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ABBA First Mortgage News

Rates, on an average, hold steady from the week before

August 4th, 2021

For the week ending July 29, Freddie Mac announced that 30-year fixed rates increased slightly to 2.80% from 2.78% the week before.  The average for 15-year loans fell slightly to 2.10% and the average for five-year ARMs fell to 2.45%. A year ago, 30-year fixed rates averaged 2.99%, .19% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time. Largely due to the current environment, the 30-year fixed-rate remains below three percent for the fifth consecutive week while the 15-year fixed-rate hits another record low.”

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

What will the rates do this week?

July 30th, 2021

Well, we all saw the rates fall to another low last week ending July 22, with Freddie Mac announcing that 30-year fixed rates decreased to 2.78% from 2.88% the week before. Many people jumped on that bandwagon that had their loans already in process and locked in their rate.  Others applied for mortgages hoping to obtain these lows but many banks had already pulled back a little; possibly due to the influx of loans they received and in the hopes of avoiding their staffs from being overwhelmed and delivering poor customer service.  Therefore many lenders raised their rates slightly until they can catch up again with the ebb and flow of underwriting smoothly without being swamped.

The average for 15-year loans fell to 2.12% and the average for five-year ARMs rose slightly to 2.49%. A year ago, 30-year fixed rates averaged 3.01%, .23% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – ” Concerns about the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth. While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit. Unfortunately, many homebuyers are unable to take advantage of low rates due to low inventory and high prices.”

When you’re ready, ABBA First is.  Give us a call to refinance your home soon at 910-332-0650.

 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.

How falling lumber prices impact US home buyers

July 19th, 2021

Lumber prices have continued to nosedive, falling for the eighth consecutive week after hitting their peak in May.

Markets Insider data showed prices of lumber dropping about 5% week-over-week on July 02, 2021, trading at $741 per thousand board feet (mbf). Monthly figures, however, revealed a much larger descent at 45%, the worst monthly drop on record dating back to 1978.

Lumber prices reached an all-time high of $1,670.50/mbf on May 07, more than six times higher than their pandemic low in April last year. As of July 02, prices had tumbled by 56% since hitting their May peak.

What is causing the decline?

Soaring demand as homeowners barred from leaving their houses due to pandemic restrictions embarked on renovation projects, coupled by reduced supply as COVID-19-impacted mills shut down operations, pushed lumber prices to unprecedented highs earlier this year.

But with the economy reopening, Americans began allocating the money they would otherwise have spent on home upgrades to travel. Homebuilders, meanwhile, started to delay projects partly to keep hold of their inventory of building materials, cooling demand further. This came as sawmills across the country started resuming operations, ramping up lumber supply.

“There was plenty of lumber available from the mills and enough ambition to sell,” wrote William Giguere, trader for Sherwood Lumber in Massachusetts, in a note obtained by BNN Bloomberg. “Missing was the sense of urgency from buyers.”

Hamir Patel, analyst at Canadian Imperial Bank of Commerce, also told BNN Bloomberg that many buyers were only purchasing if necessary, “generally staying on the sidelines.” He cited an assessment from Oregon-based trade publication Random Lengths, which pointed to “an abundance of mill offerings” as causing the “declines in several wood products that trade on the cash market.”

How does falling lumber prices impact the housing market?

At their peak, lumber prices hiked up the price of a single-family home by $35,875, according to a recent analysis by the NAHB. Soaring lumber prices also added almost $13,000 to the market value of a multi-home unit, which translated to an additional $119 in monthly rent for a new apartment.

“This unprecedented price surge is hurting American home buyers and home builders and impeding housing and economic growth,” wrote Chuck Fowke, chairman of NAHB, in the April analysis.

Since that analysis was published, however, the prices of lumber dropped substantially to the end of June, with industry experts predicting the slide would continue until next year. But despite the dip, analysts warn that buyers are not out of the woods yet.

Dustin Jalbert, senior economist of wood products at Fastmarkets RISI, told National Public Radio (NPR.org) that it could take weeks before retail centers feel the impact of the rate cuts, adding that “prices are probably not going to fall to the levels that they were before the pandemic.”

