A new twist on lending…The cost of a home loan will go down for bad credit scores and increase for good credit scores…

The headline of this article is not clickbait nor sensationalism. In fact, it’s based on something that’s about to happen. Fannie Mae, which, along with Freddie-Mac, is involved in almost two-thirds of the home loans in the United States, is set to release a new Loan Level Price Adjustment Matrix (LLPA) on May 1, 2023. The LLPA is used by lenders to determine the cost (interest rate) of a loan for a borrower, and it’s not entirely new, as there’s an existing one already in effect. The new LLPA is similar to the current one, as it also charges varying amounts based on the loan to value (LTV) and credit score.

What’s different in the new LLPA is that the cost is going up for borrowers with better credit and going down for borrowers with a lower credit score. To explain briefly how LLPA works, the higher the percentage of the purchase price a borrower is borrowing, the higher the fee. This percentage is known as the “LTV.” It makes sense that a loan where the borrower made a smaller down payment (e.g., 3%) has more risk associated with it than a loan where the borrower made a 20% down payment. Furthermore, the higher the credit score a borrower has, the lower the fee will be. This is because credit scores are based on past payment performance, and it’s logical that there’s less risk to a lender for a mortgage where the borrower has a higher credit score.

Borrowers with a higher credit score will still get better rates:

It’s essential to point out that Fannie Mae hasn’t entirely lost its mind by charging higher-risk borrowers less than it’s charging lower risk borrowers. For instance, a borrower with a 740 credit score borrowing 95% or more of the purchase price will be charged a 0.125% LLPA fee come May 1st, while a borrower with a 630 credit score borrowing the same amount will pay a cost of 1.75%. So, the borrower with the worst credit score will pay an LLPA fee approximately 14 times higher than a borrower with the best credit score.

So what’s the big deal then, what’s different?

The headlines surrounding this change relate to how Fannie Mae has adjusted its current pricing. The change appears to punish better credit risk borrowers and reward higher risk borrowers. For example, a borrower making a 20% down payment with a high credit score will be charged higher rates come May 1st. In contrast, a borrower with the same down-payment but a lower credit score will get charged a lower rate than the current one. Currently, a borrower with a 740 credit score is charged a 0.50% LLPA fee, but beginning May 1st, that charge will go up to 0.875%. However, a borrower with a credit score of 639 currently is charged 3.0%, and on May 1st, that will drop to 2.75%.

Some high credit, strong borrowers will benefit, but overall the winners are borrowers with the worst credit scores…

Continue reading “A new twist on lending…The cost of a home loan will go down for bad credit scores and increase for good credit scores…

Mortgage Interest Rates Top 7 Percent for first time in over 20 years

Today, the interest rate for a 30-year fixed-rate mortgage hit 7.08% marking the first time in over 20-years the rate has gone above 7%.  Historically speaking, as the 2nd chart shows, this is not that high of an interest rate and, in fact, lower than the median rate over the past 50 years, however, it’s a very high rate based upon the the recent past.

The affect of interest rates on home prices…

Interest rates just began increasing in the past few months, rising above the 4% level in February, so it will take time to see the impact of this on home prices.  We’re beginning to see the effect in prices somewhat, particularly with the decrease of “overbids” and an increase in reduced prices on active listings, but nothing too dramatic yet.  For example, as the bottom chart shows, the median price of homes sold in St Louis in August was $280,000, a nearly 11% increase from the median price of $252,450 a year ago. Since home prices typically peak around June, they are usually lower in August than June or July.  If we examine this to see if perhaps there was a bigger decline in those months this year than last we find that last year prices dropped 3/4 of 1% from June to July and then dropped 4% from July to August, for a total decline of 4.7% from June’s peak to August.  This year, prices dropped 3.9% from June to July, then 1.7% from July to August for a total decline of 5.6%, only slightly higher than last year.  I do think we’ll see a larger impact than this, but thus far it’s not so bad.

