Mortgage Rates Take Slight Dip – According to Freddie Mac’s chief economist Sean Becketti, mortgage rates were down across the board this week, lowering borrowing costs for potential home buyers and those looking to refinance. “After holding steady, rates dipped slightly over the last week,” said Becketti. “The 10-year Treasury yield fell roughly 7 basis points, while the 30-year mortgage rate dropped 4 basis points to 3.90 percent.”
Newbie Buyers Make Smaller Down Payments – Based on the National Association of REALTORS® 2017 Profile of Home Buyers and Sellers, about 60 percent of first-time home buyers put down 6 percent or less on a home purchase in September. The median down payment has dropped from 6 percent to 5 percent for first-time buyers. However, there are still many potential buyers on the sidelines who may be under the impression they need a bigger down payment before they can buy. NAR conducted a survey of non-homeowners earlier this year and found that most consumers believe they need a down payment of 10 percent or 20 percent to buy a home. “They may not be aware that these programs are available, and they may not be taking advantage of them,” said Jessica Lautz, NAR’s managing director of survey research and communications.
Homes Are More Affordable Than 20 Years Ago – According to the latest Mortgage Monitor Report by Black Knight Inc., homes are actually more affordable now than they were in the late 1990s. Interest rates have plunged by 40 basis points over the past six months. However, the bulk of the potential savings is offset by the accelerating rate of home price appreciation across the country. “Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept affordability near a post recession low,” says Ben Graboske, executive vice president of data & analytics for Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”
Is Housing Demand Turning Back to Homeownership? – The Multifamily Market Q3 Review and Outlook shows a rising homeownership rate that could threaten the multifamily sector. The homeownership rate in the third quarter rose to 63.9 percent. “Even a one-percentage point increase in the homeownership rate could subtract about 800,000 rental units from net absorption,” said Michael Cohen of CoStar. “Overall, it was a strong third quarter, which was a nice surprise. We’re still in the golden age for multifamily, but we’re seeing signs of a gradual slowdown in the apartment market.”