The 30-year fixed-rate mortgage averaged 2.98% this week, the lowest rate in Freddie Mac’s records dating back to 1971.
“The drop has led to increased home buyer demand and, these low rates have been capitalized into asset prices in support of the financial markets,” says Sam Khater, Freddie Mac’s chief economist. “However, the countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate, and this economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.”
Freddie Mac reported the following national averages with mortgage rates for the week ending July 16:
30-year fixed-rate mortgages: averaged 2.98%, with an average 0.7 point, falling from a 3.03% average last week. A year ago, 30-year rates averaged 3.81%.
15-year fixed-rate mortgages: averaged 2.48%, with an average 0.7 point, falling from last week’s 2.51% average. A year ago, 15-year rates averaged 3.23%.
5-year hybrid adjustable-rate mortgages: averaged 3.06%, with an average 0.3 point, rising slightly from last week’s 3.02% average. A year ago, 5-year ARMs averaged 3.48%.
Freddie Mac reports average commitment rates along with average fees and points to reflect the total upfront cost of obtaining a mortgage.
The new-home market is booming as states wind down sheltering-in-place restrictions, easing the search for a new home. Sales of newly built single-family homes last month jumped nearly 13% over 2019—that is the strongest May since 2007, according to newly released data from the U.S. Census Bureau.
However, while sales are rebounding, housing starts—the construction of new homes—posted a lackluster month, showing that builders are struggling to keep up with the quick resurgence in buyer demand. The strong rebound has caught builders off guard. Single-family housing starts in May were about 18% lower annually and building permits, a sign of future construction, was down about 10%.
Builders have a lot of catching up to do. The largest sales jump in May for the new-home sector was from homes that had not yet been started.
“Sales of homes not yet under construction are rising given capacity limitations in the building industry,” says Robert Dietz, chief economist at the National Association of Home Builders. “Due to labor and land constraints, homebuilders were already producing too few single-family homes given potential demand. As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction—a 20% year-over-year gain for such sales.”
Homebuilders are ramping up hiring to help meet demand.
“There has been a production deficit in housing,” Stuart Miller, chairman and former CEO of Lennar, told CNBC. “We are shelter-supply-constrained, and that supply constraint means that all forms of shelter are going to thrive in the current market and probably be sustainable for the next year or two.”
The median sales price in May for a new home was $317,900.
Regionally, new home sales in May saw the largest annual gains in the Midwest (up 9.5%) and Northeast (up 6.8%), followed by more muted upticks in the West (up 1.4%) and South (up 0.3%).
The new-home market is booming as states wind down sheltering-in-place restrictions, easing the search for a new home. Sales of newly built single-family homes last month jumped nearly 13% over 2019—that is the strongest May since 2007, according to newly released data from the U.S. Census Bureau.
However, while sales are rebounding, housing starts—the construction of new homes—posted a lackluster month, showing that builders are struggling to keep up with the quick resurgence in buyer demand. The strong rebound has caught builders off guard. Single-family housing starts in May were about 18% lower annually and building permits, a sign of future construction, was down about 10%.
Builders have a lot of catching up to do. The largest sales jump in May for the new-home sector was from homes that had not yet been started.
“Sales of homes not yet under construction are rising given capacity limitations in the building industry,” says Robert Dietz, chief economist at the National Association of Home Builders. “Due to labor and land constraints, homebuilders were already producing too few single-family homes given potential demand. As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction—a 20% year-over-year gain for such sales.”
Homebuilders are ramping up hiring to help meet demand.
“There has been a production deficit in housing,” Stuart Miller, chairman and former CEO of Lennar, told CNBC. “We are shelter-supply-constrained, and that supply constraint means that all forms of shelter are going to thrive in the current market and probably be sustainable for the next year or two.”
The median sales price in May for a new home was $317,900.
