Mortgage Rates Stay Flat, But That’s a Good Thing
Based on Freddie Mac reports, the 30-year fixed-rate mortgage barely budged recently, remaining low at a 3.75% average. “Mortgage rates have essentially stabilized over the last two months, which reflects the recovery and improvement in the economy from the malaise earlier in the year,” says Sam Khater, Freddie Mac’s chief economist. “Going forward, the combination of low mortgage rates, tight labor market, and high consumer confidence should set up the housing market for continued improvement in home sales heading into late summer and early fall.”
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College Grads’ Magic Number for Home Ownership: $7,481
According to a new survey from Apartment Guide, college graduates are searching for a place to live, whether it’s a home of their own, a place to rent, or moving back with their parents. On average, $7,481 is their magic number, that’s what they say they need to move out of their parents’ house. Forty-six percent of Generation Z college students say they plan to rent or buy a home after graduation. However, 63% don’t know their current credit score, according to a survey of 250 members of Generation Z who are currently in college and shared thoughts about their housing plans following graduation. Many Gen Z respondents said that they plan to stay in their college area after graduation, while 29% say they plan to head back to their hometowns. Many respondents say they plan to live with their parents after graduating from college, which appears to follow in the footsteps of the older millennials, the survey notes. Homeownership is on their to-do list, however, they view moving in with their parents as a temporary move to save money and find a job. To read the full article on Apartment Guide’s survey findings, click here.
FHA Limits Cash-Out Refinances
Based on the Department of Housing and Urban Development’s latest report, refinancing your mortgage to take cash out using your home’s equity may not be as easy to do under new limitations on cash-out refinances. HUD announced recently that it’s lowering the loan-to-value requirements to cash-out refinances from 85% to 80%. HUD’s new rule will limit the number of homeowners who qualify for a cash-out refinance. The move is to lessen the risk for the Federal Housing Administration, which has seen an increasing number of borrowers who use these loans. “We are taking another important step to support sustainable homeownership that builds wealth for families,” says FHA Commissioner Brian Montgomery. “This is a prudent measure to make certain that we protect and preserve the home equity borrowers are building for their futures and guard against taxpayer losses from the FHA program.” The change will take effect on September 1st. The new rules align with Fannie Mae and Freddie Mac’s policies.
Contract Signings Point to Reversal in Home Sales Slump
According to the National Association of REALTORS®’ latest Pending Home Sales Index, home sales appear poised to reverse their downward trend, as contract signings in each of the four major U.S. regions rose in June. The index rose 2.8% to a reading of 108.3 in June. Contract signings are now up 1.6% year over year, ending a 17-month streak of annual decreases. NAR Chief Economist Lawrence Yun sees the increase as the likely start of a lasting trend for home sales in the coming months. “Job growth is doing well, the stock market is near an all-time high, and home values are consistently increasing,” Yun says. “When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”