INTEREST RATES ARE RISING!

For all you fence sitters, the party is over…….no not really, but seriously, if you are considering buying a home and have been putting it of you may want to reconsider. Interest rates a year ago were in the middle to high 3’s and today they are at 4.5% and continuing to creep up as our economy gets better. In addition, home prices are also rising a bit, so with those two factors what it means is a year from now you won’t be able to buy as much house unless your income rises as well. For all you young people out there that are just coming into the housing market, please read article to the bottom and you will see the what the interest rates have been in the past by the decade. That should convince you that now is the time to buy that dream home now…..and buy as big as you think you will need and can afford as these current rates will never be back. They are still the lowest in my life time. Don’t miss the boat! As always, if you need any help making a purchase in the greater Tampa Bay area, please feel free to give Richard Kemper a call at 813-777-5332 or email me at getrichquick2@aol.comImage 

 

Freddie: No more record-low mortgage rates

 

 

WASHINGTON – April 2, 2014 – While mortgage rates have been rising the last few months, they’re still historically low compared to the trend over the last four decades, Freddie Mac says in a blog post.

But rates as low as they were in November 2012 – when the 30-year fixed-rate mortgage reached an all-time low of 3.31 percent – aren’t likely to return any time soon, the mortgage giant says. 

Still, Freddie assures borrowers that the all-time record high of 18.63 percent reached in October 1981 isn’t on the horizon either. (At 18.63 percent, monthly mortgage payments on a $200,000 loan would be $3,117, compared to $992 a month at today’s 4.32 percent average.)

With mortgage rates at 4.32 percent, 123 of the 157 metros that Freddie Mac tracks remain very affordable to households earning the median income. In order for affordability to be hampered in the majority of markets, interest rates would have to reach 7 percent, according to Freddie Mac.

“Stubbornly high unemployment over the last several years coupled with stagnant income growth exacerbates declining affordability in a rising interest rate environment,” according to Freddie’s blog post. “More jobs and income growth would help blunt the effects of higher interest rates and make buying a home more accessible. While jobs and income have shown some improvement in recent months, they continue to be challenged.”

Mortgage rates through the years

Here’s an overview of mortgage rates in the past four decades, as well as the approximate payment on a $200,000 mortgage and how it changes with the rise and fall of rates, according to Freddie Mac.

 1970s
 Average 30-year fixed-rate mortgage: 8.86%
 Approximate payment on a $200,000 mortgage: $1,589

 1980s
 Average 30-year fixed-rate mortgage: 12.70%
 Approximate payment on a $200,000 mortgage: $2,166

 1990s
 Average 30-year fixed-rate mortgage: 8.12%
 Approximate payment on a $200,000 mortgage: $1,484

 2000s
 Average 30-year fixed-rate mortgage: 6.29%
 Approximate payment on a $200,000 mortgage: $1,237

 2014
 Average 30-year fixed-rate mortgage: 4.36%
 Approximate payment on a $200,000 mortgage: $997

Source: “Mortgage Rates: From Dirt Cheap, to Cheap,” Freddie Mac (March 24, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688 

CURRENT MORTGAGE RATES AT 4.22% AND ARE PREDICTED TO GO A BIT LOWER!

To All My Readers: Interest rates continue to be at an all time low due to our sluggish economy and feds reluctance to in any way put in danger the recovering housing market. While interest rates have ticked up a bit from last year, they are still at historically low levels. Just to give younger readers some perspective, when I graduated from college in the 1980’s the interest rate on a 30 year fixed mortgage was over 9%. Needless to say i had to buy a smaller house than I wanted to because of what the interest rate did to my monthly mortgage payment. If you are a young person my advice is to buy now before the rates tick up again, and buy bigger than what you think you need for additional room as your family grows. I had no one to advise me, and after I bought my first home my wife became pregnant and the house I just bought was already to small. Thus we had to go through the process all again, this time finding a bigger home until number 4 came along and then that home was too small as well! Set your sights on a 4 bedroom, 2 or 3 bath home and you should be okay. As always, feel free to call me Richard Kemper at 813-777-5332 with any of your real estate questions.        

Average rate on 30-year mortgage at 4.22%

 

Mortgage Rate Trend Index

Half the experts (50%) polled this week by Bankrate.com expect little rate change over the short term. However, only 8% foresee an increase; the remaining 42% predict additional decreases.

WASHINGTON (AP) – Nov. 22, 2013 – Average U.S. rates on fixed mortgages declined this week after two weeks of increases, keeping home buying affordable.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.22 percent from to 4.35 percent last week. The average on the 15-year fixed mortgage dipped to 3.27 percent from 3.35 percent.

Rates had spiked over the summer and reached a two-year high in July on speculation that the Federal Reserve would slow its bond purchases later this year. But the Fed held off in September and now appears poised to wait at least a few more months to see how the economy performs. The bond purchases are intended to keep long-term interest rates low.

Mortgage rates tend to follow the yield on the 10-year Treasury note. They have stabilized since September and remain low by historical standards.

Still, mortgage rates are nearly a full percentage point higher than in the spring. The uptick has contributed to a slowdown in home sales. The National Association of Realtors said sales of existing homes fell 3.2 percent in October, the second straight monthly decline.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage held at 2.61 percent. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 2.95 percent from 3.01 percent. The fee rose to 0.5 point from 0.4 point.

