Mortgage Rates Ease to lowest level in over three weeks

Interest rates for a 30-year fixed-rate conventional mortgage declined to 7.28% today, down from their five-month high of 7.52%, reached just over a week ago. Today’s rate marks the lowest since April 9, when the interest rate on a 30-year fixed-rate mortgage stood at 7.06%.

Although the accompanying chart traces the trajectory of interest rates over the past 40 years, extending back to 1980, it does not predict their future movements. The direction of mortgage rates is influenced by a myriad of factors including, but not limited to, Federal Reserve policies, inflation expectations, and global economic conditions. Currently, experts are closely monitoring the Fed’s monetary policy adjustments in response to inflation rates. Historical data suggests that significant shifts in policy can lead to rapid changes in mortgage rates. Therefore, potential homebuyers and investors should stay informed through reliable financial news sources and consult with seasoned real estate professionals, such as those at my company, MORE, REALTORS®, to navigate the complexities of the mortgage market effectively.

Mortgage Interest Rates – 1980 – Present

(click on chart for entire live, interactive chart)Mortgage Interest Rates - 1980 - Present

Mortgage Interest Rates Slightly Ease Today, Falling from a Five-Month High

Interest rates for a 30-year fixed rate conventional mortgage hit 7.52% yesterday, the highest rate in five months, since November 13, 2023 when they were 7.58%.  Today, however, they eased and the 30 year fixed rate mortgage interest rate dropped slightly to 7.45% and the interest rate for a 30-year FHA loan slipped below 7% to 6.95%.

The chart below shows interest rates  for over 40 years, back to 1980 and shows about as much change as we’ve seen in fashion and technology during the period — from an astronomical high of 18.29% in October 1981 to an unbelievable low of 2.80% in November 2020.  Don’t you wish you had a Time Machine and could travel back 4 years and snag a loan?

Mortgage Interest Rates – 1980 – Present

(click on chart for entire live, interactive chart)

Mortgage Interest Rates - 1980 - Present

March 2024 Mortgage Update: Serious Delinquencies Drop to Lowest Since Mid-2006

According to the latest report from Intercontinental Exchange, the U.S. mortgage market showed promising signs of stability in March 2024. The national delinquency rate decreased to 3.20%, marking a modest drop from February but remaining slightly higher than the record low observed in March 2023. Notably, serious delinquencies, which track loans 90+ days past due but not in active foreclosure, decreased significantly. These serious delinquencies fell by 24,000 cases—a 5.2% reduction from February, reaching their lowest level since mid-2006. This improvement is particularly significant as it occurred during a month that historically sees fluctuations due to its conclusion on a Sunday, a pattern observed only thrice in the last two decades.

In addition to a decrease in serious delinquencies, March saw a downturn in the number of loans in active foreclosure, dropping to 205,000—the fewest since January 2022 and 28% below pre-pandemic levels. Moreover, prepayment activity, often a sign of a healthy housing market, reached its highest point in seven months, encouraged by lower interest rates and the onset of the spring homebuying season. The attached chart below this article provides a visual depiction of these positive trends in delinquency and foreclosure data.

March 2024 – Mortgage Performance

March 2024 - Mortgage Performance 

Beware of Unjust Fees: Insights from the Latest CFPB Mortgage Report

The Consumer Financial Protection Bureau’s (CFPB) Spring 2024 report on mortgage servicing reveals critical issues that prospective and current homeowners should be aware of. The report highlights a troubling trend of unauthorized charges and deceptive practices in mortgage servicing, which could impact a homeowner’s financial stability and property rights. For instance, some services were found to be charging illegal property inspection fees, particularly on Fannie Mae loans, despite guidelines clearly prohibiting such fees when certain conditions are met. These unjust fees, ranging from $10 to $50, were imposed even when borrowers were actively engaging with their servicers, highlighting a significant breach of trust and a potential drain on homeowner resources .

Moreover, the report exposes servicers for levying unauthorized late fees, violating both consumer trust and regulatory requirements. These overcharges, which occurred due to flawed administrative processes or oversight, are especially egregious as they can unfairly increase the financial burden on homeowners. The CFPB’s commitment to scrutinizing such practices is a reminder of the need for vigilance among consumers. The report’s findings underscore the importance of homeowners staying informed and proactive in managing their mortgage accounts to avoid falling victim to these predatory practices. For a deeper understanding and additional details, consider reviewing the complete report below .

