ABBA First Mortgage News

After some ups and downs, steady is the name of the game.

July 16th, 2019

Rates were stable for the second straight week. For the week ending July 10, Freddie Mac announced that 30-year fixed rates remained at 3.75%. The average for 15-year loans increased to 3.22% and the average for five-year ARMs moved up one tick to 3.46%. A year ago, 30-year fixed rates averaged 4.53%, over 0.75% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac — “The recent stabilization in rates on home loans reflects modestly improving U.S. economic data and a more accommodative tone from the Federal Reserve to respond to the rising downside economic risk from trade tensions and soft global economic data. On the housing front, the latest weekly purchase application data suggests homebuyer demand continues to rise, which is consistent with the slowly improving real estate data from the last two months.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Like a “tug of war”, rates inched higher when compared to last week when they dropped slightly.

July 8th, 2019

We are seeing mortgage interest rates move up and down as if on a slow moving see saw.  After the previous week’s three-year low, the 30-year fixed-rate mortgage average (FRM) has inched up to 3.75% for the week ending July 3.

According to Freddie Mac’s Primary Mortgage Market Survey, the latest 30-year fixed-rate FRM average is only slightly higher than the 3.73% it averaged in the week ending June 26 – but still significantly lower than the same time a year ago, when the 30-year FRM averaged 4.52%.

Meanwhile, the 15-year FRM averaged 3.18%, up from the previous week when it averaged 3.16%. Lastly, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.45%, rising from the previous week’s rate of 3.39%.

“We’re seeing a tug of war happen as the fixed income market flashes warning signs while the equities market continues to march higher with optimism,” said Sam Khater, chief economist at Freddie Mac. “The data suggests the economy is weakening but is still on very solid ground with high consumer confidence and a strong labor market. Closer to home, the housing market continues to slowly improve and gain momentum as we head into the second half of the year, which is good news and should keep the economy growing.”

So still we wait to see the strength of the consumer confidence working alongside a growing economy for now which is good for the US.  Until such time when it can no longer sustain such growth and it begins to falter and reverse itself.  When there is bad news for the economy, there is typically good news for mortgage rates.  Keep your eyes open and be ready to call ABBA First to refinance your 4%+ interest rate down!

Compare this 2/bedroom apartment rent to a 3/bedroom mortgage payment.

July 5th, 2019

I’m shocked when I read that a two bedroom unit averages a rental cost of $1469 nationally when one can purchase a very nice 3 bedroom/2 bath home in here in Wilmington through ABBA First Mortgage for less than $1295 all inclusive with 3.5% down.  That’s right.  Today, a first time home buyer or buyers waiting for the right home to come along, can buy a home with less than $6900 out of pocket.  Please call ABBA First Mortgage as we have seen 2 or 3 of these homes come on the market within the last week or so.

To justify our request to look at these homes through one of our real estate agent friends that is keeping us up to date on what is available locally, July saw increased rental prices across the US, according to data from Zumper’s new National Rent Report.

The report found that the national one-bedroom rent rose 0.3% to $1,220 in June. Meanwhile, rental price for a two-bedroom unit slightly fell 0.1% to $1,469 nationwide. Both units’ prices came up 0.8% and 1.9% annually.

Demand for rental spaces in San Francisco drove prices up, with the price of a one-bedroom unit rising $20 to $3,720. San Jose followed, and Boston came down at third. Washington, D.C., ranked as the fifth priciest city, surpassing Los Angles, while Oakland slid to the seventh spot.

A one-bedroom rent in New York, on the other hand, dropped after reaching its three-year peak in Zumper’s last rent report. It now costs $2,940 to rent a one-bedroom apartment in NYC and $3,380 for a two-bedroom unit.

Year-over-year, rental prices in the mid- to lower-tier markets cooled off, experiencing larger amounts of double-digit declines.

By far, Raleigh’s annual rent growth was the fastest last month, up 5.1%. Chicago and Bakersfield had the biggest dips, both coming down 5.1% from 2018.  Why rent when you can buy?  Let us help you get there.  Call ABBA First Mortgage at 910-332-0650.

