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Posts Tagged ‘Mortgage rate’

U.S. Existing Homes Sales Reach Highest Level in Nine Years

December 23rd, 2016 Comments off
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Credit: Housely.

Data from the National Association of Realtors (NAR) shows that Americans bought homes in November at the fastest pace in nearly a decade.

Sales of existing homes rose 0.7 percent last month to a seasonally adjusted annual rate of 5.61 million housing units.

That was up from a downwardly revised 5.57 million in October and the highest since sales hit a 5.79 million pace in February 2007. Sales were up 15 percent from a year earlier.

While the news was good, potential challenges loom.

A deepening shortage of houses, higher prices and rising mortgage rates could present problems for the conventional housing market in the next year.

We have a housing shortage,” said Lawrence Yun, the chief economist for NAR. “We are not building enough housing.

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Lawrence Yun. Credit: The Business Journals.

As the Daily Business News previously reported, 76 percent of builders indicated availability of labor and cost as their major problems.

While home sales rose 8 percent in the Northeast and 1.4 percent in the South, sales were down in the West and Midwest.

Less than 1.9 million homes were on the market, down 9 percent from a year earlier. The tighter supply of homes pushed the median price up to $234,000, an increase of almost 7 percent from a year ago.

With the increase in sales activity, the rate on the benchmark 30-year fixed rate mortgage last week rose to a 52-week high of 4.16 percent.

According to ABC News, U.S. interest rates have been climbing since the November 8th election of Donald Trump, and investors have bid rates higher because they expect Trump’s program of tax cuts and higher spending on defense and infrastructure will boost economic growth and inflation.

The NAR is predicting that the combination of higher rates and declining affordability of conventional housing in many parts of the country likely will lead to only a small gain in sales of existing homes next year — an estimated 2 percent increase to about 5.52 million.

Conventional Housing Challenges = Manufactured Home Opportunities?

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Even figuring in the cost of land, manufactured homes are clearly a bargain, yet equal only some 1% of the total housing market. Graphic credit: MHProNews.

While manufactured home sales are about 1 percent of the total of all U.S. housing sales (new, existing, manufactured, etc.), they represent one of the most effective ways to deliver a quality, affordable solution in a difficult housing market.

Some prospective buyers are going to be straining to get to an affordable monthly payment with mortgage rates higher and may take a harder line on prices (or settle for less home) to make the numbers work,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

Therein lies the opportunity for manufactured housing, so long as challenges such as discriminatory zoning are dealt with.  See a related report, linked here.

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For Masthead commentary on how HUD Secretary nominee, Dr. Ben Carson, could help ease the affordable housing and save taxpayer’s money by enforcing existing law, click here. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

CNBC says 5 to 6 Million Renting Should Own – Affordability = Credit Access, Rates & Price

August 27th, 2014 Comments off

credit-comstock-getty-cnbc-posted-daily-business-news-Tim Rood with the Collingwood Group was part of a CNBC discussion that pointed to factors that manufactured home professionals relate to: the many – and often competing – dynamics that cause someone to buy a home or stay in a rental. Elements such as price and interest rates, CNBC’s Diana Olick  tells MHProNews,  along with knowledge of options, down payments and access to credit all impact prospective home buyers.

Olick says, “There has long been a saying in the real estate market that potential homebuyers don’t buy according to the home price or the mortgage rate. Instead, “they buy the monthly payment.” The monthly payment is, of course, a combination of rate and price, but the weight of each can change dramatically.”

Olick described factors in the last boom and bust: “For example, home prices were able to soar uncontrollably during the last housing boom only because risky mortgage products at the time made monthly payments minuscule and down payments often nonexistent.”

MH professionals know that well intended, ‘corrective’ regulatory hurdles imposed by the Consumer Financial Protection Bureau (CFPB) and/or states have in many cases harmed sales that would have taken place otherwise.  

For example, when a community operator or private money investor is willing to lend at a rate that still yields an affordable payment, but fails to fit the peghole regulators established, would-be sales are lost. This in turn keeps factories from building homes that would otherwise have been ordered by MH retailers, developers and communities to fill demand.

If Rood is correct, 5 to 6 million potential home sales represent a huge economic stimulus that would create millions of jobs. As demand on rentals would ease, monthly rates could be mitigated and housing affordability for millions more would improve.

Manufactured housing professionals can point to facts found in the recent GAO study which cites the lower monthly payment MH enjoys, combine it with stories of affordable quality living, to tap into more sales, to sway more opinion leaders and public officials.

“It never ceases to amaze me how hung up mortgage borrowers can be on rate,” said Matthew Graham of Mortgage News Daily. “In fact, a lot of times we have to remind them that the .125 percent difference in rate only amounts to X dollars and they’re surprised.” ##

(Image credit: Comstock/Getty/CNBC)

(Editor’s Note: A chart by FannieMae, published in this article here, underscores the relationship of price, rate and affordability for manufactured housing.)

 

Rising Mortgage Rates=an Improved Economy?

September 12th, 2013 Comments off

Mortgage applications fell 13.5 percent from last week, and the 30-year fixed-rate mortgage rate rose from 4.51 percent to 4.57 percent this week, according to HousingWire. Mortgage Bankers Association (MBA) reports the Refinance Index fell 20 percent from the previous week, and 71 percent from the week of May 3. Noting refinance applications are the first to drop when mortgage rates rise, Trulia‘s Chief Economist Jed Kolko says, “Recent history shows that spiking mortgage rates take a big chomp out of refinancing immediately and smaller nibbles out of sales three months later. Longer term, the impact of rising rates is typically offset by stronger economic growth.” The National Association of Realtors (NAR) says pending home sales fell 1.3 percent in July, and that is partly seasonal, but levels are still high. As MHProNews has learned, this is the bottom line: Over the last 15 years, a rise in mortgage rates correlated with an improved economy.