Copyright © 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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IS THE MARKET COOLING? 11/18/13

I don’t believe there is any reason for alarm, but yes I have noticed the cooling off here in the Brandon, FL area. It is very interesting to look back and see what has happened. The market was soft going into spring, but then investor traffic drove prices up as inventory levels were low. The investor traffic has died down, but due to low inventory levels prices have not dropped. We will have to see what happens over the next few months.Read below for various reasons for slowing market.

Buying frenzy starting to cool?
NEW YORK – Nov. 18, 2013 – Bidding wars in recent months have fueled large gains in home values in some parts of the country. But bidding wars and the buying frenzy seen just a few months ago seem to be cooling at a time when housing affordability has been reduced due to higher mortgage rates and home prices.

“The bidding wars were creating a false market,” homebuyer Mike Imgarten told Bloomberg about his two-month house hunt in Sacramento, Calif., area. “Now is a good time to jump back in and see where we’re at.”

Inventories have risen in many markets, leaving homebuyers with more options. The National Association of Realtors® reported that inventory levels of unsold homes rose in September from a year earlier – the first time since 2011.

More homeowners are seeing the return of equity (more than 2.5 million homes saw positive equity return in the second quarter alone), which has prompted more people to list their properties.

“We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” says Ellen Haberle, an economist for the real estate brokerage, Redfin.

Home sales typically slow during this time of year, but some analysts say the seasonal drop-off has been higher than expected. They blame the increase in mortgage rates for a lot of that drop-off. Since May, mortgage rates have risen a full percentage point, which has led to an increase in borrowing costs that is holding some buyers back, housing experts say.

The government shutdown also has weakened consumer confidence, says Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.

“The frenzy has died down,” says Selma Hepp, a senior economist for the California Association of Realtors. “The question in the summer of this year was, ‘is this sustainable, or is this a bubble again?’ Now the data is showing that we’re returning to more of a traditional market.”

Source: “Bid Wars Wane in U.S. Housing Markets on Supply Rise: Mortgages,” Bloomberg Businessweek (Nov. 14, 2013)

MORE BANKS NOW OFFERING 5% DOWN CONVENTIONAL LOANS!

I still get comments from time to time from people who believe it is still really had to get a loan. If you are one of those people read on and you will be pleasantly surprised. If you need help finding a good lender in the Tampa area give me a call at 813-777-5332 and I will put you in touch with my broker. Richard Kemper RE/MAX Realty Unlimited

 

More banks offering loans for 5% down?

NEW YORK – Nov. 7, 2013 – For the last few years, buyers have been hard-pressed to land a mortgage if they didn’t have a 20 percent down payment, unless they turned to the Federal Housing Administration’s (FHA) low down-payment loans.

But a growing number of banks now offer loans with just 5 percent down, CNNMoney reports. For example, Bank of America, Wells Fargo and TD Bank are among the lenders reportedly offering mortgages with down payments as low as 5 percent.

TD Bank is offering a “Right Step” loan product that allows borrowers to get a loan with a 5 percent down payment while also allowing borrowers to get up to 2 percent of the sales price as a gift from a relative or third party. In actuality, then, borrowers would only need to come up with a 3 percent downpayment themselves.

Banks offering 5 percent down payment loans, however, also require borrowers to buy private mortgage insurance (PMI). Borrowers must keep PMI until they build up 20 percent equity in the home.

Source: “Banks Offering Mortgages with Only 5% Down Payments,” CNNMoney (Nov. 5, 2013)

PENDING HOME SALES DECLINE FOR 4TH MONTH IN A ROW SEPTEMBER 2013

Wow, this is not good news for a recovering Tampa housing market. The investors came in about a year or so and stabilized the Tampa market and helped us get our prices back to what they should be. But, the investors have slowed purchases in Tampa as they move on to cheaper markets, there was a 1%+ interest rate jump (which has now gone back down), 3 price increases by new construction builders in Tampa area, a government shut down, Obamacare, etc., which I think has some buyers heading back to the sidelines to wait it out and wait for some of the uncertainty to settle. I think key to the slower pending sales is price. I think home prices went up too quick which may make some people wait it out to see if prices are going to drop. No one wants to buy a home that is going to go down in value right after they bought it. That’s how we ended up with all the short sales after the housing market crash of 2007. Stay tuned to my blog to see how the Tampa real estate market is doing. Richard Kemper Re/Max Realty Unlimited 813-777-5332

Pending home sales continue slide in Sept.

WASHINGTON – Oct. 28, 2013 – Pending home sales declined for the fourth consecutive month in September. According to the National Association of Realtors® (NAR), higher mortgage interest rates and higher home prices curbed buying power.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August. Year-over-year, the index is down 1.2 percent compared to September 2012.

The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” says Lawrence Yun, NAR chief economist. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

September marks the first time in 29 months that pending home sales weren’t above year-ago levels.

“This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014,” says Yum. “Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year.”

The PHSI in the Northeast dropped 9.6 percent to 76.7 in September, and 6.4 percent below a year ago. In the Midwest, the index fell 8.3 percent to 102.3 in September, but it’s 5.7 percent higher than September 2012.

Pending home sales in the South slipped 0.4 percent to an index of 116.2 in September, but it’s 2.0 percent above a year ago. The index in the West dropped 9.0 percent in September to 97.3 and 9.8 percent lower than September 2012.

NAR projects that total existing-home sales this year will be 10 percent higher than 2012, reaching more than 5.1 million, and will likely hold even in 2014. The national median existing-home price is expected to rise 11 to 11.5 percent for all of 2013, but moderate to a 5 to 6 percent gain in 2014.

© 2013 Florida Realtors®