ABBA First Mortgage News

Mortgage rates go up an eighth last week but the 30 year fixed rate mortgage is still in the mid 3’s for clients w/ good credit!

October 18th, 2019

Mortgage rates jumped more than 10 basis points from last week, according to new data from Freddie Mac.

The 30-year fixed-rate mortgage (FRM) edged up from last week’s 3.57% to 3.69%, according to the Freddie Mac Primary Mortgage Market Survey. However, it is still 1.16% lower than last year’s 4.85%.

Freddie Mac Chief Economist Sam Khater said there’s no need for homebuyers to panic just yet.

“Despite this week’s uptick in mortgage rates, the housing market remains on the upswing with improvement in construction and home sales,” Khater said. “While there has been a material weakness in manufacturing and consistent trade uncertainty, other economic trends like employment and homebuilder sentiment are encouraging.”

Additionally, the 15-year FRM rose to 3.15% from last week when it averaged 3.05%. A year ago, the 15-year FRM was 4.26%.

Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) remained unchanged at 3.35%. At this time last year, the 5-year ARM was 4.10%.

At this time it would be wise for all borrowers who are considering to refinance their homes to set the table and apply now.  Should the market allow ABBA First to squeeze a little more at the right time and obtain the lowest rate for their clients, they will certainly work towards that goal from the moment that you begin the application process with them.  Don’t delay and apply today.  Call 910-332-0650 or complete the FULL application on their website under the APPLY HERE tab.

Rates continue to be historically low although they are going up.

October 16th, 2019

For the week ending October 3, Freddie Mac announced that 30-year fixed rates rose one tick to 3.65% from 3.64% the week before. The average for 15-year loans decreased to 3.14% and the average for five-year ARMs remained at 3.38%. A year ago, 30-year fixed rates averaged 4.71%, more than 1.0% higher than today. “While rates on home loans generally held steady this week, overall demand remained very strong, rising over fifty percent from a year ago thanks to increases in both refinance and purchase applications. As economic growth decelerates, it is clear that low interest rates will continue to support the real estate market and we expect that to persist for the remainder of the year,” 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.

 

Refinancing abounds amongst our younger homeowners.

October 3rd, 2019

More millennial homebuyers refinanced mortgage loans in August as average interest rates dropped to its lowest level since December 2016.

Refinances for millennials grew 2% month-over-month to 25% of all closed loans, the highest share since December 2015, according to the Ellie Mae Millennial Tracker.

Average interest rates for 30-year notes fell to 4.059%, spurring the increase. Meanwhile, shortage in affordable housing in growing markets led to purchases dipping for the second consecutive month, accounting for 74% of all closed loans.

Conventional refinance loans climbed to 29% from 27%, while conventional purchase loans dropped to 69% from 72%. VA refinances also posted a monthly increase to 38% as purchases declined to 62%. FHA purchases were down to 91% and refinances inched up one point to 9% in August.

“We are seeing millennial homeowners who may have purchased homes only a few years ago quickly taking advantage of the industry’s extremely low interest rates,” said Ellie Mae Chief Operating Officer Joe Tyrrell. “We will also be watching to see if the increased purchase power from a lower rate environment enables some Millennials to make the leap into homeownership as we enter the fall home-buying season.”

With the increase of refinances, time to close for all loans to millennials and refinance loans was 42 days in August. Purchase loans remained unchanged for the third month in a row at 40 days.

Here we go lower again! But for how long?

October 2nd, 2019

For the week ending September 26, Freddie Mac announced that 30-year fixed rates fell to 3.64% from 3.75% the week before. The average for 15-year loans decreased to 3.16% and the average for five-year ARMs moved down to 3.38%. A year ago, 30-year fixed rates averaged 4.72%, more than 1.0% higher than today. “With both the unemployment rate and fixed rates below four percent and near historic lows, it is no surprise that the housing market regained momentum with home sales and construction at or near decade highs. The fall housing market is poised to continue with steady gains in prices and solid sales activity,” said Sam Khater, Chief Economist, Freddie Mac.

It is a roller coaster ride that we’ve seen with lulls in-between the peaks and valleys.  Just how long these flats will last depend upon nothing more than what we’ve been experiencing all along-uncertainty in the marketplace.  The risk to float a loan may bring the reward that so many are waiting for, however the opportunity to lock at a rate which is as close to the lowest that we’ve ever had in the history of modern day interest rates, may be as comforting to many who do not gamble with their everyday resources.  Please call ABBA First Mortgage and get on board with us as we work with you and for you seeking the BEST new mortgage for your needs.