 

Mortgage Interest Rates Based Upon the MND Rate Index

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Mortgage Interest Rates Based Upon the MND Rate Index

30-Year Fixed Rate Mortgage Interest Rates 1970-Present

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30-Year Fixed Rate Mortgage Interest Rates 1970-Present

St Louis 5-County Core Home Prices and Sales – Past 25 Months

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St Louis 5-County Core Home Prices and Sales - Past 25 Months

Mortgage Rates Fall Slightly to Lowest Level In Two Weeks

After hitting the highest rate in over 13 years just two weeks ago at 6.28%, as the chart below shows,  mortgage interest rates on 30-year fixed mortgages declined today to 5.75%.  The likelihood of interest staying under 6% is hard to to say at this time but I would say enjoy it while it lasts!

Mortgage Interest Rates – 30 and 15-Year  Conventional Loans, FHA Jumbo and and 5/1 ARM LoansMortgage Interest Rates - 30 and 15-Year  Conventional Loans, FHA Jumbo and and 5/1 ARM Loans

Mortgage Rates Hit Highest Level In Over 13 Years

The bond market had one of the worst days in history yesterday resulting in mortgage interest rates on a 30-year fixed rate mortgage hitting 6.0% and above.  This is the highest rates have been since November 20, 2008 when the mortgage interest rates were 6.04%, according to Freddie Mac’s Primary Mortgage Market Survey®.

Is there a silver-lining to the higher interest rates?

Given that the reason for the higher interest rates has to do with our high inflation rates and declining economic conditions, it’s hard to find much positive to say about what is happening.  Having said that, the one thing that comes to mind is these rate increases will no doubt slow down the rapid price growth on homes we’ve seen over the past couple of years.  This will likely cause home prices to flatten and the premiums buyers have paid over and above what the buyer, seller and agents involved knew the home was actually worth are history in my opinion.

So, while as a buyer, you will be facing higher interest rates than you would have a year ago, you should receive some relief in the price not being as high as it would have if the low rates were still here, less competition due to some buyers leaving the market and being able to purchase a home without paying a significant premium above the value to get it.

Mortgage Interest Rates – 2000-Present- 30-year fixed rate mortgage

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Mortgage Interest Rates - 2000-Present- 30-year fixed rate mortgage

St Louis Home Saw Second-Largest Decrease In Home Loan Originations Of Metro Areas In The U.S.

There were 2.71 million home loan originations during the first quarter of this year in the U.S., according to the U.S. Residential Property Mortgage Origination Report from ATTOM.  This is an 18% decline from the prior quarter, the largest quarterly decline since 2017  and marks the fourth straight quarterly decline in loan originations according to the report.

Refinancing saw a bigger decline than home purchases…

During the first quarter of this year there were 1,446,622 loans originated that were refinances of existing mortgages which is a decline of 21.7% from the prior quarter. There were 1,011,975 loans originated for home purchases during the quarter and this was down 18.3% from the prior quarter.

St Louis is the metro that saw the second-highest decline…

I according to the report the metro area with the largest quarterly decrees and loan origination’s for home purchases was Huntsville Alabama with a 61.3% decrease followed by St Louis Missouri with a 55.3% decrease.

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Mortgage Rates Have Increased Significantly This Year

As the charts below illustrate, at the beginning of this year, mortgage interest rates for a 30-year conforming conventional loan were at 2.771%, FHA loans were at 2.703%, and VA loans were at 2.372%.  As of yesterday, those rates have increased to 3.357%, 3.468%, and 3.101% respectively.

While conforming 30-year conventional loans have seen an increase of 21% in rates (from 2.771% to 3.357%), FHA loans have seen an increase of 28% (from 2.703% to 3.468%) and VA loans have seen an increase of 30% (from 2.372% to 3.101%).

What does this mean in terms of the cost of a home?