This view was shared by Dale Oxley, director of NAHB West Virginia. “That decline was really at the mills,” he told WCHS-TV. “The consumer really hasn’t seen that 30% to 40% because a lot of the… local suppliers haven’t burned off that high-price product.”

However, analysts noted that wood costs are just one of the several factors impacting house prices. Supply and demand, they said, remain the biggest driver of home values, particularly with the US home-buyer population, growing faster than the housing stock. This means that even if lumber prices return to pre-pandemic levels, home prices are not likely to follow.

“Lumber is not the main reason why homes are unaffordable,” Alex Barron, president of the Housing Research Center, told Bankrate. “It is the lack of resale supply – too many homes are still in the hands of landlords and investors. We had no land development after the crash for over a decade.

Article reprinted from MPA (Mortgage Professional America) 7-19-2021

Rates Improve…No wait! Rates worsen, but are stable. However…?

July 14th, 2021

Today is July 14th, after seeing the rates increase from the lows of July 8 to the worsening on July 9 and then worsen again after the serious deterioration on July 13. What?  This all happened after the week ending July 8, when Freddie Mac announced that the 30 year fixed rates had decreased to 2.90% from 2.98% the week before while ABBA First remained stable at 2.875%.  The average for 15-year loans fell to 2.20% and the average for five-year ARMs moved down to 2.52%.  A year ago, 30-year fixed rates averaged 3.03%, slightly higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Mortgage rates decreased this week following the dip in U.S. Treasury yields. While mortgage rates tend to follow Treasury yields closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs report. We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around three percent.”

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.

The rise and fall of mortgage interest rates. And the rise again…

July 1st, 2021

Today is July 1st and the word on the street is to consider LOCKing all loans that are able to be locked in at this stage of the game as the market is taking a strange turn for the worse.  Treasury bonds improved but were not able to hold as they dropped back allowing interest rates to deteriorate. Tomorrow will be another test for the bond market as the nonfarm jobs report comes out.  There is a short window on July 2nd as the stock market closes early for the holiday weekend and remains closed until Tuesday, July 5th.  ABBA First will be closed all day Friday and Monday in observance of Independence Day.

For the week ending June 17, Freddie Mac announced that 30-year fixed rates decreased to 2.93% from 2.96% the week before. The average for 15-year loans rose one tick to 2.24% and the average for five-year ARMs fell to 2.52%. A year ago, 30-year fixed rates averaged 3.13%, .20% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Mortgage rates continue to drift down as markets concur with the view that inflation increases are temporary. While rates are low, purchase demand has weakened over the last couple of months, primarily due to affordability constraints stemming from high home prices. With inventory tight, the slowdown in demand has yet to impact prices, meaning the summer will likely remain a strong seller’s market.”

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.

Rates have been reduced for your benefit!

June 29th, 2021

ABBA First Mortgage would like to invite new business with our recently advertised low rates available to clients with excellent credit that are applying for the first time.  New borrowers will note that rates have dropped to another new low for ABBA First of Wilmington NC as we seek to offer our services to buyers throughout the states of NC and TN.  With our low closing costs and competitive pricing, obtaining your mortgage through ABBA First, could never be more advantageous than now.  Apply online at www.abbafirst.com or call and speak directly to a loan officer at 910-332-0650.

Rates looking “gooder” at ABBA First Mortgage

June 3rd, 2021

We see, while looking for low Wilmington mortgage rates, that rates got a little bit better (were “gooder”) last week, but it’s amazing how easily the market can turn on a dime and give back all the gains in just a week. Today is Thursday, June 3, and rates are struggling to hold the better pricing that it had produced a mere week ago.  ABBA First Mortgage is still offering a rate lower than the national rate with 2.875% at 0 points being the name of the game for qualified clients seeking to purchase a home with a 30 year mortgage.

For the week ending May 27, Freddie Mac announced that 30-year fixed rates decreased to 2.95% from 3.00% the week before. The average for 15-year loans fell to 2.27% and the average for five-year ARMs remained at 2.59%. A year ago, 30-year fixed rates averaged 3.15%, 0.20% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Mortgage rates are down below three percent, continuing to offer many homeowners the potential to refinance and increase their monthly cash flow. In fact, homeowners who refinanced their 30-year fixed-rate loan in 2020 saved more than $2,800 dollars annually. Substantial opportunity continues to exist today, as nearly $2 trillion in conforming loans have the ability to refinance and reduce their interest rate by at least half a percentage point.”

