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Mortgage Rates Settle In, Hovering Around 3% – Inman
BY MATT CARTER
May 20, 2021

So far, bond markets are taking the prospect of Fed tapering of monthly purchases of $40B in mortgage-backed securities and $80B in Treasuries in stride

Mortgage rates were up slightly during the week ending May 20, as borrowers with excellent credit putting 20 percent down were offered rates averaging 3.00 percent on 30-year fixed-rate purchase mortgages.

That’s according to the latest weekly rate survey from Freddie Mac, which showed rates registering their first weekly increase in May. The survey, which records rates going back to 1971, showed 30-year, fixed-rate mortgages hitting an all-time low of 2.65 percent during the week ending Jan. 7, before heading back up to 3.18 percent in March.

“After a run up over the first few months of the year, rates have paused and hovered around three percent since March,” said Freddie Mac Chief Economist Sam Khater, in a statement. “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.”

Freddie Mac reported average rates for the following mortgage types for the week ending May 20:

• Rates on 30-year fixed-rate mortgages averaged 3.00 percent with an average 0.6 point, up from 2.94 percent last week but down from 3.24 percent a year ago.
• For 15-year fixed-rate mortgages, rates averaged 2.29 percent with an average 0.7 point, up from 2.26 percent last week but down from 2.70 percent a year ago.
• Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.59 percent with an average 0.3 point, unchanged from last week and down from 3.17 percent a year ago.

In a new forecast this week, Fannie Mae economists said they expect a gradual rise in rates this year and next, with 30-year fixed-rate mortgages averaging 3.5 percent by the final quarter of 2022. But inflation worries could drive steeper rate increases, they warned.

Minutes from the April 27-28 meeting of the Federal Reserve’s Federal Open Market Committee published Wedensday revealed that some Fed officials are open to debating whether to taper the Fed’s monthly purchases of $40 billion in mortgage-backed securities and $80 billion in Treasuries.

Those purchases help keep long-term interest rates low, and word that the Fed might consider tapering in the months ahead initially sent yields on 10-year Treasurys, a benchmark for mortgage rates, to soar. But 10-year Treasury yields were down Thursday, as investors continued to weigh the likelihood of the Fed tapering its bond purchases.

Even small moves in mortgage rates can have a big impact on homebuying power. A recent analysis by First American concluded that higher mortgage rates in March contributed to a $13,000 decline in homebuying power nationally.

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Jordan Cohen, the top RE/MAX agent in the world, calls the luxury Ojai ranch – complete with 35 miles of hiking trails, an auto museum and private lake – a groundbreaking listing.

Hold on to your hats: This $100 million luxury ranch is unlike any other.

Black Mountain Ranch in Ojai, California, is a prestigious 3,600-acre working cattle and horse ranch that consists of 63 consecutive parcels of land. Called an “absolute epic one-of-a-kind property” by listing agent Jordan Cohen, Black Mountain Ranch features a 13,250-square-foot main residence in addition to a 6,203-square foot carriage house, 1,965-square-foot caretaker cottage and 1,800-square-foot guest cottage. For anyone keeping track, that’s already 23,218 square feet of living space on the mountain-view property.

Additional features include an automobile museum, multiple barns, private fishing lake, shooting range and 35 miles(!) of serene nature trails.

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Read more coverage of this listing in the Los Angeles Times.

Cohen of RE/MAX One in Westlake Village, California, is no stranger to exceptional luxury properties. Last year, one of his most notable listings was basketball star Anthony Davis’ Westlake Village house.

One of the biggest questions in real estate today is, “When will sellers return to the housing market?” An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers’ market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.

The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say it’s a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, indicates:

“Consumer positivity regarding home-selling conditions nearly matched its all-time high.” (See graph below):

Fannie Mae isn’t the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.com, shares:

“The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under $350,000, which would offer a tremendous boost to affordable housing for first-time buyers.”

Bottom Line

If you’re considering selling your house, don’t wait for more competition to pop up in your neighborhood. Let’s connect today to explore the benefits of selling your house now before more homes come to the market.

Some Highlights

• Selling a house is no small task. If you decide to try to do it on your own, keep in mind you’ll be responsible for all the expert-level work of a real estate professional.
• The vital tasks an agent manages for you include listing and marketing your house, handling legal documentation, negotiating with all parties, and navigating local laws and regulations.
• If you’re ready to sell while the market is in your favor, let’s connect to make sure you have the professional expertise you need every step of the way.

Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert.

According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:Due to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year.

Bottom Line

In such a hot market, it can feel as though the supply of homes has virtually dried up, leaving buyers to wander in an inventory desert. That’s why there’s never been a better time to sell. To a parched buyer needing to secure a home as soon as possible, your house could be a true oasis.

by The CE Shop Team
How Biden’s Jobs & Infrastructure Plan Would Affect Housing | The CE Shop

President Biden Commits to Addressing Affordable Housing Crisis

President Joe Biden’s $2.3 trillion jobs and infrastructure proposal includes a $213 billion investment in affordable housing, pledging to “build, preserve, and retrofit more than two million homes and commercial buildings to address the affordable housing crisis.”

