Loan Demand Gets a Lift From Rate Drop – The Mortgage Bankers Association reported Wednesday that interest rates dropped last week, giving homeowners and home buyers more incentive to lock in a lower rate as they apply for a mortgage. Total mortgage application activity for home buying and refinancing rose 3 percent on a seasonally adjusted basis compared to the previous week. The 30-year fixed-rate mortgage averaged 4.14 percent last week, down from 4.17 percent the week prior, the MBA reported.
Housing Responding to Multigen Trend – According to data from the Pew Research Center, more generations are sharing a roof as a growing number of adult children move back in with their parents and aging parents move in with their grown children. Nearly one in five Americans are now living in a multigenerational household (defined as a home with two or more adult generations or grandparents living with grandchildren). The number of multigenerational households in the U.S. has bloomed to the highest level since 1950. Economists say the main reasons for the uptick are rising home prices, higher child care expenses, increasing college debt, longer life expectancies, and the growth in diverse communities.
Freddie Mac to Restrict 1% Down Mortgages – Beginning on November 1st, mortgage financing giant Freddie Mac will begin to tighten restrictions on low down payment mortgages that allow borrowers to only contribute 1 percent of the home’s purchase price. Borrowers will now be required to come up with at least 3 percent in order to then receive any contribution from a lender. “Gifts or grants from the seller as the originating lender will be permitted only after a contribution of at least 3 percent of value is made from the borrower’s personal funds and/or other eligible sources of funds,” according to Freddie Mac’s new guidelines, issued last week.
Homeownership Rate Rebounds from 50-Year Low – The U.S. Census Bureau reported recently that the U.S. homeownership rate may have finally bottomed out, as the share of Americans who own homes is steadily climbing. The ownership rate posted an increase in the second quarter, reversing a sharp downward trend that began in the Great Recession. The homeownership rate was 63.7 percent in the second quarter. That marks nearly a full percentage point increase from a year ago. Last year, the homeownership rate had plunged to a 50-year low of 62.9 percent. “The addition of 1.2 million households being homeowners is clearly good news, as more households are participating in housing equity gains,” says Lawrence Yun, chief economist for the National Association of REALTORS®.