ABBA First Mortgage wants to help you obtain the lowest rate for your home with a refinance

July 3rd, 2019

I want you to know this- for this is something that I truly believe is coming our way-MORTGAGE INTEREST RATES ARE GOING LOWER-AND POSSIBLY TO THEIR LOWEST!  If this is something that you’re interested in taking advantage of for your home, you must have all your paperwork in place, otherwise you’ll miss the opportunity to be the one that hits the jackpot and catches it when it’s down at its lowest.  For me to lock in your rate when we think it has hit the bottom (for it’s not there yet), as we listen to the concerns of the talks in China, and the unrest of the Middle East, we’re talking of bad global economic news for the USA, which is good news for the US Treasury Bonds and in turn, great news for mortgage interest rates.  Other factors such as the Fed cutting rates at their next meeting and if they do at the end of July- will it be a .25 pt. or might they cut even more?  Other foreign global economies are cutting their bond rates as noted below in the article written by one of the gurus for the mortgage marketplace.  But we could see a touch and go situation which I’ve seen perhaps only 3 times during my 21 year mortgage industry career. It could be there and gone within hours as it was one time when the surge of people wanting to get a mortgage was phenomenal and the banks had to stop taking in any more loans as they could not handle the flow!  This I can tell you without hesitation that it was only the fortunate few that had their loans already in process and ready to go that were able to take advantage of such a wonderful opportunity and get locked in to have their mortgage loan eventually closed at that rate, for they were in process and ready to go.  So let’s be ready together.  Please.  I don’t ever want to beg you to save money- but this is coming.  The following is what this mortgage advisor is suggesting for us to do.  Another is simply saying- be prepared.  It could happen at any moment, just like something as terrible as 9/11 did. No comparison other than to say it would be my advice for you to set the table and complete the online application at your earliest convenience as part of being prepared.  It is found at:

 

https://5329129220.mortgage-application.net/WebApp/Start.aspx?oempage=1

 

Once submitted, and before anything else is done, I will call you, go over the possibilities of what your new loan will look like, ascertain that your new loan will be beneficial for you and your desires, and then move forward according to  whatever you want your next steps to be.  Please call me at 910-332-0650 if you have any questions whatsoever.

Rent or Buy? 45% of renters regret not buying.

July 1st, 2019

More people in the US have said that they regret choosing not to buy a home compared to those who already purchased one, according to the Zillow Housing Aspirations Report.

Almost half (45%) of the respondents said that one of their greatest regrets is renting rather than buying – which is five times the number of homeowners (8%) who regret buying instead of renting.

Meanwhile, more than half of the tenants were disappointed that they could not build equity, customize or even improve their rentals (52% in each case). The other half (50%) wished their rent wasn’t so steep.

Renters were also dissatisfied with their home, saying it’s too small (40% versus 21% of homeowners) and that they do not have private outdoor space (49% versus 25% of homeowners).

The report also found that older homeowners and renters were less regretful. Ninety percent of renters aged 18 to 34 have at least one regret about their place, compared to 82% of renters age 55 and above.

Between those age groups, 38% of millennial renters said pet ownership is too limited, compared to 21% of older renters. Additionally, younger renters (40%) said there was not enough parking, compared to older renters (25%).

Children were also a factor in renters’ regrets. Renters with kids (93%) were more likely to have at least one regret about their home, compared to those without (86%). According to the report, 59% of tenants with children were more likely to regret renting instead of buying, compared to 42% of renters without kids.

Sizing up the situation, staying slow and steady, stocks and rates seem stable.

June 27th, 2019

While rates remain steady and stay in a range of all time lows, our stock markets have seen high returns, although without the volatility that some would like to avoid.  But through it all, having low rates and high returns, many people are very happy.

Since the Dow hit a low of just under 6,500 in March of 2009, the recovery of the stock market has been dramatic to say the least. At its peak this year, the Dow has crossed the 26,000 barrier several times, which represents more than a 400% recovery over the past ten years. But the gains have not been on a straight line and this year has been no exception.

Just a few short weeks ago, stocks were headed south while the trade war rhetoric was raging. What caused the turnaround? We would like to say that it was the fact that we solved all of the trade problems. What really happened is that interest rates fell because market analysts were predicting grave consequences from the trade war. We can surmise that traders like lower rates more than they fear trade wars.