To make the comparison simple, I’ll just base my comparison on the price of a “typical” home in the St Louis 5-county core market using the median price of homes sold in October which was $234,900.  Downpayments will vary based upon loan type from no downpayment being required on a VA loan, to a minimum of 3% on a conventional and 3.5% on an FHA but based upon a loan amount equal to the median price of $234,900, below are the differences in the monthly payment on that amount by loan type from the beginning of this year until now:

  • Conventional – $948 to $1,023
  • FHA – $939 to $1,038
  • VA –  $898 to $990

If we factor in the increase in home prices, it gets worse.

In the “to add insult to injury” category, home prices have increased significantly since January as well,  In January the median price was $215,000, so between then and October the median price of a St Louis home increased 9.2%.  With the interest rates increasing at the same time the cost of a typical St Louis home increased fairly significantly as shown below:

  • Conventional – $867 to $1,023 (+18%)
  • FHA – $859 to $1,038 (+21%)
  • VA –  $821 to $990 (+21%)

The moral of the story…don’t wait to buy.

While I certainly can’t predict the future, especially given all the uncertainty in our economy with inflation, employment issues, etc, if I were in the market to buy a home I don’t think I would wait “until things get better”.  The reason for my opinion is, as I’ve illustrated here, the true “cost” of a home (assuming you are not paying cash for it) is a combination of price and interest rate. So, even if home prices see an adjustment or the seasonal dip we often see during winter if interest rates continue to rise, is the higher cost of borrowing going to offset the lower price?  I think that is a possibility.  Or, the flip side, if interest rates go down but then prices go up, is the savings in lower rates lost?

To benefit from waiting, in terms of the cost of the home, we would need interest rates to stay the same, or decline and home prices to decline or interest rates to drop and home prices stay the same.  Right now I don’t see either of the two aforementioned scenarios likely to happen.

Continue reading “Mortgage Rates Have Increased Significantly This Year

The House Payment on a Typical St Louis Home has increased just over 5% in 14 years

Anyone paying even a little attention to the St Louis real estate market will likely be aware of the fact that we have been in a strong seller’s market for the past couple of years and St Louis home prices, as a result, have increased significantly.  In fact, as the infographic below shows (exclusively available from MORE, REALTORS®) the median home price for a St Louis home has increased more than 50% in the past 14 years.  However, the good news is that during that same period mortgage interest rates have fallen and remained low resulting an increase in the house payment on a typical home increase just over 5% during the same period!

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The Cost of a St Louis Home Comparison 2007 - 2021

Mortgage Interest Rates Decline After Peaking In Spring

Mortgage interest rates dropped peaked in the spring of this year with the rate on a 30-year fixed rate conventional loan hitting 3.353% in mid-March then staying near that range until mid-April when rates started to ease.  In mid-June the rate had crept back up to 3.229% but last week dipped below 3% to 2.982%.  As of yesterday, the rate has increased slightly but is still just a tad over 3% (3.019%).

Mortgage Interest Rates – 30 Years Conforming Conventional Loan -Past 12 Month Period

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Mortgage Interest Rates - 30 Years Conforming Conventional Loan -Past 12 Month Period

 

Mortgage Interest Rates Dip Below 3 Percent Last Week For The First Time In 2 Months

Mortgage interest rates dropped below 3% this past week with an average interest rate of 2.97% on a 30-year fixed-rate mortgage according to the Freddie Mac Primary Mortgage Market Survey.  As the chart below shows, mortgage interest rates have not been below 3% since February 25, 2021 when they also averaged 2.97%.  Rates are still up from the record low rate of 2.65% in January, but as you can see on the chart, are still at a rate that is historically low!

Now is the time to buy or perhaps refinance your existing mortgage.

Anyone that has been thinking of buying a home should, if able, shift into high geat and find one now to take advantage of the low rates and the increased buying power that comes with it.  The first step would be to get yourself pre-approved and, for that, I would recommend Michael McCarthy with Flat Branch Home Loans…he’s great and our firm does a lot of business with him.  You can find his info at STLBestLender.com.  If you a homeowner with a mortgage and no plans to move, I would also suggest you get in touch with Mike to see how much money you can save by refinancing your existing mortgage at a lower rate.