CFPB Supervisory Highlights – Mortgage Servicing Edition – Spring 2024

(click below to access complete report)

CFPB Supervisory Highlights - Mortgage Servicing Edition - Spring 2024

Refinance Activity Surges Despite Rising Mortgage Rates – Purchase Applications Fall

Last week, the interest rates for 30-year fixed-rate mortgages climbed past the 7 percent mark. Despite this increase, as the chart below illustrates, there was a significant 10 percent increase in refinancing applications. This is in sharp contrast to a 5 percent decline in purchase applications. The growth in the refinancing segment is notable, representing 33.3 percent of the total application volume, up from 30.3 percent the previous week. This surge in refinancing interest is particularly intriguing, given the highest reported 30-year mortgage rates in over a month, at 7.01 percent.

Joel Kan, MBA’s Vice President and Deputy Chief Economist, attributed the rising rates to the Federal Reserve’s cautious stance on adjusting policy amidst persistent inflation and resilient economic indicators, including strong employment data. Despite the unfavorable rate environment, the demand for refinancing, especially VA refinancing, remained robust.

Other notable trends include a decrease in average loan sizes, with purchase loan sizes—often viewed as a proxy for home prices—dropping to $449,400 from $453,000. Additionally, there was a shift in the composition of mortgage applications, with increases in FHA and VA loan shares.

So, what explains the rising number of homeowners refinancing their mortgages even with rising mortgage interest rates? There are numerous reports indicating that many homeowners across the country are becoming cash-strapped and having a difficult time paying bills, thus resorting to pulling out equity from their homes, even if it means accepting a higher interest rate. I’ve also observed reports indicating that consumer credit card debt is at historically high levels, with interest rates on this debt being astronomical. This situation is prompting people to refinance their home loans again, even at higher rates, because even though their mortgage may be at a higher rate, it still appears to be a bargain compared to the 27 or 28% on a credit card. I haven’t seen enough verifiable data to confirm if either of these situations is true, but both are plausible.

Refinance Index vs 30 Yr Fixed Mortgage Chart

(click on image for live, interactive chart)

Refinance Index vs 30 Yr Fixed Mortgage ChartHous

Interest Rate Insights: Traci Everman Unveils the Latest Shifts

The ebb and flow of St. Louis’s real estate market are linked to the broader economic currents, and recent weeks have witnessed a significant uptick in mortgage interest rates.  In the video below, Traci Everman, Senior Mortgage Banker with Flat Branch Home Loans, does a fantastic job of explaining what is happening and why.  Below the video are some highlights and a recap.

Here are are few highlights of what Traci’s covers in the video:

Recent Economic Impacts on Mortgage Rates:

  • Economic reports released over the past day have precipitated a downturn in the bond market and a subsequent rise in interest rates. This movement stems from inflationary pressures, which erode the value of long-term investments like mortgage-backed securities.

Analyzing PCE Inflation and Jobs Reports:

  • Key economic indicators such as the PCE report, which reflects inflation sans food and energy costs, revealed a 0.3% increase, signaling a direction contrary to the market’s desires. Furthermore, the employment data, despite being a bearer of good tidings on job creations, did not spell out positive news for the bond market.

Current State of Mortgage-Backed Securities:

  • Currently, the mortgage-backed securities market is taking a hit, down 88 basis points, leading to a predicted quarter percent increase in interest rates between yesterday and today. This fluctuation reminds us of the volatility that peaked in October 2023.

How Recent Trends May Affect Future Rates:

  • The Federal Reserve’s stance and upcoming meetings are pivotal. While rate cuts were anticipated, the outcome was status quo, leaving predictions for future rate cuts in 2024 uncertain. Inflation, driven by rising oil prices and other factors such as soaring auto insurance premiums, continues to play a crucial role.

Conclusion: Staying Informed on Market Changes:
As Traci Everman sums up the market update, it’s clear that keeping a close eye on inflation and Fed decisions is crucial for anyone involved in real estate. With potential rate cuts on the horizon, the coming quarters could be crucial for buyers and sellers in St. Louis.

For a more detailed dive into what this means for your home buying or selling decisions, stay connected with St. Louis Real Estate News.  Stay informed.

NAR and MBA Seek Assurance from Fannie Mae and HUD on Commission Practices to Protect Homebuyers

One of the issues receiving significant attention following the announcement of the REALTOR® commission suit settlement is the topic of buyer commissions, specifically regarding whether a buyer has to pay them and how lenders will treat the commissions.

In a recent letter to the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac, NAR and MBA sought confirmation on the treatment of buyer agent commissions following a proposed settlement agreement in the Burnett et al and Moehrl et al cases.