Regionally, new home sales in May saw the largest annual gains in the Midwest (up 9.5%) and Northeast (up 6.8%), followed by more muted upticks in the West (up 1.4%) and South (up 0.3%).
After all, pets have a big say in real estate. Eighty-one percent of Americans say animal-related considerations play a role when deciding on their next living situation, according to a 2017 report from the National Association of REALTORS®. Eighty-nine percent of those surveyed said they would not give up their animal because of housing restrictions or limitations. Twelve percent of pet owners have moved to accommodate their animal, and 19 percent said that they would consider moving to accommodate their animal in the future. REALTORS® surveyed said that one-third of their pet-owning clients often—or very often—will even refuse to make an offer on a home because it’s not ideal for their animal.
Pet ownership is booming across the country. Seventy percent of U.S. households own pets, up from 50 percent a generation ago, according to ProShares Pet Care ETF, an exchange traded fund focused on the pet care industry. Ninety-five percent of pet owners consider their pets part of the family, according to a Harris Poll.
“Dogs are part of the family, so it’s important to factor in our furry friends when choosing a place to live,” says Daryl Fairweather, Redfin’s chief economist. “Highlighting dog-friendly amenities like a spacious yard or a mudroom for dirty paws in your listing can make it easier for buyers to find the home of their dog’s dreams.”
What are some of the top pet-friendly amenities in homes? Real Trends recently highlighted several home essentials that buyers crave for their pets: ample outdoor space, pet nooks (like a tucked away nook with a built-in bed), a pet chat system (a way to communicate with your pet from anywhere using video or audio devices), pet washing stations (like in a mudroom or laundry room), and a pet door (a door insert so pet cans let themselves out and back in).
Some real estate professionals are adopting pet-friendly niches to express their love of pets, showing off their own pets on social media or even reaching out at dog parks with treats to connect with pets and their owners.
Redfin and Rover, a networking platform for pet sitters, recently ranked the top pet-friendly cities. They analyzed data from 14,000 cities based on popularity of dog walkers and pet sitters and how frequently the word “dog” appeared in online listing descriptions of homes for sale. The top pet-friendly cities (along with cities’ most popular breeds) are:
Even in cold, snowy, or icy weather, real estate professionals can do a lot to make a property more appealing to potential buyers. After all, 50 percent of real estate professionals surveyed say that staging a home before a sale increases the amount of an offer by from 1 to 10 percent—and that was regardless of the season, according to the National Association of REALTORS®’ “2017 Profile of Home Staging” report.
Here are a few tips for winter staging:
1. Turn up the heat. Make sure the temperature inside is cozy for enticing buyers to stay in the home longer.
2. Watch the smell. When a home is closed up for the winter and smells start to linger, it’s important tocreate scent appeal. Consider simmering cinnamon for a warming, pleasant aroma to increase a home’s attractiveness during colder months. Avoid air fresheners or other artificial scents that could make buyers suspicious, cautions an article from The Washington Post.
3. Don’t forget curb appeal. The grass may not be green and flowers may not be in full bloom, but that doesn’t meanan exterior should be neglected. Ensure leaves are swept away and branches are well trimmed, and look for ways to add color, such as an evergreen shrub in a pot. Also, tall grasses, like fountain grasses, tend to survive even in the harshest winters, and plants from the cabbage family can add a vibrant purple color to the curb.
4. Keep clear paths. If the ground is covered in snow, the simplest and most important thing you can do is shovel the driveway and sidewalks and keep the home’s patios and decks as clear as possible so buyers can get a sense of their true size.
5. Have mats for wet shoes. Place mats outside and inside to catch any dirt or snow from shoes.
6. Use lots of light. There’s less daylight in the winter months, so it’s even more important to keep all the lights on and open up blinds for natural light. Switch to brighter lightbulbs. Clean light fixtures. Keep the home well lit even when you’re not there so the home still looks inviting to passersby who see the home in the evenings.
