Mortgage Rates Remain Steady While Homeowners Rush to Refinance

Potential homebuyers and homeowners looking to refinance are still seeing a window of opportunity as mortgage rates mostly held steady in the past week.

30-year fixed-rate mortgages averaged 3.93% with an average 0.6 point for the week ending Aug. 20, 2015, according to Freddie Mac’s weekly market survey. A year ago, the rate averaged 4.10%.
15-year fixed rates slipped to 3.15% with an average 0.6 point. The same term priced at 3.23% a year ago.
5-year adjustable-rate mortgages were 2.94% with an average 0.5 point. Last year at this time the same ARM averaged 2.95%.
“There was little movement in financial markets this week as the 30-year fixed mortgage rate remained steady, dropping only 1 basis point to 3.93%,” Sean Becketti, chief economist for Freddie Mac, said in a release. “Housing markets have responded positively to low mortgage rates — the 30-year fixed mortgage rate has been below 4% for five consecutive weeks. Overall housing markets remain on track for the best year since 2007.”

Homeowners refinance amid favorable rates
As mortgage rates remain in the neighborhood of 4%, borrowers are taking the opportunity to refinance higher-rate home loans. The Mortgage Bankers Association reports refinance applications were up 7% from the previous week, through Aug. 14. Demand was particularly driven by jumbo loan refinancing.

Overall mortgage application volume gained 3.6%.

New housing starts highest since 2007
The housing inventory shortage may be soon be seeing some relief. New construction is gaining momentum, as single-family housing starts rose 12.8% in July, according to the National Association of Home Builders. That’s the fastest pace of new home starts since Oct. 2007.

“Our builders are reporting more confidence in the market, and are stepping up production of single-family homes as a result,” said Tom Woods, NAHB Chairman, in a release. “However, builders are still reporting problems accessing land and labor.”

The recovery varies widely by region, however. Combined single-family and multifamily new construction starts rose in the Midwest (+20.1%) and South (+7.7%) but fell in the Northeast (-27.5%) and West (-3.1%).

read more: http://www.nerdwallet.com/blog/mortgages/mortgage-rates/mortgage-roundup-820/

Bank of America says it’s No. 2 for mortgage customer satisfaction. So does Chase.

In the competitive U.S. mortgage market, bank giants are battling to be runner-up in customer satisfaction for home loans.

On Wednesday, Bank of America BAC, +0.83%  boasted of earning the No. 2 spot in J.D. Power’s customer-satisfaction study for mortgage originations. On Tuesday J.P.Morgan Chase JPM, +0.51%  proclaimed it was No. 2 in J.D. Power’s customer-satisfaction study for mortgage servicing.

Both claims are true, with a caveat: USAA out-scored Bank of America in the origination study, but it wasn’t included in the ranking because its mortgages are only available to those who have been or are in the military, plus their families.

So, who is No. 1 for mortgage-customer satisfaction? That’s Quicken Loans, an online lender based in Detroit. Quicken nabbed top spots last year in customer satisfaction for both originations and servicing.

For the origination survey, Quicken has ranked No. 1 for five consecutive years, with good marks for loan offerings, the application and approval process, and problem resolution, among other categories. For the servicing study, 2014 was the first year that J.D. Power included Quicken, which promptly beat its competition. Quicken performed well in categories such as billing and payment process and escrow-account administration.

source: http://www.marketwatch.com/story/bank-giants-battle-to-be-no-2-for-mortgage-customer-satisfaction-2015-07-15

Mortgage rates dip amid world economic concerns

With all the chaos in the world these days – Greece, China, Puerto Rico, not to mention falling oil prices – investors have sought safety in bonds, driving yields down. That usually pushes mortgage rates lower. Although home loan rates dipped this week, they didn’t slide very far, according to the latest data released Thursday by Freddie Mac.

2300-Armschart0711

The 30-year fixed-rate average slipped to 4.04 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.08 percent a week ago and 4.15 percent a year ago. The 30-year fixed rate has stayed above 4 percent for the past five weeks.

The 15-year fixed-rate average edged down to 3.2 percent with an average 0.5 point. It was 3.24 percent a week ago and a year ago.

Hybrid adjustable rate mortgages also fell. The five-year ARM average dropped to 2.93 percent with an average 0.4 point. It was 2.99 percent a week ago and a year ago.

