Mortgage Rates Hold at Low Levels – According to Freddie Mac, home shoppers are getting another week to lock in some of the lowest mortgage rates of the year. “Following last week’s sharp decline, the 10-year Treasury yield rose 3 basis points this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate remained relatively flat, falling 1 basis point to 3.90 percent. Mortgage rates are continuing to hold at year-to-date lows amidst ongoing economic uncertainty.”
New-Home Prices Hit Record High – The Commerce Department reported the median price for a new single-family home reached a record high in May of $345,800. Buyers will be paying a premium for new construction, as new-home prices are now 16.8 percent higher than they were a year ago. So far, however, the higher price tags don’t seem to be spooking home shoppers. In May, 61,000 new homes were purchased—a 2.9 percent increase from April and an 8.9 percent increase from a year ago. “Builders are focused on the mid to upper end of the housing market,” says Joseph Kirchner, realtor.com®’s senior economist.
Loan Closing Times Decrease – New data from Ellie Mae shows the ultra-tight housing market has created fierce competition among buyers for available listings which has put pressure on lenders to close loans faster. Over the past two months, home loans have moved from application to the closing at the quickest pace in over two years. In May and April, loans passing through Ellie’s Encompass platform closed on average in 42 days, down nine days since January and the fastest rate since February 2015. This number represents the average closing time for all loan types, and includes refinance and home-purchase loans. Among the loans times, conventional loans were the quickest through the pipeline, at 42 days, followed by Federal Housing Administration (FHA) loans, at 43 days, and Veteran Affairs (VA) loans, at 45 days.
Lifeline for Home Buyers With Student Debt – Fannie Mae made changes last month to make it easier for home buyers with college debt to qualify for financing. If loan applicants are getting their car payments or student debts taken care of by someone else, for example, those payments will not be factored into their DTI calculation. Borrowers making student loan payments that are smaller than their original repayment agreement will see their smaller payments being factored into their DTI calculation. Existing homeowners can get improved repayment terms on a cash-out refinance if the loan is for paying down student debt. Additionally, Fannie Mae’s maximum allowable DTI will rise at the end of July from 45 percent to 50 percent. With these changes in effect, customers who did not meet DTI requirements or who had a previously high DTI can reapply for a home mortgage loan and have a chance at getting different results.