Real estate indicators are starting to shift in favor of home buyers as the housing market sets its sights on spring. Mortgages are getting cheaper, housing inventories are growing, and home prices are rising at a slower pace.
Mortgage rates have been holding steady for the last few weeks. The 30-year fixed-rate mortgage averaged 4.45 percent last week, according to Freddie Mac. Late last year, mortgage rates were nearing the 5 percent threshold, but several weeks of decreases have offered some relief to home shoppers. The five-year adjustable-rate mortgage has been averaging under 4 percent, landing at 3.90 percent last week, Freddie Mac reports.
Home buyers are responding to the lower rates. New mortgage applications of home buyers across the country surged to the highest level since 2010 during the week ending Jan. 11, according to the Mortgage Bankers Association. Applications were 9 percent higher than they were the week before.
Housing inventories have grown significantly in many markets too, offering buyers a lot more choices. That is helping to put a tighter lid on home price growth as sellers face greater competition. Homebuilders are reportedly lowering their prices in many areas too. A quarter of newly built homes saw a price cut during the last quarter of last year.
The decrease in mortgage rates is likely to boost home sales this year, compensating for the decline in sales recorded last year while pushing prices up modestly, says NAR Chief Economist Lawrence Yun. “With the return of homebuyers, home prices look to rise again in 2019, but with one big difference. For the first time in years, income gains of a projected 3.5 percent will outpace home price growth of around 2 percent. That is healthy and a turn toward better housing affordability,” Yun writes in a Jan. 24 opinion piece in the newspaper The Hill.
Certainly, for home sellers, lower prices may not sound ideal. But housing analysts say sellers need to set a realistic price up front to find a buyer as the market shifts.
“The good news here for sellers is that—with interest rates down and slowing prices—more prospective buyers should be encouraged to get off the sidelines, shop around, and consider making offers,” writes Kenneth Harney, a syndicated real estate columnist for The Washington Post.
Borrowers may be able to lock in lower interest rates this week, as the 30-year fixed-rate mortgage dips to a 3.88 percent average.
“Rates came down slightly this week, ending a brief two-week streak of increases,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield dipped 6 basis points, while the 30-year fixed mortgage rate fell 3 basis points to 3.88 percent.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 19:
30-year fixed-rate mortgages: averaged 3.88 percent, with an average 0.5 point, falling from last week’s 3.91 percent average. Last year at this time, 30-year rates averaged 3.52 percent.
15-year fixed-rate mortgages: averaged 3.19 percent, with an average 0.5 point, dropping from last week’s 3.21 percent average. A year ago, 15-year rates averaged 2.79 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.17 percent, with an average 0.4 point, rising from last week’s 3.16 percent average. A year ago, 5-year ARMs averaged 2.85 percent.
An increase in burglaries during the summer months means it’s time to help safeguard your clients’ homes while they’re away for the season or absent while selling. Ooma, a smart home phone and security company, offers six tips for preventing break-ins.
Front door surveillance. Because 34 percent of break-ins happen through the front door of a home, recommend that your clients install a smart doorbell that routes to their phone. Other security options Ooma mentions include two-way speakers that will give visitors the impression the owner is home, or video cameras so your clients can see who’s at the door from their phone.
Secured windows. The second most common break-in location is a first floor window, the access point of 23 percent of burglars. Ooma recommends installing sash locks and wireless motion sensors that will alert the homeowner if a window is opened or broken.
Don’t forget the AC unit. Pushing in a window air conditioning unit is another common break-in method. Suggest motion sensors near the AC unit, or tell your clients to remove the unit while they’re away, Ooma says.
Barring patio and sliding glass doors. Sliding doors should not only be locked, but should also have a barrier bar in the tracks. Ooma suggests homeowners place motion detectors in this area as well.
Leave the lights on. The goal is to make the home appear lived in, even if your clients are vacationing or have already moved out. Ooma recommends smart lights that homeowners can control from their phone, or at the very least, light timers.