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Mortgage Interest Rates – 30 Year Fixed-Rate

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Mortgage Interest Rates - 30 Year Fixed-Rate

 

St Louis is ranked 6th most competitive housing market in the U.S.

LendingTree just released a list of the 50 large metro areas with the most competitive housing markets in the U.S. on which St Louis was ranked as the 6th most competitive market.  This list was based upon LendingTree’s assessment of the quality  of the buyer’s in each market, based upon their strength as a buyer from a financing standpoint.

So, while not an analysis of which cities have the most buyers showing up at a listing or where listings are receiving the highest number of offers, it’s about the quality of the home buyer’s from a competitive standpoint.  This makes sense, as today the hard part isn’t necessarily finding a buyer for a new listing, it’s about the listing agent analyzing the offers and helping the seller determine not only which may have the best terms, but which buyer has the best ability to perform.  After all, having a great offer doesn’t really mean anything if the deal doesn’t close.

Most Competitive Housing Markets

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Most Competitive Housing Markets

In analyzing the quality of the buyer’s and assessing the competitiveness of each market, LendingTree took into consideration the following for each metro area:

  • The share of home buyers shopping for a mortgage even before they found the house they wanted.  This is indicative of a good buyer that wants to be prepared to react quick and understands the importance of being pre-approved to be make their offer more attractive to the seller.
  • The average down payment percentage.  A buyer with a larger downpayment is going to look like a stronger buyer to a seller.
  • Percentage of buyers have have good credit (above a 680 credit score).   Better credit means more financing options and lower cost financing which can enable the buyer to pay more than someone with lower credit and have the same monthly cost in terms of payment.  A better credit score also means there is a better chance of the deal closing.

A good buyer’s agent will know everything above and help their client through the process to make them have the best chance possible of getting their offer accepted.  Likewise, a good listing agent will know how to scrutinize buyer’s and help their seller client pick the one that not only has offered an acceptable price and terms but has the highest likelihood of closing.  For a recommendation of a great St Louis buyer’s agent or listing agent, contact me.

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COVID-19 Pandemic Driven Serious Mortgage Delinquencies To Highest Levels Since The Great Recession

According to a report just released by the Consumer Financial Protection Bureau (CFPB), titled “Housing insecurity and the COVID-19 pandemic“, there are over 2 million homeowners that have fallen behind at least three months on their mortgage payments.  This represents a 250% increase from pre-Covid-19 levels and is now at a level we haven’t seen since the height of the Great Recession in 2010.

Homeowners with an FHA mortgage delinquency rates double rate for all loans:

As the chart below shows, homeowners with an FHA mortgage hit a serious mortgage delinquency rate of 10.8% during the 3rd quarter of 2020, with the rate for all mortgages was just under half that at 5.2%.

Serious Mortgage Delinquency Rate By Loan Type- Q1 2005 – Q3 2020

Seroious Mortgage Delinquency Rate By Loan Type- Q1 2005 - Q3 2020

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Continue reading “COVID-19 Pandemic Driven Serious Mortgage Delinquencies To Highest Levels Since The Great Recession

Fannie Mae & Freddie Mac Increase Maximum Loan Amounts

Last week, the Federal Housing Finance Agency  (FHFA)announced that effective January 1s, 2021, the maximum loan amounts for Fannie Mae and Freddie Mac conforming loans will be increased from $510,400 to $548,250.  Once a home buyers loan amount exceeds the Fannie and Freddie limits, their loan is considered a “jumbo” loan and typically less attractive terms, so an increase in the Fannie and Freddie limits is definitely helpful to home buyers in higher price ranges.

