More Americans Are Homeowners in 2018 – Industry Outlook

By May 4, 2018Industry Outlook

Mostly Application and Rates on the Rise – Based on the Mortgage Bankers Association, mortgage applications are currently up 11 percent from a year ago. However, mortgage rates are continuing their climb, reaching their highest level since 2013. “Higher Treasury yields, driven by rising commodity prices, more Treasury issuances, and the steady stream of solid economic news are behind the uptick in rates over the past week,” says Sam Khater, Freddie Mac’s chief economist. “Despite the increase in borrowing costs, demand for home purchase credit remains solid.”

Freddie Mac Expands 3% Down Loans for New Buyers – Based on According to Freddie Mac’s announcement, they are introducing a new 3 percent down payment option for qualified first-time buyers. The new conventional loan option is called HomeOne and it will not have any geographic or income restrictions. Freddie’s expansion into small down payment loan products for new buyers will put it in competition against FHA, which offers mortgages to first-time buyers that similarly only require 3 percent down. Freddie Mac rolled out conventional mortgages with 3 percent down payments more than three years ago for qualified low and moderate income borrowers. Its HomeOne product will not replace its current Home Possible products, but instead serve as a complement to it, Freddie Mac officials say.

More Americans Are Homeowners in 2018 – Based on the Census Department’s latest report, more Americans became homeowners as the number of renters continued to decrease. The homeownership rate in the first quarter of 64.2 percent was higher than last year’s 63.6 percent. This is also the fifth consecutive quarter of yearly increases in the ownership rate. The homeownership rate has been gradually climbing back since hitting a 50-year low in 2016. The rate peaked in 2004 at 69.2 percent, but despite recent climbs, it still remains below the 25-year average rate of 66.3 percent. Meanwhile, the number of renters has dropped.  

CFBP Fixes “Black Hole” in Mortgage Rules – According to the Consumer Financial Protection Bureau’s statement, it has fixed what’s become known as an information “black hole” in the Know Before You Owe mortgage rules, and the agency is attempting to provide greater clarity to borrowers when it comes to disclosing increases in closing costs. Under a new amendment to the mortgage rules, the CFPB clarifies when lenders are allowed to pass increased closing costs on to consumers and makes the disclosure of such increases clearer on the Closing Disclosure form. The mortgage rules, also known as TILA-RESPA Integrated Disclosure, or TRID, first took effect on October 3, 2015, and ushered in new Loan Estimate and Closing Disclosure forms that lenders must supply to consumers.

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