Posts Tagged ‘interest rate’

Housing Affordability May Plummet in 2018

Posted on November 21, 2017 by Laura Lam

During the recent CoreLogic and the Urban Institute’s Housing Finance, Affordability and Supply in the Digital Age conference, CoreLogic Chief Economist Frank Nothaft predicted rising interest rates will cause home prices to rise.  Mortgage interest rates are expected to continue rising over the next couple years as experts predict the Federal Reserve will raise the Federal Funds rate in once more this year in December and up to 4 more times in 2018. As the chart shows, CoreLogic forecasted it will rise to 4.7% by December 2018. Nothaft explained as mortgage interest rates increase throughout 2018, less current homeowners will be motivated…

Are Home Equity Loans Staged for a Comeback?

Posted on November 15, 2017 by Laura Lam

There has been a hint of optimism for home equity lending among bankers this earnings season, but attitudes remain mixed a decade after the housing market crash began.  While home equity lines of credit provided a lift to some bank consumer portfolios, a number of other banks said their home equity businesses had fallen and added little about their future. Industry observers say bankers should take the long view. Home equity lines of credit especially are poised to grow now that home values have been rising for a number of years during the economic recovery.  “If you think about the…

Housing Affordability Still Strong Despite Price Increases

Posted on November 14, 2017 by Laura Lam

Home prices continue to increase, yet affordability actually improved since July, according to the latest Mortgage Monitor report from Black Knight.  As of September, the average homeowner needed 21.4% of their median income to purchase a home. This is actually down from July’s post-recession peak of 21.7% and low by historical standards.  For comparison, an average 24.2% of the median income was required to purchase a home from 1995 to 1999. That increased to 26.2% in the years before the housing boom from 2000 to 2003. Interest rates declined about 40 basis points over the past 6 months, offering the opportunity…

Are Some Cities Close to a Housing Bubble?

Posted on November 07, 2017 by Laura Lam

According to a recent report released by the Urban Institute, with home prices on the rise, some cities are inching closer to a housing bubble.  The Urban Institute explained that in order to determine if the U.S. is in a housing bubble, knowing the reason for the price growth is critical. In order to determine the reason for the price growth, Urban Institute utilized its housing affordability index.  Overall, housing in the U.S. remains very much in the affordable range. The median household can afford a house that is $70,000 more expensive than the median home price today. In 2006,…

Americans are Getting Better at Paying Mortgages

Posted on September 05, 2017 by Laura Lam

Over the last few weeks, report after report all show the same thing – more Americans are paying the mortgages on time right now than at any time since the housing crisis.  A recent Black Knight Financial Services report showed that there were fewer loans in foreclosure in the month of July than in any month in more than 10 years. Recent data from Transunion showed that mortgage delinquency rates fell to the lowest rate in 10 years during the second quarter, while a recent report from S&P Dow Jones Indices and Experian showed that in July, the average mortgage default rate hit its lowest level in a decade. The most recent report from CoreLogic showed that…

Millennial Homebuyers Worry About Affordability

Posted on September 01, 2017 by Laura Lam

According to a recent survey conducted by loanDepot, 52% of Millennials (born between 1981 and 1997), cite no longer wanting to pay rent and being ready to start a family as two top drivers motivating them to start looking into homeownership.  However, half of those surveyed are anxious about the expense of real estate and mortgage payments, with only 18% saying they think a home purchase is affordable for them. As for barriers to entering the housing market, Millennial renters are concerned about having enough money for a down payment (63%), knowing where to start the process (48%) – with 56%…

Rate Hike Prevented 1 Million Americans From Paying Mortgage

Posted on July 25, 2017 by Laura Lam

A new analysis from TransUnion found that 10.6 million Americans could struggle to absorb their increased monthly payments after the Federal Reserve Board raised interest rates in December, however further examination showed only 1 million struggled with being delinquent after the rate hike. TransUnion’s study identified 63 million consumers who carried debts where the minimum monthly payments was tied to the market interest rate, and would be effected by rate hikes. Using its CreditVision aggregate excess payment algorithm, TransUnion found that 10.6 million consumers were at an elevated risk of not being able to absorb the 0.25% rate hike. The average change in monthly payments was an…

Delinquencies Down in May; Some States Fare Better Than Others

Posted on June 26, 2017 by Laura Lam

Delinquencies and foreclosure rates dropped in May, partially reversing the sudden increase in April, according to Black Knight Financial Services’ First Look report.  After rising 13% in April, the largest monthly increase since November 2008, delinquencies saw a partial reversal in May with a drop of 7%. The inventory of loans that are either seriously delinquent, 90 days or more past due or in active foreclosure continued to improve, hitting a 10-year low in May. The number of loans in foreclosure hit 421,000 in May, a drop of 12,000 loans from April and 153,000 loans from last year.  Prepayments jumped 23% month-over-month, usually…

Beige Book: Slower Growth, Less Optimism

Posted on June 09, 2017 by Laura Lam

Economic growth slowed across parts of the U.S. in recent weeks, and some firms have become a bit less optimistic about the future, according to a new report from the Federal Reserve.  “A majority of districts reported that firms expressed positive near-term outlooks; however, optimism waned somewhat in a few districts,” the Fed said in its latest Beige Book report. Broadly, the Fed said economic growth was modest in 7 districts, moderate in 4 districts and “flattened out” in the New York Fed district. The prior beige book said activity expanded in all 12 regions with the pace equally split…

Housing Confidence Dips in March

Posted on April 25, 2017 by Laura Lam

Americans came down off their confidence high in March as fewer say now is a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index.  The index decreased 3.8 percentage points to 84.5 in March, down from February’s survey high. “Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the index to its survey high in February,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Strong home price appreciation has turned into a double-edged sword for the housing market as it boosted the net share…