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.

Rates are slightly deteriorating. Have we seen the best of the best?

May 27th, 2021

For the week ending May 20, Freddie Mac announced that 30-year fixed rates increased to 3.00% from 2.94% the week before. The average for 15-year loans rose to 2.29% and the average for five-year ARMs remained at 2.59%. A year ago, 30-year fixed rates averaged 3.24%, 0.24% higher than today. As of May 27, the 30-year fixed rate has increased to 3.00%, but ABBA First Mortgage is offering a credit instead of charging an origination cost like most other lenders.  The rate of 2.875% is still available through ABBA First Mortgage with extenuating circumstances considered.

Attributed to Sam Khater, Chief Economist, Freddie Mac – “After a run up over the first few months of the year, rates have paused and hovered around three percent since March. Despite this favorable rate climate, there remains a shortage of homes for sale. The lack of housing supply has been compounded by labor disruptions and expensive building materials that are driving up the cost of new housing, making it difficult for homebuyers to find homes to purchase.”

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.

Once again a week of low rates

May 19th, 2021

While rates remain slightly under 3.0% for many borrowers seeking to purchase new homes, the picking’s are quite slim as they say here in the South.  The housing shortage isn’t going away any time soon as buyers are finding out that new homes can be somewhat costly even though they may have sold their previous home for top dollar themselves.  According to some, they say that the costs have sky-rocketed for homes that are for sale and that if it weren’t for the great rates being offered by the mortgage industry, that they wouldn’t be shopping for a new home to live in at this time.  Rates were GREAT last years at time, but rates are a .25% better now than they were a year ago today!

For the week ending May 13, Freddie Mac announced that 30-year fixed rates decreased to 2.94% from 2.96% the week before. The average for 15-year loans fell to 2.26% and the average for five-year ARMs decreased to 2.59%. A year ago, 30-year fixed rates averaged 3.28%, more than 0.25% higher than today. Attributed to Sam Khater, Chief Economist, Freddie Mac – “Since the most recent peak in April, rates on home loans have declined nearly a quarter of a percent and have remained under three percent for the past month. Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers who could benefit from refinancing still aren’t pursuing the option. Additionally, the low rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer.”

ABBA First President, Rich Biagini, says that he would like to see more clients consider the option of refinancing now before rates make the turn and decide to go up again.  He believes that once the bottom is hit, that there will be no turning back and rates will take off like a rocket with inflation as its source of energy.

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.

Will the fear of inflation drive interest rates up? If so, when and how much?

May 14th, 2021

Whew.  Those are hard questions to answer without a crystal ball or a glimpse of the future from some other sort of source.  Historically speaking, when we see that 1) the average price for all other marketable goods that we purchase on a daily basis have gone up (which they have with regularity over the past several weeks), interest rates are sure to follow close behind.  2) Having a fuel/gasoline shortage has quickened the pace for the additional pricing added back into the mortgage interest rates from the lender, and this has made for an environment where rates are steadily worsening as a result of these two factors.*

Therefore, ABBA First Mortgage will work with ALL clients that apply for a mortgage and if qualified, should be able to obtain a rate that is as good OR BETTER than any rate available on any given day from any legitimate lender!  Please give me a call and I will gladly discuss this with you.  Rich at 910-332-0650  If you don’t call, you’ll never know what you missed out on!

According to Freddie Mac Chief Economist Sam Khater.  “Since the most recent peak (in home purchases) in April, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month.  Low rates offer homeowners an opportunity to lower their monthly payment by refinancing, and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option.”

While the low mortgage rate environment is good news for homeowners and borrowers, that doesn’t mean it’s sustainable due to the surging inflation rate in the economy. In April, consumer prices reached their highest level in 13 years, according to the US Labor Department and as mentioned above, continue to outpace the growth of the economy leading to these fears of inflation.

*To further emphasize my point”, Freddie Mac’s Sam Khater went on to say, “The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer”.