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

Sunday Reading - Changing the Map

  Changing the Map     Redistricting, explained Congressional redistricting is the process by which states redraw electoral district boundaries   that determine representation in the US House of Representatives. The Constitution, federal law, and court rulings require districts to have roughly equal populations, avoid discrimination against racial or language minorities, and, in most states, be geographically contiguous. For most of American history, redistricting has followed a predictable cycle, occurring every 10 years after the census.   Gerrymandering is the deliberate manipulation of district boundaries to advantage one political party. Common tactics  by both major American political parties include packing opposition voters i...
Post a Comment
Read Complete Article HERE>»

Reuters: Trump Regulators Launch Biggest Bank Oversight Overhaul Since 2008

Is NCUA next? WASHINGTON—Federal banking regulators under President Trump are undertaking what Reuters described as the most significant overhaul of bank supervision since the 2008 financial crisis, shifting examiner focus away from process and compliance issues and toward what agencies consider “material” financial risks. According to Reuters, the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have directed examiners to concentrate on risks that pose direct threats to a bank’s safety and soundness, rather than on paperwork deficiencies, governance concerns or procedural issues that do not immediately affect financial stability. Reuters reported that regulators have also moved away from evaluating banks based on “reputational risk,” a supervisory concept long criticized by banks as overly subjective. The change follows complaints from President Trump and others that financial institutions have used reputational-risk considerations...
Post a Comment
Read Complete Article HERE>»

Hauptman Tells Congress CU Health is Strong; Responds to Questions from Committee

WASHINGTON — National Credit Union Administration Chairman Kyle Hauptman told members of the House Financial Services Committee on Thursday that the nation’s credit union system remains financially strong, while warning that rising delinquencies and consumer financial stress continue to warrant close monitoring. Hauptman also responded to a handful of questions from members of Congress, as well. Hauptman appeared as part of the regular hearings on Oversight of Prudential Regulators. Also appearing as witnesses were Michelle Bowman, vice chair for supervision with the Federal Reserve; Travis Hill, FDIC chairman, and Jonathan Gould, the acting Comptroller of the Currency. Kyle Hauptman In his prepared statement, Hauptman said federally insured credit unions remain well-capitalized and continue to meet members’ borrowing needs despite economic headwinds. He said the NCUA is focused on maintaining safety and soundness, protecting the National Credit Union Share Insurance Fund and creating...
Post a Comment
Read Complete Article HERE>»

The Rebounding Relevance of Adjustable-Rate Mortgages = By Kevin Hearden & Steve Rick

  This traditional mortgage lending product could help CUs attract high-contributing members and boost much-needed interest income. By Kevin Hearden & Steve Rick | August 19, 2022 at 03:33 PM Today, nearly three-quarters (72%) of credit unions’ total revenues come from interest income. So, when interest earnings as a percent of assets dropped almost 30% in April of this year, more than one alarm bell sounded within the movement. Credit union leaders across the country are rightly concerned about the sustainability of mortgage lending within what is already a highly competitive environment. In fact, lending executives participating in a May 2022 MGIC survey ranked the expected difficulty of 2022 at an eight out of 10. And while shiny startup strategies for boosting interest income make the headlines, it may be the resurgence of a traditional mortgage lending product that makes the difference. Borrowers Give ARMs a Fresh Look We’re talking, of c...
Post a Comment
Read Complete Article HERE>»

The Role of the Board Chair

Tim Harrington, CPA   CEO, TEAM Resources The Role of the Board Chair Recently I had the chance to spend some time with a great group of board members . One of the things we talked about was the role of the board chair. I thought this well worth putting down on *paper* as it were. The role of the chairperson is multi-faceted, complex, and often changing within the context of the organization’s dynamic. Unfortunately, there’s no perfect set of “rules.” But there are some guidelines. Here are our “tips” on navigating the position successfully: Roles Facilitator  – The board chair must draw together the individual directors into a team, working together on behalf of the membership and the credit union. To do that, s/he must wrangle individual personalities, draw out conversation from some, and rein it in from others. Having a solid understanding of the personalities of each director … and the CEO helps the chair keep things on track, moving forward, and civil. ...
Post a Comment
Read Complete Article HERE>»