This is not the first time that bad news became good news. Lower rates are not just good news for stock owners. They are good news for homebuyers and anyone who is borrowing money. Some would say that there is a sale on money going on. Refinancing is up and so is homebuying sentiment according to Fannie Mae. Higher stocks and lower rates? That is the real good news. As long as the trade wars don’t cause the economy to suffer too badly.  Thanks to the present administration and the decision making of our Federal Reserve Board, we have seen an unnatural occurrence where good news for the economy and the stock market has also been good news for the mortgage market with continued low rates- a blessing for the potential homebuyers out there.

Rates rose slightly this past week but 30 yr rates are 1/2 pt. better than they were last year.

June 26th, 2019

The Summer started, the temperature went up, mortgage interest rates followed suit while inching up higher as the last week of Spring came to an end.  What’s next for the end of June and the beginning of the long, hot 12 months of Summer?  Today’s rates are better than they were last year at this stage of the game, by more than half of a point!

For the week ending June 20, Freddie Mac announced that 30-year fixed rates rose slightly to 3.84%. The average for 15-year loans decreased slightly to 3.25% and the average for five-year ARMs moved down to 3.48%. A year ago, 30-year fixed rates averaged 4.57%, over 0.5% higher than today. “While the continued drop in rates has paused, homebuyer demand has not. This is evident in increased purchase activity and loan amounts, indicating that homebuyers still have the willingness and capacity to purchase homes. Today’s low rates, strong job market, solid wage growth and consumer confidence are typically important drivers of home sales,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Housing is becoming more affordable

June 19th, 2019

With the mortgage interest rates having moved lower and the move towards renting and apartment house living on the rise, purchasing a home for the first time is more affordable than ever.  Millenials are finding that house prices are low enough with the right interest rate to be more affordable than rent in many cases.

First American Financial Corp released the March 2019 First American Real House Price Index (RHPI). The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state, and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. The index showed that nationally, affordability improved on a year-over-year basis for the first time since 2016.

“What began as a modest shift toward a buyers’ market in six cities last month has expanded into a national shift in affordability,” said Mark Fleming, chief economist at First American. “The shift is a departure from the long-term trend in the Real House Price Index (RHPI), which had been steadily increasing throughout the rising rate environment that began in 2017 and continued until late 2018. Now, surging consumer house-buying power is increasing demand.”

Fannie Mae predicts the Feds to cut interest rates by .25% THIS SUMMER

June 18th, 2019

Fannie Mae has downgraded its economic forecast for 2019 and 2020 amid heightened economic uncertainty, lending more weight to predictions that the Federal Reserve may cut interest rates this summer.

Fannie Mae’s Economic and Strategic Research (ESR) Group has powered its projections for US economic growth for 2019 and 2020 to 2.1% and 1.5%, respectively. The ESR Group had previously forecast growth of 2.3% for 2019 and 1.8% for 2020.

The group downgraded its prediction due to weakness in business fixed investment and softening global economic conditions, according to Fannie Mae. It also predicted that the Federal Reserve would cut interest rates by 25 basis points at the September meeting of the Federal Open Market Committee – which is later than many market observers think a cut will happen. Last week, traders in futures markets were giving odds of about 20% that the Fed would cut rates at this week’s meeting – and odds of 70% that there would be at least one interest-rate cut by the bank’s July meeting.

Where can we expect rates to wallow?

June 17th, 2019

What a difference a month makes.

In May, stocks fell sharply, and interest rates declined each week. June has been a different story. The Fed has signaled rate cuts are likely coming. Stocks have been rallying higher, and the decline in interest rates has stalled.

The Fed can’t control home loan rates. Those move mainly on inflation and expectations of inflation in the future. Inflation has remained tame for the past decade and is the main reason why home loan rates have stayed low as well.

This past week, we received another reading on consumer inflation, the Consumer Price Index (CPI), which confirmed there are no price pressures or inflation threat to the economy.

The result: the odds of a Fed rate cut have climbed to 85% for the July Fed Meeting on the idea that the Fed can comfortably cut rates and “allow” inflation to creep into the economy.  We may see rates stall  here for awhile or move up slightly.

Also keeping home loan rates near two-year lows is the uncertainty and lack of resolution with the US/China trade turmoil. The next step is a potential meeting between US and China at the G20 Meeting June 28-29. Mark your calendar. This is an important event, because as this trade dispute goes so do the economies around the globe.