Mortgage rates pull back ahead of Federal Reserve meeting

By Kathy Orton October 27

(Win McNamee/Getty Images)

After two weeks of spikes, mortgage rates retreated this week, falling back to where they had hovered most of the summer.
With long-term bonds trading in a narrow band, home loan rates likely have settled in ahead of the Federal Reserve meeting next week. While most observers do not expect the Fed to raise rates in November, they are anticipating a rate hike in December.
At the same time, the financial markets appear reluctant to make any moves ahead of the presidential election, which means mortgage rates are likely to hold steady at least until after Nov. 8.

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Bankrate.com, which puts out a weekly mortgage rate trend index, found that 80 percent of the experts it surveyed believe rates will remain unchanged in the coming week, moving less and plus or minus two basis points. (A basis point is 0.01 percentage point.)

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average tumbled to 3.47 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.52 percent a week ago and 3.76 percent a year ago. The 30-year fixed rate, which had jumped 10 basis points in two weeks, dropped back below 3.5 percent, where it has spent all but two weeks of the past four months.
The 15-year fixed-rate average slipped to 2.78 percent with an average 0.5 point. It was 2.79 percent a week ago and 2.98 percent a year ago.
The five-year adjustable rate average inched down to 2.84 percent with an average 0.4 point. It was 2.85 percent a week ago and 2.89 percent a year ago.

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“Mortgage rates continue to be relatively stable and at near record lows,” Sean Becketti, Freddie Mac chief economist, said in a statement. “The 30-year fixed-rate mortgage fell 5 basis points week-over-week to 3.47 percent, erasing last week’s increase. At the same time, the 10-year Treasury yield ended the week relatively flat – up about 2 basis points.”
Meanwhile, mortgage applications declined this week, according to the latest data from the Mortgage Bankers Association.

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The market composite index — a measure of total loan application volume — fell 4.1 percent from the previous week. The refinance index fell 2 percent, while the purchase index decreased 7 percent.
The refinance share of mortgage activity accounted for 62.7 percent of all applications.

Will California real estate experience the toughest year yet in 2017?

Projected to have lowest housing affordability in six years

KEYWORDS CALIFORNIA CALIFORNIA ASSOCIATION OF REALTORS CALIFORNIA HOUSING CALIFORNIA REAL ESTATE CAR

The trials that plagued the California housing market in 2016 aren’t expected to get too much better in 2017 as the real estate market is projected to face another year of supply shortages and affordability constraints, according to the "2017 California Housing Market Forecast" released by the California Association of Realtors.

CAR predicted that 2016 would face a shortage of available inventory and continued high costs that would limit the state’s improvement, a predication that ultimately came true according to the state’s real estate agents.

Affordability is only projected to get worse, which is currently already California real estate agents' No. 1 concern for the market.

"Next year, California's housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said CAR President Pat "Ziggy" Zicarelli.

However, he added, "The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales.”

“As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as homebuyers migrate to peripheral cities with more affordable options," said Zicarelli.

The CAR predicts existing home sales will modestly increase and rise 1.4% next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold. 

Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.

Interest rates aren’t estimated to change significantly, with the average 30-year, fixed mortgage interest rates to only rise to 4% in 2017, up from 3.6% in 2016.

Meanwhile, California home prices are forecast to slow down in pace, with the median home price to increase 4.3% to $525,600 in 2017, following a projected 6.2% increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.

The state’s overall U.S. Gross Domestic Product is projected to grow 2.2% in 2017, after a projected gain of 1.5% in 2016, while California's nonfarm job growth will rise 1.6%, down from a projected 2.3% in 2016.

"With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California's housing market posting a modest increase in 2017," said CAR Vice President and Chief Economist Leslie Appleton-Young.

"The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity," Appleton-Young continued.

Bobby Darvish of Platinum Lending Solutions offers best market rates for Residential & Commercial mortgage in California.

Mortgage rates hit lows not seen in three years

0-year mortgage rates hit 3-year low

April 14, 2016

Updated 11:30 a.m.

REGISTER GRAPHIC

What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.
RATE NEWS SUMMARY
From Freddie Mac’s weekly survey: The 30-year fixed rate improved again, averaging 3.58 percent. Even though that’s just 1 basis point lower than last week’s 3.59 percent, it was the lowest rate since May 2013.
By comparison, the all-time low in Freddie Mac’s records was 3.31 percent reported in November 2012.
The 15-year fixed likewise improved, dropping 2 basis points from last week’s average to 2.86 percent.
BOTTOM LINE: Assuming a borrower gets the average 30-year conforming fixed rate on a $417,000 loan, last year’s rate of 3.67 percent and payment of $1,912 was $21 more than this week’s payment of $1,891.
The Mortgage Bankers Association reports a 10 percent jump in loan application volume from the previous week.
WHAT I SEE: From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well qualified borrowers can get the following fixed rate mortgages for zero cost: A conventional 10-year loan at 2.875 percent, a 15-year at 3.0 percent, a 20-year at 3.50 percent, a 30-year at 3.625 percent, a high balance ($417,001 to $625,500) conventional 15-year at 3.25 percent, and a high-balance 30-year at 3.875 percent.

Bobby Darvish: Unexpected drop in mortgage rates offers buyers great opportunities

The unexpected sunk of mortgage rates offers buyers the opportunity to get a great deal at a lower cost than before, making sure that this spring becomes a busy season in the housing market.
Average rates on a 30-year fixed rate mortgage have dropped from 4.01 percent, in December, to 3.62 percent on Thursday, putting the figure near to the record-low rate of 3.35 percent in late 2012, according to the weekly survey by mortgage lender Freddie Mac.

Photo: Alamy/The Telegraph UK

Now interested buyers could be able to afford higher-priced homes or just save money from an already found house. Even renters could be persuaded to move up their plans for a purchase at a lower cost.
Lower mortgage rates came after economic experts predicted this year at the end of the record lower mortgage rates due to the Federal Reserve’s move to increase the cost of borrowing across the economy.
The issue that many did not see coming was that the decline in stocks prompted nervous investors to seek safety in government bonds, which drove up prices and kept yields low. Mortgage rates tend to track yields on 10-year Treasury bonds, as reported by Triblive.
Economics warnings led people to act on the forecast that 2016 will begin with higher interest rates. Many decided to take actions before the end of the year so they could save some money, Liljehom, a 38-year-old man from Portland, was one of them.
Liljehom decided to refinance his mortgage in December so he could take previsions due to the highlighted warnings, with only days to spare before the Fed raised rates.

“I could have saved more money if I had waited,” Liljehom said. “My interest rate is still quite low, but it does sting a little knowing it could have been lower.”

Mortgage rates may remain low

Rates are likely to stay low for a while, said Nela Richardson, chief economist for Seattle-based real estate broker Redfin. Global concerns over worldwide economic like a slowdown in China and low commodity prices continue to spook financial markets and may persuade the Fed to hold off on more rate hikes.
The more slowly the central bank removes that support, the more likely mortgage rates are to stay low. Inverstong is betting that the Fed will not raise its benchmark interest rate again when it meets next month. The Fed’s massive stimulus efforts over the past seven years drove mortgage rates to record lows.
The Mortgage Bankers Association lowered this month its forecast for the 30-year-fixed-rate of the year to 4.3 percent, a drop from the 4.6 percent they were expecting in January.