Skip to main content

Mortgage rates continued to rise!

WASHINGTON–Mortgage rates continued to rise

last week just as the spring buying season is approaching, but even though home prices have also been skyrocketing, the two trends are not expected to put much of a dent in a hot market.

The rising rates and prices, however, are expected to delay many potential buyers looking to purchase their first home.

After the average rate on the 30-year fixed mortgage hit a low of 2.75% at the end of January, it had risen to 3.45% as of last week, according to the Mortgage Bankers Association.

The average rate on the 30-year mortgage now stands at the same point at which it stood one year ago.  The same can’t be said for home prices, which are now up over 10% from this time in 2020, according to CoreLogic. Prices are expected to remain high due to the record low supply of homes for sale, noted MSNBC in its analysis.

MSNBC noted Homebuilders are not stepping up as much as hoped, because they are facing higher costs for land, labor and materials. They also continue to experience delays in getting materials to job sites, due to COVID-19.  Single-family housing starts came in much lower than expected in February, and the backlog of unbuilt homes is rising.

Permits Granted, But Projects Halted

"There has been a 36% gain over the last 12 month of single-family homes permitted but not started as some projects have paused due to cost and availability of materials," Robert Dietz, chief economist of the National Association of Home Builders, told MSNBC. "Single-family home building is forecasted to expand in 2021, but at a slower rate as housing affordability is challenged by higher mortgage rates and rising construction costs."

For a new home with an estimated median price of $346,757 in 2021 and the recent 30-year fixed-rate mortgage rate of 3%, a quarter percentage point increase in the interest rate would price out approximately 1.3 million households, according to a new calculation by the NAHB.

“The supply crunch of existing homes is only exacerbated by higher mortgage rates. Homeowners who sell would likely have to buy their next home at a higher interest rate, so that's a significant deterrent to moving,” observed MSNBC.

The number of newly listed homes for sale for the week ended March 13 was 24% lower year over year, according to realtor.com. The total number of homes for sale is now half of what it was a year ago, the report added.

Buyers Not Backing Off

The data show buyers are not backing off.

Buyers are in fact, "flooding the housing market early this year, eager to find a home of their own," according to Danielle Hale, realtor.com's chief economist. On average, homes are selling seven days faster than last year, MSNBC reported.

"This is the strongest seller's market since at least 2006," added Daryl Fairweather, Redfin's chief economist. "Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to."
 

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

New Analysis Sees Flat Mortgage Market for Next Several Years, Rates to Remain Above 6%

NEW YORK — The U.S. housing market could experience its weakest year in more than a decade as elevated mortgage rates suppress sales and keep home prices nearly flat, according to a Capital Economic s forecast. Capital Economics expects annual home sales to fall to about 4.7 million by the end of 2026, which would represent the slowest pace since 2011. After a modest recovery in 2025, homebuying activity has weakened this year as borrowing costs have increased amid renewed inflation concerns and expectations for higher Federal Reserve interest rates. “Strengthening economic growth will not provide much of a lift to the housing market, which we expect to remain in its structural malaise,” Capital Economics economists wrote, according to Business Insider. Mortgage Rates to Remain Above 6% Capital Economics expects mortgage rates to remain above 6% for at least two more years, continuing to constrain affordability and discourage homeowners with lower-rate mortgages from selling. The aver...
Post a Comment
Read Complete Article HERE>»

NCUA Says Credit Unions Can Move Immediately To Six Board Meetings A Year

ALEXANDRIA, Va.--NCUA notified federal credit unions Wednesday that it considers changes to board meeting requirements following enactment of the Credit Union Board Modernization Act as self-executing. That means a qualifying federal credit union may begin using a six-meeting schedule immediately by amending its bylaws, without being required to first submit them to the NCUA for approval, America's Credit Unions reported. ACU noted the new law amends Section 113 of the Federal Credit Union Act, replacing the requirement that a federal credit union board meet at least once a month to at least six times a year, with three tiers: Credit unions in their first five years of operation must meet at least monthly Federal credit unions with composite CAMELS ratings of 1 or 2 and corresponding management ratings of 1 or 2 have the flexibility to meet just six times per year, with at least one meeting per fiscal quarter, but can meet more often at their discretion Federal credit unions with...
Post a Comment
Read Complete Article HERE>»

Charting Your Career Path in the Age of AI: 6 Questions to Get You Started

By Peter Myers Increasingly, seasoned talent is stepping out of senior leadership roles and green talent is filling the void. By 2030, 21% of the population will be 65+ (a 25% increase over five years) and Gen Z will represent  ~30% of our workforce.  As institutional knowledge and wisdom voids are created, credit union leadership and governing bodies must also grapple with the reality that 32% of U.S. adults score below the baseline proficiency level in adaptive problem solving, and that a growing number are “ clustered at the bottom levels of proficiency .”   However, big changes also present big opportunities for those committed to developing their leadership skills.  Enter Generative & Agentic AI Not only is the composition of the workforce changing significantly, existing processes and jobs are being upended by Artificial Intelligence. Boards are asking for the AI strategy as employees fear being replaced. It’s a new and evolving landscape that r...
Post a Comment
Read Complete Article HERE>»

Bipartisan Bill Would Expand Federal Credit Union Investment Authority

WASHINGTON—Reps. Janelle Bynum (D-OR) and Young Kim (R-CA) introduced bipartisan legislation Thursday that would significantly broaden the investments available to federal credit unions, including giving them new authority to invest in corporate debt and asset-backed securities. Young Kim The Credit Union Investment Authority Act would amend the Federal Credit Union Act to expand federal credit unions’ investment authority. Under the bill, federal credit unions could invest in marketable debt obligations issued by companies and other organizations that are not limited to serving credit unions. The legislation would cap a credit union’s investment in the obligations of any single issuer at 10% of its paid-in unimpaired capital and surplus. The measure would also expressly authorize investments in asset-backed securities as defined under the Securities Exchange Act of 1934. Kathleen Coulombe The bill would require the NCUA board to issue implementing regulations within one year of enactm...
Post a Comment
Read Complete Article HERE>»

