Jim Beardsley Real Estate

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Could 2% define mortgage rates for the next decade? Mortgage rates have fallen from 12% in the 1980s January 4, 2021, 2:58 pm By Tim Glaze...Continue reading

The good, the bad, and the likely for housing in 2021 Hopes are high for a stronger 2021 December 23, 2020, 12:53 pm By Mark Fleming Despite the pandemic, incredibly, the housing market has surpassed all expectations in 2020. Applications to purchase a home hit a low point in the spring due to stay-at-home orders and mandated business closures, but have rebounded swiftly.... As of the week ending December 4, purchase loan applications have exceeded year-ago levels for 29-straight weeks, and cumulative purchase applications have surpassed 2019 levels. The pace of existing- and new-home sales mirrors the strength in purchase loan applications. New- and existing-home sales are at a post-Great Recession high. While the speed and magnitude of the housing recovery was surprising, the strong underlying fundamentals serving as tailwinds for the housing market’s recovery were not, and these tailwinds are expected to remain strong in 2021. 2021 housing market tailwinds: Rates, demographics and supply Low Mortgage Rates: According to our Potential Home Sales Model, the increase in house-buying power driven by historically low mortgage rates was a significant driver of the housing rebound from April through October. In 2021, consensus forecasts estimate the 30-year, fixed mortgage rate will likely be 3% with forecasts ranging from 2.8% to 3.3%. Low mortgage rates will boost house-buying power and keep purchase demand robust. Pent-Up Demographics: Millennials are the largest and most educated generational group in history approximately 72 million strong in 2019. The bulk of this generation turned 30 this year and are beginning to enter their prime home-buying years. More than half of all the purchase mortgages originated by Fannie Mae and Freddie Mac went to first-time home buyers in data available for 2020, and this trend shows no signs of abating in 2021. Our analysis shows that Millennials may account for at least 15 million home sales in the next 10 years. This is a conservative estimate that does not take into consideration the higher educational attainment and household income of this generation relative to their predecessors. Adding fuel to the housing demand fire is the increase in the personal savings rate, which climbed to an all-time high in April and remains above the historical average as pandemic-driven restrictions are limiting discretionary spending. For young people that are still employed, increased savings can be used as a down payment, which is typically the biggest hurdle for first-time home buyers. In 2021, older Millennials will continue to form households, recession or not, which will put upward pressure on demand for homeownership.

Homeowner Equity Insights Data Through Q3 2020 Introduction The CoreLogic Homeowner Equity Insights report, is published quarterly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes negative equity share and average equity gains. The report features an interactive view of the data using digital maps to examine CoreLogic homeowner equity analysis through the third quarter of 2020.... Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or both. This data only includes properties with a mortgage. Non-mortgaged properties (that are owned outright) are not included. Homeowner Equity Q3 2020 CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties*) have seen their equity increase by a total of $1 trillion since the third quarter of 2019, an increase of 10.8%, year over year. *Homeownership mortgage source: 2016 American Community Survey. Homeowner Equity Third Quarter 2020 Negative Equity Falls In the third quarter of 2020, the total number of mortgaged residential properties with negative equity decreased by 6.9% from the second quarter of 2020 to 1.6 million homes, or 3% of all mortgaged properties. On a year-over-year basis, negative equity fell by 18.3% from 2 million homes, or 3.7% of all mortgaged properties, in the third quarter of 2019. Homeowner Equity Report Third Quarter 2020

Mortgage rates hit another record low at 2.67% Rates are expected to stay low for the next year December 17, 2020, 10:00 am By Alex Roha... The average U.S. mortgage rate for a 30-year fixed loan fell four basis point this week to 2.67% the lowest rate in the Freddie Mac’s Primary Mortgage Market Survey’s near 50-year history. This week’s mortgage rate broke the previous record set on Dec. 3 and is the first time the survey has witnessed it fall below 2.7%. The housing market continues to surge higher and support an otherwise stagnant economy that has lost momentum in the last couple of months, said Sam Khater, Freddie Mac’s Chief Economist. Mortgage rates are at record lows and pushing many prospective homebuyers off the sidelines and into the market. Homebuyer sentiment is sanguine and purchase demand shows no real signs of waning at all heading into next year, Khater continued. The average fixed rate for a 15-year mortgage also fell last week to 2.21% from 2.26%. A Tuesday analysis from Fannie Mae’s Economic and Strategic Research group predicted rates would hit their trough at 2.7%, and since the 10-year Treasury yield has remained at or above 90 basis points through the beginning of December, mortgage spreads are continuing to compress. 5 reasons to refinance your mortgage right now If you’re thinking about refinancing your mortgage, here are five reasons why you might want to act now and reach out to a loan officer. Presented by: Citi While there may be some resistance to the 10-year yield consistently pushing above 1% in the coming months, with vaccination efforts and subsequent stronger economic growth, we expect Treasury yields to move higher over the next year, the Fannie Mae report said. Last week, Khater noted mortgage rates managed to retain their record low numbers despite higher Treasury yields resisting a typical correlation. A Wednesday statement from the Federal Open Market Committee revealed that the Federal Reserve plans to keep interest rates low until labor market conditions and inflation meet the committee’s standards. Fed Chairman Jerome Powell said to get inflation back to 2% though is going to take some time. Overall, Fed purchases have helped to drive mortgage rates and other loan interest rates to the lowest level on record by boosting competition for bonds, which compresses yields. With the release of the Fed’s latest intentions, Mortgage Bankers Association chief economist Mike Fratantoni said the MBA now expects the Fed to maintain these low rates at the zero level for years to come.