Fannie Mae and Freddie Mac are also increasing the loan limits for loans to purchase multi-family properties as well.  The multi-family property limits for 2021 are:

  • Two Units – $702,000
  • Three Units – $848,500
  • Four Units – $1,054,500

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Mortgage Interest Rates Expected To Continue Falling Until Hitting 2.9 Percent Next Year

Fannie Mae issued their monthly housing forecast for April which includes, among other data, a forecast of what mortgage interest rates will be in the coming months.  Last months forecast had projected that mortgage rates would continue to decline moving forward but only to a low of 3.1% before the end of 2021 while the April forecast predicted the interest rate on a 30-year fixed-rate mortgage would fall to 2.9% in the 2nd quarter of 2021 and stay there through the balance of the year.

If you’re able, now’s the time to buy!

While the effects of the COVID-19 pandemic, such as job loss, is going to take some would-be home buyers out of the market, for those that are still able to buy, now is a great time to buy a home.  There are many factors that play in favor of buyers today, such as the fact that there are about 1/3 fewer of them (buyers in the market) now than this time last year, sellers that want to have fewer people coming through their homes and interest rates.  As our chart below shows, not only are rates low now, they are projected to go much lower even.

Why not wait until next year when the rates hit their lowest?

Good question, but there are several reasons not to wait.  First off, the rates shown on my chart are “projections”, or to put it another way “an educated guess”, so there is no guarantee rates will actually come down as predicted.  In addition, once the stay at home orders go away and we start moving back to something closer to normal, I anticipate there will be a flood of buyers to the market which, along with lower interest rates (if that happens) will likely drive home prices up.  So, for buyers that are able, they may get a better buy today, with less competition, still get a good interest rate and then if rates do fall as predicted can easily refinance to take advantage of lower rates.

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Fannie Mae Mortgage Interest Rate Forecast April 2020 (Chart)

Fannie Mae Mortgage Interest Rate Forecast April 2020 (Chart)

Data source: Fannie Mae – Copyright ©2020 St Louis Real Estate News, all rights reserved

HUD To Allow Homeowners Impacted by COVID-19 To Defer House Payments For Up to a Year

As a result of the COVID-19 National Emergency Servicing and Loss Mitigation Program declared by President Trump, the U.S. Department of Housing and Urban Development (HUD) sent a letter yesterday to its loan servicers making them aware of new COVID-19 National Emergency Loss Mitigation Options.  HUD told the lenders that the new options for borrowers go into effect immediately but the lender must implement them no later than April 30, 2020.

Highlights of the new forbearance plan:

  • The Mortgagee (lender)  must not deny COVID-19 National Emergency Home Retention Options to Borrowers that experience an adverse impact on their ability to make on-time Mortgage Payments due to the COVID-19 National Emergency and satisfy the loss mitigation criteria set forth in this section.
    • (A) Forbearance for Borrowers Affected by the COVID-19
      National Emergency If a Borrower is experiencing a financial hardship negatively impacting their ability to make on-time Mortgage Payments due to the COVID-19 National Emergency and makes a request for a forbearance, the Mortgagee must offer the Borrower a forbearance, which allows for one or more periods of reduced or suspended payments without specific terms of repayment.
    • The initial forbearance period may be up to 6 months. If needed, an
      additional forbearance period of up to 6 months may be requested by
      the Borrower and must be approved by the Mortgagee.
      The term of either the initial or the extended forbearance may be
      shortened at the Borrower’s request
      .
      (B) COVID-19 National Emergency Standalone Partial Claim
      The Mortgagee must waive all Late Charges, fees, and penalties, if
      any, as long as the Borrower is on a Forbearance Plan.

For any homeowners with an FHA loan that are struggling to make their house payments, they should contact their loan servicer to see if they are eligible for relief under this plan.

 

 

 

Payments On Typical St Charles County Home Over 13 Percent Cheaper Today Than Year Ago

The typical median-priced existing home sold for $233,000 in February 2019 and a year later, as the chart below shows, in February 2020 the typical median-priced home sold for $235,000, an increase of just under 1%.  Here’s the beauty though, thanks to interest rates dropping from an average of 4.41% a year ago to 3.29% today, even with the slight increase in price, the typical St Charles County home costs less today than a year ago!  Not just by a little either as the payment on the median price a year ago (no money down) would have been $1,178.18 at the current rates at the time, the payment today, at the higher price but lower rates would be just $1,019.15, a savings of $159.03/month or 13.5%!  Oh, and just to show the “compound effect” of this, over the life of the loan, you will save $55,249 in interest.