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.

Before we (or “if we ever”) see new lows, it may not be until after we see rates rise once again!

September 25th, 2019

For the week ending September 19, Freddie Mac announced that 30-year fixed rates rose to 3.73% from 3.56% the week before. The average for 15-year loans increased to 3.21% and the average for five-year ARMs moved up to 3.49%. A year ago, 30-year fixed rates averaged 4.65%, almost 1.0% higher than today. “Despite the rise in interest rates, economic data improved this week – particularly housing activity, which gained momentum with a noticeable rise in purchase demand and new construction. Homebuyers flocked to lenders with purchase applications, which were up fifteen percent from a year ago, and residential construction permits increased twelve percent from a year ago to 1.4 million, the highest level in twelve years. While there was initially a slow response to the overall lower rate environment this year, it is clear that the housing market is finally improving due to the strong labor market and low rates,” said Sam Khater, Chief Economist, Freddie Mac.  ABBA First continues to see mortgage refinance transactions from clients that had bought their homes less than a year ago looking to take advantage of the new low rate environment.  Call 910-332-0650 and see what they can do for you!

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.

Possibly more rate cuts in store from the Federal Reserve

September 23rd, 2019

Federal Reserve Bank of St. Louis President James Bullard said the central bank may need to ease monetary policy further to offset downside risks from trade conflicts and too-low inflation.

“A sharper-than-expected slowdown may make it more difficult for the Federal Open Market Committee to achieve its 2% inflation target,” Bullard said in remarks prepared for delivery Monday in Illinois. “The FOMC may choose to provide additional accommodation going forward, but decisions will be made on a meeting-by-meeting basis.”

A divided Fed cut interest rates for the second time in two months last week, reducing its federal funds target by a quarter percentage point to a range of 1.75% to 2%. Bullard dissented from the decision, favoring a half-point reduction, while two other regional chiefs wanted no change. Inflation has been below the Fed’s target for most of the past seven years.

The recent inversion of U.S. Treasury yields, with higher short-term rates than long-term ones, “seems to suggest U.S. monetary policy may be too restrictive for the current environment,” Bullard told the Effingham County Chamber of Commerce.

Downside risks to the 10-year-old U.S. expansion include global trade policy uncertainty, slowing global growth, contraction in global and U.S. manufacturing, and slowing business investment, Bullard said.

“Trade policy uncertainty creates a disincentive for global investment” and “slower global growth may feed back into slower growth in the U.S.,” he said.

Market measures of inflation expectations have slumped since mid-July amid increased concern about trade conflicts.

“Insurance rate cuts may help re-center inflation and inflation expectations at the 2% target sooner than otherwise,” he said.

Copyright Bloomberg News

Fed cuts benchmark interest rate by 25 basis points

September 20th, 2019

With the U.S. and global economies dealing with a period of turbulence, the Federal Reserve on Wednesday shaved 25 basis points off its benchmark interest rate for the second time in two months.

The cut comes despite a solid labor market and economic activity that, according to the Fed, has been rising at a “moderate” rate. Still, manufacturing has shown considerable weakness, with business fixed investment and exports showing vulnerability amidst the ongoing U.S.-China trade war and other international stressors, such as the United Kingdom’s messy divorce with the European Union.

“In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the [Federal Reserve’s Federal Open Market] Committee decided to lower the target range for the federal funds rate to 1-3/4 to 2 percent,” the Fed announced. Seven of the Fed’s 10 regional presidents voted for the rate cut.

Despite the decisive (and predicted) action by the Fed, the cut did little to alleviate market uncertainties, said Mike Fratantoni, chief economist and senior vice president of research and industry technology for the Mortgage Bankers Association.

“Although the financial markets fully anticipated today’s Federal Reserve decision to lower their target for the Fed Funds rate, the level of uncertainty in respect to the global and domestic economy and future monetary policy has been quite high. This is why there’s been a wild swing in mortgage rates over the past month.

“Today’s news does little to reduce uncertainty. The trade war with China, and now conflict in the Middle East, certainly add to the overall uneasiness. While it is not surprising that FOMC voters cannot agree on the outlook for monetary policy, as indicated by the three dissenting votes today, the disagreement itself also adds to the uncertainty.”

