time. “Rates have been rather volatile since November, and such moves are not that unusual,” noted HSH.com VP Keith Gumbinger.
Gumbinger goes on to state that “it's a reasonable bet that headlines of higher mortgage rates won't be exactly welcomed by homebuyers or homeowners looking to refinance,” but he doesn’t think that the increase in the rate will have a meaningful effect on borrowers who are in the process of buying a home, as the costs incurred due to the increase are rather minimal.
“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”
“The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.”