The one-year ARM average dipped to 2.5 percent with an average 0.3 point. It was 2.52 percent a week ago.

“Yields on Treasury securities declined this week in response to investor concerns about events in Greece and China. Mortgage rates fell as well, although not by as much as government bond yields,” Sean Becketti, Freddie Mac chief economist, said in a statement.

“Overseas volatility is likely to persist for some time, providing some restraint on potential U.S. rate increases. In addition, the minutes of the June meeting of the Federal Open Market Committee suggest the Federal Reserve will proceed cautiously — monitoring events both overseas and in the United States to ascertain the appropriate moment to begin raising short-term interest rates. As a result, mortgage rates may remain in the neighborhood of 4 percent for a while.”

read more: http://www.washingtonpost.com/blogs/where-we-live/wp/2015/07/09/mortgage-rates-dip-amid-world-economic-concerns/

Mortgage Loan Rates Dip, but Remain Volatile

The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week increase of 4.6% in the group’s seasonally adjusted composite index for the week ending July 3. That followed a decrease of 4.7% for the week ending June 26. The weekly results included an adjustment for the Independence Day holiday. Mortgage loan rates decreased on all five loan types.

On an unadjusted basis, the composite index decreased by 6% week over week. The seasonally adjusted purchase index rose by 7% compared to the week ended June 26. The unadjusted purchase index dropped by 4% for the week and remains 32% higher year over year.

The MBA’s refinance index increased by 3% week over week, and the percentage of all new applications that were seeking refinancing slipped from 48.9% to 48.0%, its lowest level since June of 2009.

Mortgage Daily News reported Tuesday that a majority of lenders were quoting conventional 30-year fixed mortgage loan rates of 4% for their top-tier borrowers earlier in the day, but after European markets closed Tuesday those rates disappeared and the prevailing rate moved back to 4.125% for top-tier borrowers. The report goes on to say:

    This type of intraday movement is par the course recently, and it’s not going away any time soon. Whether it’s driven by domestic events such as [Wednesday]’s release of the Minutes from that last Fed meeting, or by several days of negotiations over a new Greek bailout that follow, volatility is the only safe bet. For the past three business days, that volatility has generally left mortgage rates in better shape, but until we see a more stable change in market behavior, it’s safer to treat such days as “lock opportunities” as opposed to promises of further improvement. [Emphasis in original.]

Read more: http://247wallst.com/housing/2015/07/08/mortgage-loan-rates-dip-but-remain-volatile/

Higher interest rates send mortgage applications tumbling again

An increase in mortgage and Treasury rates pushed mortgage applications lower again last week.

 

Data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey show applications were down 1.5% in the week ending May 15 -- the fourth consective decline.

 

“Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week,” said Mike Fratantoni, MBA’s Chief Economist. “Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11% higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates.”

 

The Refinance Index increased 0.3%, sending the refinance share of mortgage activity up to 52% of total applications from 51% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4% of total applications.

Contract interest rates

    The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose 4 basis points -- from 4.00% to 4.04%, its highest level since December 2014, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.

    The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) increased to 4.04% from 3.99%, with points dropping to 0.25 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

    The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA was up 4 basis points 3.80%, with points decreasing to 0.06 from 0.14 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

    The average contract interest rate for 15-year fixed-rate mortgages inched up to 3.26% from 3.23%, with points slipping to 0.30 from 0.40 (including the origination fee) for 80% LTV loans. The effective rate was unchanged from last week.

    The average contract interest rate for 5/1 ARMs dipped 1 basis point to 2.99%, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.

see more: http://www.consumeraffairs.com/news/higher-interest-rates-send-mortgage-applications-tumbling-again-052015.html

What to do about mortgages as retirement draws near

Many people approaching retirement face choices on what to do about their home mortgages, especially if they are nearing a payoff or need to tap the equity for living expenses.

This story can be found in our Extra special edition about retirement in the April 18 edition of the StarNews.

Should I pay off the loan, or refinance at a lower rate, for instance? Is a reverse mortgage for me?

"One of the keys to a successful retirement is reducing your expense," said Ed Taylor of Taylor Financial in Wilmington. "If possible I like to see clients be near the end of their mortgage right around retirement."