So, what are you waiting for?  Buy a house!

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St Charles County Existing Home Sales – Past 13 Months

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St Charles County Existing Home Sales - Past 13 Months

Mortgage Interest Rates Hit All-Time Low!

Mortgage interest rates hit a record low this week with an average interest rate of 3.29% on a 30-year fixed-rate mortgage according to the Freddie Mac Primary Mortgage Market Survey.  As the chart below shows, interest rates came close to this level at the end of 2012 but then quickly shot up to over 4.5% shortly after.

Now is the time to buy or at least refinance!

Anyone that has been thinking of buying a home should, if able, shift into high geat and find one now to take advantage of the low rates and the increased buying power that comes with it.  The first step would be to get yourself pre-approved and, for that, I would recommend Michael McCarthy with Flat Branch Home Loans…he’s great and our firm does a lot of business with him.  You can find his info at STLBestLender.com.  If you a homeowner with a mortgage and no plans to move, I would also suggest you get in touch with Mike to see how much money you can save by refinancing your existing mortgage at a lower rate.

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Mortgage Interest Rates – 30 Year Fixed-Rate

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Mortgage Interest Rates - 30 Year Fixed-Rate

 

Mortgage Interest Rates….How low can they go??

For quite a while now we have enjoyed the positive effects on the real estate market from low mortgage rates but it looks like it’s going to get even better!  Yesterday’s announcement by the Fed of the emergency step of lowering the benchmark U.S. interest rate by one-half of one percent, in an effort to offset the negative effect tot eh financial markets from the coronavirus will likely lead to even lower mortgage interest rates.

What’s the connection between the federal funds rate and mortgage interest rates? This is something often asked not only by homebuyers but is even within the real estate community as since the Federal Reserve doesn’t “set” mortgage rates, the connection is not always clear.  I’m not an expert in this area by no means, but I have a decent understanding of it and will share it from the perspective of the most popular home mortgage, the 30-year fixed-rate mortgage.  First, we have to understand where the money for those mortgages comes from.  It comes from investors, investors that compare an investment in 30-year mortgages to other comparable investments.  One of those comparable investments would be the 30-year treasury.

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Continue reading “Mortgage Interest Rates….How low can they go??

Why I’m Bullish On Real Estate For 2020

As you may have noticed, I’ve been pretty optimistic about the outlook for the real estate market this year however, that is not always the case as I call it like I see it.  The reason for my optimism is based upon what a true data geek like myself would base it upon, data!  So, what’s the data that has me believing 2020 will be a good year for the housing market in St Louis and beyond?  Several things:

  • As I have been reporting here for the past couple of years now, mortgage delinquency and foreclosure rates have continued to decline which show the strength of the economy as a whole as well as the housing industry.
  • As the US Economic Indicators charts below show, since peaking around 2010, the unemployment rate, 30-year mortgage rate and mortgage delinquency rates have all steadily declines to either record lows or at least the lowest rate in recent history.
  • As the St Louis unemployment, home prices and rent chart below shows, unemployment in St Louis has fallen to the lowest level in decades and the relationship between home prices and rents show home prices lagging behind rents indicating that we’ll likely see continued, good housing appreciation rates.
  • As the 30-year fixed rate mortgage chart below shows, mortgage rates are at near record low rates giving buyers much more buying power.  In my market update video I shared here a day or two ago I illustrate just how much more buying power this translates into.
  • As I reported last week, St Louis home sales last year managed to top the prior year slightly, in spite of the low-inventory market we have been stuck in.  This shows the demand that is out there.
  • As I reported earlier this week, the home sales trend for 2020 in St Louis is in positive territory has well.