Call 911 from afar. A homeowner trying to reach the police from a remote location can take valuable minutes. Home security companies, including Ooma, offer remote 911 calling.
You’ve spent some effort — and some money — to dress up your home before putting in on the market: some fresh paint, maybe a few improvements to the curb appeal, stuff like that. It’s the first time you’ve tried to sell a house, so you want to do everything right.
The first open house draws a good crowd, but no offers, and your agent has brought a few more potential buyers through after the open house. Still nothing.
It could be that the market is just slow in your area or it could be that you’ve inadvertently made a simple rookie seller’s mistake. If it’s the former, you may just have to wait it out or sell at a fire-sale price. If it’s the latter, all you have to do is make some simple adjustments.
Here are eight rookie mistakes first-time home sellers often make and what you can do to avoid them.
Setting the price too high. The most common reason for failing to make the sale is that the home is overpriced. Listen to your agent recommendation and don’t fret if that recommendation is less than you had hoped for.
Failing to adjust the price. Don’t automatically reject an offer that is below your asking price, especially if your area is a buyer’s market. Make a counteroffer and see what happens.
Doing a poor cleaning job. The home needs to be spotless. Period. Hire a professional cleaning service and consider renting a storage space to store all the stuff that you can’t live without but that a potential buyer can.
Using lousy photos. Consider hiring a professional photographer to take pictures of your home to post online. According to Realtor.com, this can cost just $150 to $400 and is a good investment.
Leaving religious or political items in plain sight. In today’s polarized culture, you need to take particular care not to offend or distract any potential buyer. Remember, you’re trying to sell your home, not convert someone to your views.
Sticking around at the open house. This can make potential buyers reluctant to ask questions about the house or to peek into the cupboards and closets. The more “open” an open house is, the better it works for you.
Making it hard for the agent to show your home. The good news is that potential buyers may want to look at your home at a moment’s notice. That’s also the bad news. Get over it and make it easy for your agent to show the house on short notice.
Leaving your pets during a showing. Some people are afraid of even small dogs or are allergic to domestic animals. Take them with you when you leave, and make sure to put away all the leashes, toys and food bowls. A quick pass with a vacuum cleaner to remove pet hair is also a good idea.
The housing market has been off to a roar this spring. In fact, the market is performing so strongly that the National Association of REALTORS® has upgraded its forecast for the year.
At the start of the year, home sales were expected to match last year’s pace due to higher mortgage rates and diminishing affordability. But the market is hardly slowing down, notes Lawrence Yun, NAR’s chief economist. He now predicts existing-home sales to rise by 3.5 percent, and home prices likely will increase 5 percent this year.
Home sales are strong: Real estate professionals report an increase in foot traffic at listings and mortgage applications to buy a home remain above year-ago levels. Also, signed contracts to purchase a home are essentially running at decade highs, Yun notes.
“Not only are the buyers out in the market, but they are committing quickly,” Yun notes in a recent column for The Hill. “The typical days on the market for a newly listed property is short at only a month. A month’s supply of inventory is less than four months, which is well below the six to seven months that is considered more balanced.”
Escalation clauses in contracts are reportedly growing. This is where a potential buyer bids on a home at one price but is willing to raise the bid if the seller receives any higher bid.
But the hot market shouldn’t offer up any fears of a housing bubble, Yun notes. Unlike years past, buyers are coming in with higher down payments and higher credit scores. Also, the lack of new-home construction is another reason not to fear a bubble, he says. Prices don’t drop when there are inadequate supplies, and homebuilding is basically at half the level it was in the mid 2000s.
The strengthening housing market is becoming one major contributor to economic growth too, Yun notes. Higher home prices and housing equity will help give a boost to consumer spending, he adds.
“With no imminent threat of a recession, the housing market’s strong first quarter sets the foundation for continued gains the rest of the year,” Yun writes.