Inflation Cools in June Report, But One CU Economist Says There’s One Reason–And it Could Change

WASHINGTON — U.S. consumer inflation cooled more than expected in June, offering relief after several months of elevated price pressures, though economists cautioned the improvement could prove temporary as renewed geopolitical tensions threaten to push energy prices higher. The Consumer Price Index fell 0.4% in June on a seasonally adjusted basis, the largest monthly decline since April 2020, after rising 0.5% in May, according to data released Tuesday by the Bureau of Labor Statistics . Compared with a year earlier, consumer prices rose 3.5%, down from 4.2% in May.  Foot off the Gas Dawit Kebede “Falling gas prices led June’s decline and pulled headline inflation lower year-over-year. Renewed hostilities could complicate the energy picture ahead, and a reversal in gasoline costs would be the most likely channel for that pressure to show up,” said America’s Credit Unions Senior Economist Dawit Kebede. “But softening core prices point to broader-based moderation, suggesting the ea...
Post a Comment
Read Complete Article HERE>»

Liquidity Resources

Liquidity Resources Liquidity is a credit union’s capacity to meet its cash and collateral obligations at a reasonable cost. Adequate liquidity is necessary to efficiently meet both expected and unexpected cash flows and collateral needs without compromising the credit union’s daily operations or financial condition. Effective credit union management identifies, measures, monitors, and controls exposure to liquidity risk. Primary Risks In managing expected cash flows, a credit union may experience situations that increase its liquidity risk. These situations include mismatches between sources and uses of funds, market constraints on the ability to convert assets into cash or to access sources of funds (market liquidity), and contingent liquidity events. Changes in economic conditions or exposure to credit, market, operational, legal, and also can affect an institution’s liquidity risk profile. None of these risks are mutually exclusive, and interrelated risks may contribute to increase...
Post a Comment
Read Complete Article HERE>»

If Your Credit Union Wants a Future, Plan for It - By Todd M. Harper

The old Benjamin Franklin saying, “if you fail to prepare, you are preparing to fail,” rings true even today when credit unions fail to plan for their futures. For far too many credit unions, especially smaller ones, the failure to adopt and implement a succession plan needlessly exposes them to the whims of outside interests and the potential that a merger is their only option when senior leaders leave. An NCUA analysis found that poor management of succession planning was either a primary or secondary reason for nearly one-third of all credit union consolidations. While the pandemic initially slowed the pace, the number of mergers is now, once again, increasing. And the lack of a succession plan is a primary reason why. A succession plan allows an organization to prepare for the unexpected and thereby minimize service disruptions during management transitions. A credit union board’s failure to plan for the transition of its management could come with high costs, includ...
Post a Comment
Read Complete Article HERE>»

Know Before You Owe: Credit Cards

Know Before You Owe: Credit Cards : Wrtiten by Steve Van Beek Well, the CFPB wasn't lying when it stated its initial focus would be on mortgages, credit cards and student loans. We now have "Know Before You Owe" projects for each one Know Before You Owe: Mortgage Loans Know Before You Owe: Student Loans Know Before You Owe: Credit Cards Yesterday, the CFPB announced their first steps toward clarifying and condensing credit card agreements. Press Release Prototype Credit Card Agreement Listing of Definitions for Prototype Agreement The announcement also came with a pair of blog posts from the CFPB. Shopping for a Credit Card Making Credit Card Agreements Understandable Similar to the other Know Before You Owe projects, the CFPB is actively soliciting feedback on their prototype. Importantly, this is not a proposed rule . However, it is the CFPB's first steps toward collecting information and attempting to clarify credit cards for consu...
Post a Comment
Read Complete Article HERE>»

NCUA Confirms Periodic Membership Fee Ban for FCUs

  The NCUA has confirmed that federal credit unions cannot charge periodic membership fees, according to a letter it sent to the American Bankers Association last month. “FCUs may not charge periodic membership fees, but they may charge a uniform entrance fee and account or service-related fees,” NCUA General Counsel Michael McKenna wrote in the letter, which was dated May 1, 2015. “In a 1993 Legal Opinion Letter, No. 93-0226 , NCUA opined that the mention of the entrance fee without the mention of other membership fees forecloses on an FCU’s ability to assess annual membership fees.” Entrance fees and fees for account services and other financial products don’t count as membership fees, he said, and they can’t serve as a condition for continued membership. NCUA Confirms Periodic Membership Fee Ban for FCUs
Post a Comment
Read Complete Article HERE>»

Have You Lost that Loving Feeling?

Credit unions were founded on the righteous principle of “People Helping People”. For example, a plant worker’s car was wrecked and he needed a car to get to work. So, co-workers formed a credit union, pooled their savings and a loan was made for the car. This People Helping People mission has been part of the credit union psyche from day one. After all, there’s no one else in the financial services space that’s member-owned, has deep roots with a People Helping People mission, and is even recognized with tax advantages based on this altruistic foundation. But it seems as though many credit unions have lost sight of that “People Helping People” philosophy and are acting more like all the other financial institutions (FIs). It brings to mind the 1960’s Righteous Brothers classic “ You’ve Lost that Loving Feeling .” As the lyrics implore, it’s time to “Bring back that lovin’ feelin’ Whoa, that lovin’ feelin’ Bring back that lovin’ feelin’ ‘Cause it’s gone, gone, gone And I can’t go on, w...
Post a Comment
Read Complete Article HERE>»