Continue reading “Why I’m Bullish On Real Estate For 2020

FHA Loan Limits For St Louis MSA Increase to $331,760 January 1st

The maximum loan amount for an FHA-Insured home loan on January 1, 2020, will increase from $314.827 to $331,760 for a single-family home purchased in the St Louis metro area.  FHA insured home loans have lower credit standards than a typical conventional loan, require a downpayment of just 3.5% and allow all of the purchasers closing costs to be paid by the seller (up to a limit) thereby extending the opportunity of homeownership to a wider audience.

Below are all of the FHA Mortgage Limits for the St Louis MSA for 2020:

  • One-Family dwellings – $331,760
  • Two-Family dwellings – $424,800
  • Three-Family dwellings – $513,450
  • Four-Family dwellings – $638,100

To find out more about FHA home loans, or to get pre-approved for an FHA home loan click on the button below to connect with Mike McCarthy.

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No Cap On No Money Down VA Loan After January 1st

Buying a home for veterans will get a little easier come January 1, 2020, especially those veterans moving up to a more expensive home, as a result of the Blue Water Navy Veterans Act of 2019 signed into law by President Trump in June 2019.  The primary focus of the Act was to provide disability benefits to veterans who served in Vietnam, it also made significant changes to the VA Home Loan benefit available to all veterans.  The VA home loan changes go into effect on January 1, 2020.  Below are highlights of the changes to the VA home loan benefit:

  • Conforming Loan Limits – There will no longer be a limit, or cap, on the amount for a no-downpayment home loan to a veteran.
  • VA funding fee increase – The VA charges a funding fee to support the VA home loan program.  The fee is currently 0.15% for Veterans and Servicemembers and on January 1st will increase to 0.30%.
  • Purple Heart – The VA funding fee will be waived for active Servicemembers who have earned a Purple Heart.
  • Native America Direct Loan – As of January 1st, the existing cap of $80,000 will be removed for Veterans using their entitlement for a VA Native American Direct loan to purchase (or build) a home on Federal trust land.

To find out more about the changes to the VA home loan program, click on the button below to connect with Mike McCarthy,

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Mortgage Delinquency Rate Hits Lowest Level 20 Years

The good news just keeps coming for the residential real estate industry!  The most recent is from a report just released by CoreLogic showing the mortgage delinquency rate in the U.S. was at 3.8%, the lowest rate in at least 20 years!  In addition, not one state in the country had an increase in overall delinquency rates in September.

Foreclosure Inventory Reaches Low as well…

The foreclosure inventory rate for September was 0.4%, another 20+ year low!

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Mortgage Delinquency Rates Hit 14-Year Low In August

In August, the overall mortgage delinquency rate (30 or more days past due) was 3.7% for the U.S. which is a 0.2 percentage point decline from a year ago and is the lowest overall delinquency rate in 14-years, according to date just released by CoreLogic.  The delinquency rate for August of 3.7% marks the lowest delinquency rate during the month of  August in 20 years.  The serious delinquency rate (120+ days late) decline of 1.2% a year ago to just 1.0% in August 2019, nearly a record low.  The Foreclosure Rate fell in August 2019 to 0.4% from 0.5% a year ago.

Missouri mortgage delinquency rates are low as well…

During August 2019, the overall mortgage delinquency rate for Missouri was exactly the same as the national rate, 3.7%.  The serious delinquency rate in Missouri was 1.1%, just slightly above the national rate, and the foreclosure rate was 0.2%, half of the national rate.

See the current mortgage interest rates here.

 

St Louis Real Estate Market Update VIDEO – November 2019 – Low-Interest Rates And Consistent Sales Trends

The St Louis real estate market trends remain steady and consistent! The St Louis home sales and price trends give me an optimistic outlook for next year.  Low-interest rates continue to offset some of the cost of the increases in home prices that have occurred. Find out more, as well as get information on some of St Louis’s best resources for home buyers and sellers in our just-released market update video.