If your mortgage balance is relatively low, paying it off may be the best choice.

"With a low mortgage balance the tax benefit is minimal, if any," he said. Toward the end of a mortgage's term most of the payment is toward principal, so there's little interest to claim as a deduction on tax returns.

But, Taylor points out, it depends on what assets you have and what sources of income you have available in retirement.

It might be tempting to tap into your home equity to help fund retirement, and one way to do that is a reverse mortgage.

A reverse mortgage is a loan that is available to people at least 62 years old who live in their home, and is used to release the equity in the property to the homeowner, in the form of monthly payments, a lump sum or a line of credit, according to National Association of Personal Financial Advisors. Repayment is deferred until the owner dies or leaves, or the home is sold.

In a reverse mortgage, the homeowner makes no payments and the debt on the property increases up to a pre-determined maximum amount.

see more at: http://www.starnewsonline.com/article/20150414/ARTICLES/150409837

Freddie Mac Finds Mortgage Rate Drop Amid Underwhelming Job Growth

On the heels of a disappointing month of job growth, Freddie Mac reported Thursday that average mortgage rates are down across the board.

Freddie Mac’s latest Primary Mortgage Market Survey showed that the average 30-year fixed-rate mortgage dropped from 3.70 to 3.66 percent over the past week, inching the rate ever closer to a full percentage point behind where it was a year ago, 4.34 percent. Fifteen-year fixed-rate mortgages dropped by exactly the same amount, to 2.93 percent, which is slightly more than a full percentage point behind this time last year.

Variable-rate mortgages were down as well. According to Freddie Mac, 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.83 percent this week, down from last week’s 2.92 percent. A year ago, the 5-year ARM averaged 3.09 percent. However, 1-year Treasury-indexed ARMs maintained at 2.46 percent, almost unchanged from a year ago.

Len Kiefer, deputy chief economist at Freddie Mac, cited the latest‒‒and to many, surprisingly sluggish‒‒job growth numbers released by the Bureau of Labor Statistics last week in the latest PMMS report. In March, months of solid gains in an increasingly healthy labor market came up short of expectations. According to the BLS, March saw the addition of 126,000 new jobs, which is 121,000 fewer jobs than were expected.

In the 12 months leading up to March, each month saw an average of 266,000 new jobs added. Meanwhile, jobless claims have dropped to 268,000, “much lower than market expectations of 285,000,” Kiefer says.

According to the BLS, the unemployment rate remained at 5.5 percent‒‒its lowest level since 2008‒‒from February to March. However, in February, Doug Duncan, chief economist at Fannie Mae, attributed declining unemployment to people leaving the labor force.

One bright spot is pay. “We did see some uptick in wages,” Kiefer said. “Average hourly earnings increased 7 cents for the month and are up 2.1 percent over the year.” The average hourly wage is now $24.86; Duncan said that higher wages are necessary to bolster growth in the housing market.

see more at: http://themreport.com/headline/04-09-2015/freddie-mac-finds-mortgage-rate-drop-amid-underwhelming-job-growth

Average rate on 30-year mortgage rises to 3.80 percent

Average long-term U.S. mortgage rates have edged up for a third straight week while remaining near their historically low levels reached in May 2013.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage rose to 3.80 percent from 3.76 percent last week.

The rate for the 15-year loan, a popular choice for people who are refinancing, ticked up to 3.07 percent from 3.05 percent last week.

A year ago, the average 30-year mortgage stood at 4.37 percent and the 15-year mortgage at 3.39 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

In testimony before Congress this week, Fed Chair Janet Yellen made clear that the central bank isn’t ready yet to raise rates from record lows. The job market is still healing, and inflation is too low, she said. At the same time, Yellen signaled that the Fed is moving closer to a rate hike by sketching the steps it would take when it deemed the time was right.

A government report issued Wednesday showed that sales of new homes were basically flat in January, evidence that the relatively low mortgage rates and recent job gains have yet to spur the real estate market. Despite the increasingly favorable economy, home sales have been sluggish at the start of the year. Still, many analysts expect that the housing market will gather momentum with the start of the spring buying season.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of 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.

see more at; http://www.news-press.com/story/money/industries/realestate/2015/03/01/average-rate-year-mortgage-rises-percent/24087413/