Higher Mortgage Rates Aren’t Scaring Buyers – Industry Outlook

By February 20, 2018Industry Outlook

Higher Mortgage Rates Aren’t Scaring BuyersAccording to a new survey released by the real estate brokerage Redfin, mortgage rates are inching higher and most home buyers seem unfazed by it. Only 6 percent of prospective home buyers recently surveyed said they would stop their home search if mortgage rates rose above 5 percent. Mortgage rates hovered below 4 percent at the end of 2017, but in January the average 30-year fixed-rate mortgage surpassed 4 percent. For the last five consecutive weeks, rates have been on the rise, with the 30-year mortgage rate averaging 4.32 percent in Freddie Mac’s most recent survey.

Time to Weigh in on CFPB Enforcement – Based on the Consumer Financial Protection Bureau announcement, the CFPB will accept public comments on their enforcement process. Among its many oversight areas is the Real Estate Settlement Procedures Act, known as RESPA. Mick Mulvaney, currently the acting director of the CFPB, announced the public comment period in an effort to help improve the bureau’s overall efficiency and effectiveness in its enforcement of federal consumer financial laws. The agency is seeking feedback on all aspects of its enforcement processes, including its investigations and penalties.  

Owners Upbeat That Equity Rises Will Continue – According to a new study by LendEDU, homeowners are optimistic that their home’s value will continue to increase, and they’re increasingly turning to home equity loans to try to make their homes even more valuable. More than 80 percent of about 1,000 homeowners recently surveyed said that they believe the value of their home will increase over the next three years as well as over the next five years. Fifty-two percent of homeowners say that they used a home equity loan for home improvement projects, and 89 percent believe that the home equity loan will increase the value of their home even more.

The True Silent Sufferers in Housing – Based on a new study from the National Association of REALTORS® shows that Millennials aren’t the generation who is dealing with the greatest hardships when it comes to breaking into the housing market. Instead, Generation X, those born between the mid-1960s and early 1980s is the age segment that is having the toughest time saving up to buy a new home.  Generation Xers “are at an age where they may have children, car loans, credit card debt,” says Jessica Lautz, NAR’s managing director of survey research. “They’re also less likely to be able to move back home [with their parents] to pay down debt.” About 47 percent of Gen X survey respondents reported having difficulty saving for a down payment compared to 23 percent of millennials.

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