Looking ahead, Fratantoni said, the MBA expects the recent home-refinance wave, spurred by the last month’s drop in mortgage rates, will tail off toward the end of 2019. The home-purchase market should continue to benefit from significantly lower mortgage rates compared to last year and, coupled with a continually strong job market, these factors should continue to support homebuyer demand, he added.

As Fratantoni said, the divisive nature of the vote is noteworthy. The trio of dissents represents the most in a Fed vote since December 2014. Two regional presidents indicated a preference to keep the federal funds rate unchanged, while the third, James Bullard of St. Louis, pushed for an even larger rate cut of 50 basis points.

At a news conference after the committee meeting, Federal Reserve chairman Jerome Powell said that the group “took this step to keep the economy strong.” He added that although the outlook for the national economy remains healthy, it is “a time of difficult judgments” and rates could see another cut this year if the economy shows further weakness. Fannie Mae, among others, projects another rate cut in December.

The cut already has one high-profile detractor in President Donald Trump, who has aggressively berated the Fed on Twitter for not cutting rates already. Trump lamented Wednesday’s action as not enough of a cut, haranguing Powell and the Fed in a tweet for having “no ‘guts,’ no sense, [and] no vision.” He also added a further jab at Powell — who Trump nominated to the chairman’s post in 2017 — calling him a “terrible communicator.”

Reprinted from the Scotsman Guide of September 18th, 2019

Waiting for that lowest rate?

September 9th, 2019

“Fixed mortgage rates could fall to 3.3% by the end of the year as the nation’s economy slows, according to Lawrence Yun, chief economist of the National Association of Realtors. That would put the rate just a smidge below the 3.31% seen in November of 2012 – the lowest average for a 30-year fixed mortgage in Freddie Mac data going back to 1971.”

ABBA First Mortgage quoted a 3.25%, 30 year fixed rate mortgages with a .5 discount point at that time back in 2012.  Incidentally, we closed a purchase loan recently for 3.375% with 0 points for a client with the right parameters when the rates had hit a low and he was prepared to lock in the rate with us for he had “set the table” by completing the application and had already been pre-approved.  Other clients also have done the same and have taken advantage of just having to lock in their rate because they had already “set the table” with us.  Please call us at 910-332-0650 so that you too can be ready to obtain the lowest rate available for your needs as well.  Or, if you’d rather,  complete the Full Online Application that is found on our site at:

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

We look forward to working with you and for you.

Excerpts in quotes taken from Housing Wire Newsletter Sept. 9 2019

Owning a home vs. renting? According to BOA study it’s no contest! Take advantage of ABBA First mortgage rate specials now! Call 910-332-0650

September 6th, 2019

Homeownership has been so positive for most owners, that they would never choose to return to renting.

A new study from the Bank of America found that 83% would never go back and 93% said that their lives have been happier because of homeownership.

The Homebuyer Insights Report also discovered that 88% said buying their home was the best decision they ever made while 79% said it has changed them for the better.

Emotional attachment and improved lifestyle both contribute to their happiness. And many said they have benefitted from new hobbies such as gardening/landscaping and interior design/remodeling.

“We know how much homeownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” said D. Steve Boland, head of Consumer Lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.”

Being able to house the whole family under one roof (24%), a sense of pride (47%), and allowing them to entertain more (49%) were all cited as positive changes since buying a home.

Emotions vs. equity
While respondents said homeownership builds both emotional and financial equity, it is the emotional value that is most important.

More than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment.

Most Americans agree that owning one is a way to build lifelong memories with loved ones, and 70% say they are more emotionally attached to their homes than they anticipated. More than two-thirds believe it would be difficult to move from their home because of the memories made there.

Rates are still amongst the lowest ever

August 29th, 2019

For the week ending August 22, Freddie Mac announced that 30-year fixed rates fell to 3.55% from 3.60% the week before. The average for 15-year loans decreased to 3.03% and the average for five-year ARMs moved down to 3.32%. A year ago, 30-year fixed rates averaged 4.51%, almost 1.0% higher than today. “The drop in rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months, while refinances surged to their highest share in three and a half years. Households that refinanced in the second quarter of 2019 will save an average of $1,700 a year, which is equivalent to about $140 each month. The benefit of lower rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity,” 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.