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Falling Interest Rates Make St Louis Homes Even More Affordable

Mortgage interest rates have been falling since last Thursday when the referendum passed for the United Kingdom to exit the European Union.  As the chart below shows, interest rates on a 30 year fixed-rate mortgage today averaged 3.44%, a new 52-week low and a decline of nearly 3/4 of 1 percent from a year ago when they were 4.20%.  The payment on a $160,000 home loan at today’s rates would be $713 (principal and interest), a decline of nearly 9 percent from a year ago when the payment on the same loan amount would have been $782.
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Mortgage Delinquency Rate Falls To Lowest Level In 5 Years

The mortgage delinquency rate for homeowners 60 days or more delinquent on their mortgages fell below 4 percent during the last quarter of 2013, the first time the delinquency rate has been below 4% since 2008, according to TransUnion.  According to the report, every state in the U.S. saw a decline in mortgage delinquency rates from to the 4th quarter of 2012 to the 4th quarter of 2013 with only two, New Jersey and New York, not seeing a double digit decline. See the info graphic below for more info. Continue reading “Mortgage Delinquency Rate Falls To Lowest Level In 5 Years

Mortgage Interest Rates Hit Record Low

St Louis Interest RatesMortgage interest rates keep falling and this week the interest rate on a 15 year fixed-rate mortgage hit a new record low of 2.8 percent, according to a weekly national survey conducted by Bankrate.com.  Interest rates on a 30-year fixed rate mortgage averaged 3.57 percent this week, a four month low.

As the Bankrate report below for St. Louis shows, St. Louis interest rates are even better: Continue reading “Mortgage Interest Rates Hit Record Low

How to avoid being the victim of a loan modification scam

dennis-norman-st-louis-real-estateAccording to a recent report by the Loan Modification Scam Prevention Network (LMSPN), a national anti-scam effort comprised of Fannie Mae, Freddie Mac, the Lawyers’ Committee for Civil Rights Under Law, the Homeownership Preservation Foundation (HPF), and NeighborWorks America, there have been more than 30,000 loan modification scams reported in the past three years. According to the group, the scammers are becoming “increasingly aggressive online, using targeted web advertisements to reach homeowners who are searching for mortgage relief over the Internet.” The group cautions that homeowners should be aware that no one other than your present lender can guarantee any form of mortgage relief.

Below are six (6) warning signs to look for that may indicate you are dealing with a loan modification scammer: Continue reading “How to avoid being the victim of a loan modification scam

Interest Rate Change; St. Louis Mortgage Interest Rate Update

FHA Interest Rate  Change:  MHDC’s Cash Assistance  Loan  (CAL)  is now 4%! (APR 4.93)

MHDC is raising mortgage interest rates offered to  first-time homebuyers.  First-time  home buyers receive a forgivable 3% cash assistance loan for down payment and  closing costs.
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The Number of Homeowners With Negative Equity Continues to Decline

dennis-norman-realtorRising home prices helped 100,000 homeowners in the U.S. crawl out of a negative equity position during the 3rd quarter of 2012, according to a report just released by CoreLogic®.  During the first nine months of 2012, there were a total of 1.4 million homeowners that found themselves moving from a negative equity position on their homes to a positive equity position.  In spite of this vast improvement, twenty two percent of homeowners in the U.S. with a mortgage owe more on their homes than they are currently worth. Continue reading “The Number of Homeowners With Negative Equity Continues to Decline

FHA Loans May Become A Lot More Costly Soon

So…you are looking to buy a home in 2013 and are considering using a FHA mortgage for financing…don’t delay, because that FHA mortgage could end up costing more very soon.

HR 4264 or The Fiscal Solvency Act of 2012 is a bill that has overwhelmingly passed the House and is on its way to the Senate.  This bill among other things grants FHA the power to raise its mortgage insurance premiums to as high as 2.05% annually — nearly twice the 1.20% rate most FHA-Insured homeowners pay today.

Continue reading “FHA Loans May Become A Lot More Costly Soon