The
Markets. Rates increased in the past week, but this data was released before
the effects of the budget settlement were factored into the equation. Freddie
Mac announced that for the week ending October 17th, 30-year fixed rates
increased to 4.28% from 4.23% the week before. The average for 15-year loans
also rose slightly to 3.33%. Adjustable rates were mixed, with the average for
one-year adjustables falling slightly to 2.63% and five-year adjustables
increasing slightly to 3.07%. A year ago 30-year fixed rates were at 3.37%.
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac --
"Rates edged up leading to the federal budget deadline this week. Recent
confidence measures depict some of the effects of the government shutdown and
uncertainty of the budget impasse. For instance, consumer sentiment in October
fell for the second straight month to the lowest reading since January,
according to the University of Michigan. Similarly, October's homebuilder
confidence fell to a four-month low. However, despite these downturns in
confidence, applications for home loans rose for the second consecutive week as
of October 11th, elevated by increases in applications for refinancing."
Rates indicated do not include fees and points and are provided for evidence
of trends only. They should not be used for comparison
purposes.
Current Indices For
Adjustable Rate Mortgages
Updated October 18, 2013
Updated October 18, 2013
|
|
Daily Value
|
Monthly Value
|
|
|
Oct 17
|
September
|
|
6-month Treasury Security
|
0.08%
|
0.04%
|
|
1-year Treasury Security
|
0.13%
|
0.12%
|
|
3-year Treasury Security
|
0.61%
|
0.78%
|
|
5-year Treasury Security
|
1.35%
|
1.60%
|
|
10-year Treasury
Security
|
2.61%
|
2.81%
|
|
12-month LIBOR
|
|
0.653% (Sept)
|
|
12-month MTA
|
|
0.144% (Sept)
|
|
11th District Cost of
Funds
|
|
0.956% (Aug)
|
|
Prime Rate
|
|
3.25%
|
Fannie Mae has announced that their guidelines are changing pursuant to
requirements for "Qualified Mortgages" as outlined in the Dodd-Frank Act. What
does that mean for the average homebuyer? While there are many changes included
within these new requirements some of the most important adjustments include the
end of Fannie Mae's 40-year amortization, interest only and three percent down
payment programs. In addition, the requirements for qualification for adjustable
rate mortgages have been tightened up as well. The elimination of the three
percent down payment option removes an important alternative for those who have
limited resources for a down payment and do not want to pay the increased
mortgage insurance required of a Federal Housing Administration (FHA) mortgage.
With the rise in rates this year, 5/1 adjustables have become more popular as
well. These new requirements are to go into effect on November 16. If you
or your real estate client's are thinking about purchasing and will be
considering an adjustable or a low down payment loan, you should consider acting
now as applications must be fully executed by this November date. Contact us for
an evaluation of the best low-down payment alternative before this option is
taken off the table.
The nation's foreclosure inventory continues a
precipitous decline, falling 33 percent year-over-year in August, according to
CoreLogic’s August National Foreclosure Report. About 939,000 homes were in some
stage of foreclosure, down from 1.4 million in August 2012. “The foreclosure
inventory continues to improve, as exhibited by these recent numbers,” says Mark
Fleming, CoreLogic's chief economist. “A surge in completed foreclosures and a
rise in the foreclosure inventory is unlikely given continued house-price
improvements and shortages of supply in many markets.” The foreclosure inventory
in August represented 2.4 percent of all homes with a loan compared to 3.3
percent in August 2012. Shadow inventory is another threat that is starting to
recede. The residential shadow inventory in August fell to its lowest level
since August 2008 to 1.9 million homes. That represents a 3.7-month supply and
is down 38 percent from its 2010 peak of 3 million homes, according to
CoreLogic. "Over the past year, the value of the U.S. shadow inventory dropped
by $87 billion, a sign of increased normalcy in the housing market,” says Anand
Nallathambi, president and CEO of CoreLogic. “With a year-over-year decrease of
22 percent in July, the shadow inventory has now declined steadily for 10
consecutive months.” In August, the number of completed foreclosures fell 34
percent year-over-year. Completed foreclosures, however, are still high by
historical levels. Prior to the housing crisis, completed foreclosures — the
total number of homes actually lost to foreclosure — averaged 21,000 per month
between 2000 and 2006. In August, they were at 48,000. Since the financial
crisis began in 2008, about 4.5 million homes nationwide have been lost to
foreclosure. Source: CoreLogic
Sixty-five percent of the millennial generation, ranging
in age roughly from 18 to 34, say that their intention to purchase a house has
significantly increased in the past year, according to a survey from PulteGroup.
“As the economy continues to stabilize, more young adults will wean off of mom
and dad and start to live on their own, spurring added economic growth." Nearly
20 percent of men ages 25 to 34 reportedly live with their parents, while 9.7
percent of women that age still live at home. As this generation gains greater
financial security, more millennials will begin to embark on their own. A recent
article from Barron’s notes that Generation Y could surprise the nation in
upcoming years with their spending power and economic growth. The generation is
7 percent larger than the baby boom generation. "Millennials have witnessed the
housing boom and bust, but still believe home ownership is a good investment,"
says Fred Ehle, vice president for PulteGroup. Source:
HousingWire
Jane Crawley - Prosperity Mortgage
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