Trump Accounts Program For Children Moves Forward With New Mobile App Launch

  WASHINGTON—The Treasury Department on Thursday announced the launch of the new Trump Accounts mobile app, marking the next phase of the Administration’s rollout of its new federally backed investment savings program for children ahead of the program’s official July 4 launch date. Donald Trump The app, now available through major mobile app stores, will serve as the primary platform for families to manage and activate Trump Accounts. Treasury Secretary Scott Bessent said the app is intended to give parents and guardians a “simple, secure way” to participate in the program, which was created under the 2025 Republican tax-and-spending package. Families that already submitted IRS Form 4547 to enroll children in the program will begin receiving phased activation emails between now and July 4, according to Treasury. Under the program, eligible children born between Jan. 1, 2025, and Dec. 31, 2028, can receive a one-time $1,000 federal seed contribution into a tax-deferred investment ac...
Post a Comment
Read Complete Article HERE>»

Cheer Up and Change: "Wait and see is not a plan."

I posted this a year ago and thought I would bring it back to see if any of his predictions came true. Take a look and tell us what you think. Grant Sheehan CEO Cheer Up and Change: The Demographic Mandate At a conference I recently attended Monday morning started off with a great session by demographer and futurist Ken Gronbach, who laid out his predictions on where we’re going and what we can expect as demographics change. I was pleasantly surprised that the future isn’t sounding as bleak as the news might have you believe. Gronbach offered lots of predictions for where our society and our world is headed. His predictions were given with a purpose: To help associations build their vision and plan for the future. As Gronbach stressed,  "Wait and see is not a plan." I’ve decided to arrange this recap into a list of my takeaways rather than a narrative recap. I hope you get as much out of this information as I did! Things to Expect: Big Changes in Retail : Gronbach ...
Post a Comment
Read Complete Article HERE>»

2 Historical Moments: CUNA Mutual Officially Changes Name Today, As Union Also Calls Strike

MADISON, Wis.–One of the most iconic names in credit unions and credit union history in the U.S. will officially change today when CUNA Mutual Group begins operating under the TruStage brand across the enterprise. All enterprise, business-to-business and consumer brands are now unified under the single brand name of TruStage, which the company has been using for some of its products for a number of years. The new brand is being introduced at the same time approximately 450 employees represented by Office & Professional Employees Local 39 have gone on strike. It is the first strike in the company and the union's history. As CUToday.info has been reporting, the company and the union have been at an impasse since February of 2022, when t...
Post a Comment
Read Complete Article HERE>»

Supplemental Capital to be Considered by NCUA

Supplemental Capital At the NCUA’s October board meeting, senior staff of the NCUA submitted a briefing report (the “Report”) to the NCUA Board (the “Board”) on the issues concerning the use of supplemental capital by federally insured credit unions (“FICUs”).  The use of supplemental capital presents a number of regulatory and policy issues that would need to be addressed prior to authorizing this form of capital for all FICUs.  The Board considered issuing an advanced notice of proposed rulemaking (“ANPR”) in the near future which would give credit unions and the public the opportunity to provide comment before the proposed rule stage.  Supplemental capital does not provide any capital support under the NCUA’s net worth requirements because it does not count as equity under generally accepted accounting principles, but it would allow FICUs to have a greater concentration of member business loans and long term mortgage loans since it could be used by FICUs to meet...
Post a Comment
Read Complete Article HERE>»

Ransomware: 'It's A Growing Issue'

MADISON, Wis.—Ransomware attacks, already a quiet concern that has been growing among credit unions, are expected to dramatically increase this year—with one analyst saying there is “no silver bullet” to prevent the threat. Ransomware is a type of malicious software designed to block access to a computer system or PC until a sum of money is paid. In the case of a financial institution, crooks first use the malware to encrypt the contents of the FI’s data and then extract a ransom in exchange for decrypting the information and allowing the victim to regain access. It’s an issue, according to one regulator source who asked for anonymity that has been growing within credit unions, many of which have paid ransoms to regain access to their data and have chosen not to speaking publicly about the crime. “This has become a huge problem,” said Ken Otsuka, senior consultant in CUNA Mutual Group’s risk management department, adding that CUNA Mutual Group’s cyber liability coverage data d...
Post a Comment
Read Complete Article HERE>»