The proposal, called the American Jobs Plan, has faced significant Republican opposition since it was released in March. It’s one of two sweeping economic initiatives that Biden has introduced in his first few months as president. The second, the $1.8 trillion American Families Plan, focuses on children, families, and education.

Biden’s Plan Addresses “Severe Shortage of Affordable Housing”

“There is a severe shortage of affordable housing options in America,” the American Jobs Plan says. “Millions of families pay more than half their income on rent, and home energy costs are a significant concern for American renters as well. And, across the country, people are struggling to purchase their first home.”

Soon after the proposal was unveiled, National Association of Realtors® President Charlie Oppler released a statement of support, praising the Biden administration for recognizing the importance of affordable housing.

“NAR thanks President Biden and his administration for recognizing that housing represents a critical piece of our nation’s overall infrastructure,” Oppler said. “While a lack of inventory and rising prices continue to limit opportunities for homeownership — especially for younger Americans and minority populations — policies that support nationwide housing affordability are now more important than ever.”

Oppler also emphasized the importance of the plan’s investment in broadband internet access. The American Jobs Plan promises to “bring affordable, reliable, high-speed broadband to every American, including the more than 35% of rural Americans who lack access to broadband at minimally acceptable speeds.”

The statement says that the National Association of Realtors® supports the creation of a comprehensive national policy to stimulate the deployment of broadband in underserved areas, increase data speeds, and lower broadband prices.

“Broadband access is no longer a luxury, it is a critical utility,” Oppler said. “That was true before the pandemic, and even more so now.”

What’s in the American Jobs Plan?

The proposal identifies five ways that the $213 billion would be used to address the affordable housing crisis.

In addition to creating more affordable housing, Biden takes aim at “exclusionary zoning laws and harmful land-use policies” such as minimum lot sizes, mandatory parking requirements, and prohibitions on multi-family housing, arguing that they “have inflated housing and construction costs and locked families out of areas with more opportunities.”

Also, because “years of disinvestment have left our public housing in disrepair,” Biden is calling on Congress to allocate $40 billion to improve the infrastructure of the public housing system in the United States.

“The President’s plan will help address the growing cost of rent and create jobs that pay prevailing wages, including through project labor agreements with a free and fair choice to join a union and bargain collectively,” the plan says.

The American Jobs Plan would:

• Produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy-efficient, and electrified housing units.Through targeted tax credits, formula funding, grants, and project-based rental assistance, the plan would extend affordable housing rental opportunities to underserved communities nationwide, including rural and tribal areas.
• Build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers.Biden is calling on Congress to pass the Neighborhood Homes Investment Act (NHIA). Offering $20 billion worth of NHIA tax credits over the next five years would result in approximately 500,000 homes being built or rehabilitated, creating a pathway for more families to buy a home and start building wealth.
• Eliminate exclusionary zoning and harmful land-use policies.Biden is calling on Congress to enact a new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.
• Address long-standing public housing capital needs.Biden is calling on Congress to invest $40 billion to improve the infrastructure of the public housing system. This funding would address critical life-safety concerns, mitigate imminent hazards to residents, and undertake energy efficiency measures that will significantly reduce ongoing operating expenses. The plan says that these improvements would especially benefit women, people of color, and people with disabilities.
• Put union building trade workers to work upgrading homes and businesses to save families money.The plan would upgrade homes through block grant programs, the Weatherization Assistance Program, and by extending and expanding home and commercial efficiency tax credits. It also would establish a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into distributed energy resources; retrofits of residential, commercial, and municipal buildings; and clean transportation. These investments would have a particular focus on disadvantaged communities that have not yet benefited from clean energy investments, the plan says.

For more information on the proposal, you can read it in full on the White House website.

Impact on the Housing Market

Although the American Jobs Plan addresses many of the difficulties that low-income homebuyers and renters face in the housing market today, some experts caution that it doesn’t do enough to solve the crisis.

“It’s a historic amount of money, but we have a historic-size problem, and even this amount of money is not going to solve the problem,” David Dworkin, president of the National Housing Conference, told HousingWire.

Some say that even if the plan is passed, it might not be enacted quickly enough to meet the urgent need.

“Anything that can help increase the number of housing units is a good thing. And the consideration of enhancing the affordable choices is vital,” said Tim Sullivan, senior managing principal at Zonda, a housing market research firm, in an interview with Forbes. “Is this sufficient? Probably not since we need the additional housing now, and given the speed at which the government moves, I think there will be a lag in bringing this product to market.”