Mortgage Rates Hover Near All-Time Lows – Based on Freddie Mac reports, borrowing costs moved lower recently as the 30-year fixed-rate mortgage averaged 3.6%. Rates are at the lowest level in three months and about a quarter-point above all-time lows. “The very low rate environment has clearly had an impact on the housing market, as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy, and improving financial market sentiment,” says Freddie Mac Chief Economist Sam Khater.
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Source and link to the full article: Freddie Mac
Builders: Expect Growth in New-Home Sales – According to the National Association of Home Builders, builders are feeling bullish. They’re quick to brush off the modest 0.4% dip in sales of newly built single-family homes on a monthly basis in December. Instead, they’re focusing on how sales are still 23% higher than a year ago. “High levels of home builder confidence, coupled with an insufficient existing housing supply to meet current demand, suggest growth ahead for new home sales this year,” says Dean Mon, chairman of the National Association of Home Builders. Lower mortgage rates helped to accelerate new-home sales during the second half of the year, making it the best year for new-home sales since the recession, adds NAHB Chief Economist Robert Dietz.
Source and link to the full article: National Association of Home Builders and “Sales of New Homes Fell in December, but the Future Looks Bright for the Home-Building Industry,” MarketWatch (Jan. 27, 2020)
How Changes to FICO Scoring Could Impact Buyers – Based on The Wall Street Journal reports, the way FICO scores are calculated is changing this summer. The move could make it tougher for some Americans to get approved for a mortgage. Fair Isaac Corporation, more commonly known as FICO, will soon start more harshly penalizing the scores of consumers who have rising debt levels or who fall behind on loan payments. The company will also flag certain consumers who sign up for personal loans, which is a growing area of debt. Just how could this impact borrowers? Consumers with high FICO scores of 680 or higher who continue to manage their loans may see an increase in their scores. But those with scores below 600 who continue to miss payments or have blemishes on their credit will see even larger declines in their scores. The best way for consumers to increase their credit score: Pay down bills on time and reduce any credit card balances, financial analysts say. They also advise that borrowers keep revolving debt below 30% of their available credit so that they don’t see a larger impact to their credit score.
Home Seller Profits Climb to a 13-Year High – Based on a study from ATTOM Data Solutions, home sellers nationwide felt richer at resale in 2019. The average seller saw a home price gain of $65,500 on a typical sale, which is up from $58,100 the year prior. This marks the highest level since 2006. That also represents a 34% average return on their investment compared to the original purchase price, which is also the highest average home seller ROI since 2006. “The nation’s housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing even greater challenges for buyers seeking bargains,” says Todd Teta, chief product officer at ATTOM Data Solutions. “But there were signs that the market was losing some steam last year, as profits and profit margins increased at the slowest pace since 2011. While low mortgage rates are propping up prices, the declining progress suggests some uncertainty going into the 2020 buying season.”
Source and link to the full article: ATTOM Data Solutions