(Image credit: HousingWire)

More Home Buyers Purchasing Property All Cash

September 2nd, 2013 Comments off

american_cashThe tougher standards for mortgage lending – a result from Dodd-Frank – combined with rising mortgage rates has made it difficult for many buyers to get loans. This has lead to more all-cash deals on home buying. RealtyBiz tells says recently data released by RealtyTrac shows that 40% of home sales in July 2013 were made “all cash,” without a loan. This compares with 35% in June, and 31% in July last year. ##

(Image credit: WikiCommons )

 

Historic Lows for Mortgages

September 21st, 2012 Comments off

Theolympian tells MHProNews Freddie Mac says the average on a 30-year fixed rate mortgage (FRM) fell to 3.49 percent from 3.55 percent last week, matching its lowest rate since long-term mortgages began in the 1950’s. The 15-year FRM dropped to its lowest rate ever, 2.77 percent, from 2.85 percent last week, and below its previous record low of 2.80 percent. The Federal Reserve’s announcement last week that it will buy bonds likely pushed the mortgage rate lower, as the Fed attempts to further stimulate the housing market and the economy as a whole.

(Image credit: bankrate)

Rising FHA Insurance Raises Effective Interest Rate

August 30th, 2012 Comments off

Ronnie Richards of American Homestar Corp. tells MHProNews a report by HousingWire reveals while mortgage rates have hit record lows since the beginning of the year, the effective interest rate has not changed because the Federal Housing Administration (FHA) raised its insurance premiums due to its troubled emergency insurance fund, according to Dan Green of Waterstone Mortgage. On his blog, Green points out as a federal agency FHA has to maintain $2 in reserve for every $100 it insures. As default claims rose between 2007 and 2011, the well was tapped so often that by Nov. 2011 FHA had only $0.24 per $100 insured, and had to raise premiums four times in the last year. The 0.50 annual mortgage insurance premium (MIP) of 2008 has risen to 1.50 in some high-cost cities, resulting in an “effective interest rate” of 5.50% based on a 30-year fixed rate loan with a mortgage rate of four percent. The good news, notes Green, is that MIP is temporary.

(Image credit: Federal Housing Administration)

MH Business Booming in Boise

August 22nd, 2012 Comments off

he Idaho Statesman reports from Boise’s Adam Hiaring, assistant manager at a Clayton Homes dealership, that customers have been able to buy a house on layaway, saving up a down payment while locking in the price and mortgage rate, since March of this year. Hiaring says sales have been good because of the shortage of homes for sale in the Treasure Valley, noting a customer could have the land and a home to set on a foundation for around $120,000. “Right now, business is as good as it’s been in five or six years,” he says. “Sales are up 300 percent over last year.” He says he has sold 49 homes this year, and that Clayton will lock in a rate of four to 4.25 percent on a 30-year mortgage with a 3.5% down payment. “All money is refundable if the customer doesn’t go through with the home purchase.” In addition, buyers of Energy Star homes will receive a $500 credit from Idaho Power. MHProNews understands Clayton Homes is the largest producer of manufactured homes in the country.

(Image credit: Clayton Homes)

New Record Low

May 31st, 2012 Comments off

Benzinga tells us the mortgage rate has found another hole that it has fallen through to a record low, as the 30-yr. fixed rate has hit 3.78% and the 15-yr. Fixed rate plunged to 3.08%, according to Bankrate. Still, the reticence of would-be buyers due to job insecurity, tight credit, and unstable home values weighs stronger than the low interest draw, and it has become “politically correct” to now rent. As such, the number of mortgage applications dropped the week ending May 25 by 1.3%.

(Image credit: Marksman)

Originations for the Year?

May 9th, 2012 Comments off

While Michael Fratantoni, vice resident of research for the Mortgage Bankers Association (MBA) is predicting under $1.1 trillion in new loans this year, NationalMortgageNews, the article’s source, projects originations will be $1.3 trillion, 18% higher than MBA’s. As refinancings continue to slide, says Fratantoni, he is expecting purchase loans to rise from the $404 billion of 2011 to $682 billion this year and an expected $702 billion in 2013. He cautions that it all hinges on the mortgage rate.

(Image credit: PhotoBucket)

Freddie Mac Provides Economic Outlook

January 19th, 2012 Comments off

Freddie Mac LogoFreddie Mac released today its U.S. Economic and Housing Market Outlook for January this week showing that while the economy is undoubtedly in a better place than the same time a year ago, a speedy recovery still seems unlikely this year. “With the new year comes a sense of cautious optimism,” says Frank Nothaft, Freddie Mac, vice president and chief economist. “There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery. But the economy still is giving some mixed messages.” According to the survey economic growth will likely strengthen to about 2.1 percent in the first quarter; the current U.S. unemployment rate of 8.5 percent is likely to increase after seasonal gains are reversed; mortgage rates are projected to remain very low, at least in the beginning of 2012; home sales are expected to grow between two and five percent year-over-year and the housing-market recovery will be delayed as long as there remains a large gap between buyer and seller sentiment. Also this week Freddie Mac announced the 30-year fixed-rate mortgage edged down slightly to 3.88 percent to a new all-time record low marking the seventh consecutive week below 4.00 percent.

(Image Credit: Freddie Mac)