What does this mean for homebuyers? Under the settlement, cooperative commissions will no longer be displayed on Multiple Listing Services (MLS), but listing brokers and sellers will still be able to offer compensation for buyer broker services through other means. Additionally, the settlement does not prohibit home sellers from paying buyer agent commissions directly.

NAR and MBA believe that FHA and Government-Sponsored Enterprise (GSE) policies should continue to exclude seller or listing agent payments of buyer agents’ commissions from Interested Party Contributions (IPCs). IPCs are concessions from the seller to the buyer for items traditionally paid by the buyer, such as loan closing costs or rate buy-downs. Maintaining this practice is essential to ensure that the flow of mortgage capital to homebuyers remains uninterrupted.

As a homeowner or potential buyer, it’s important to stay informed about these developments and how they may impact your buying or selling process. NAR and MBA have requested confirmation from the FHFA, FHA, Fannie Mae, and Freddie Mac as soon as possible to prevent any confusion and potential disruptions that may cost you money or even jeopardize your home purchase.


The MBA and NAR Letter

(click to view entire letter)

The MBA and NAR Letter 

The Impact of Credit Scores on St. Louis Real Estate Decisions

Whether you’re looking to buy or rent a home, your credit score is more than just a number—it’s a gateway to your future residence. A recent survey by LendingTree has shed light on the significant role credit scores play in Americans’ access to financial products, including those crucial for securing a home. Here’s a recap of the findings and their implications for the St. Louis real estate market.

Key Findings:

  • High Denial Rates: 42% of Americans reported their credit scores prevented them from obtaining a financial product in the past year, with this figure soaring to 74% among those with poor credit. For St. Louis residents, this could mean increased challenges in securing mortgages or rental agreements.
  • Credit Cards and Personal Loans: The top products consumers were denied due to their credit scores were credit cards (25%) and personal loans (12%). While not directly related to real estate, these denials can impact one’s ability to consolidate debt or cover moving expenses, indirectly affecting home buying or renting capabilities.
  • Perception of Financial Responsibility: 40% of Americans believe their credit scores do not accurately reflect their financial responsibility. This sentiment is even higher among those with poor credit (60%), millennials (47%), and women (44%). For potential homebuyers or renters in St. Louis, this discrepancy could lead to frustration and barriers in the housing market.
  • Payment History’s Importance: Despite being the most crucial factor in credit score calculations, 50% of Americans are unaware that payment history holds the most weight. This lack of knowledge can lead to missed opportunities for improving credit scores and, by extension, securing better terms for mortgages or leases.
  • Improving Credit Scores: The survey revealed that paying off debt was the primary method for improving credit scores over the past year. For St. Louis residents, understanding and applying this knowledge can be a strategic move towards enhancing eligibility for home buying or renting.

Implications for St. Louis Real Estate:
The survey’s insights highlight a critical barrier to homeownership and renting: the impact of credit scores on financial product accessibility. For St. Louis real estate professionals and potential homebuyers or renters, this underscores the importance of credit education and management as foundational steps towards achieving housing goals.

  • Educational Opportunities: Real estate professionals, such as the Masters of Real Estate at MORE, REALTORS®, can provide valuable guidance to clients on improving credit scores, emphasizing the role of payment history and debt management.
  • Strategic Planning: Understanding the weight of credit scores in financial decisions can help potential buyers or renters in St. Louis develop strategies to improve their scores before applying for mortgages or leases.
  • Market Accessibility: For those with poor credit, exploring alternative financing options or seeking professional credit counseling could open doors to the real estate market that might otherwise remain closed.

In St. Louis, as in the rest of the country, a strong credit score is more than just a number—it’s a key that unlocks the door to future housing opportunities. The recent LendingTree survey provides a basis for understanding the challenges and strategies related to credit scores in the real estate market. By focusing on credit education and management, St. Louis residents can navigate these challenges more effectively, making the dream of buying or renting a home more attainable.


Consumer Confidence in Mortgage Rates Soars, Marking a Positive Shift in Housing Sentiment for 2024

The latest release from Fannie Mae on the Home Purchase Sentiment Index® (HPSI) is particularly illuminating, showing a notable uptick in consumer optimism towards mortgage rates. For the first time since March 2022, the HPSI has climbed to 70.7, a 3.5-point increase driven largely by heightened confidence in job security and an unprecedented share of consumers expecting mortgage rates to dip in the coming year. This optimism isn’t just numbers on a page; it’s a palpable shift in the air, with 82% of respondents now feeling secure in their employment prospects, and an all-time survey high of 36% predicting lower mortgage rates ahead. Yet, despite this optimism, the stark reality remains that only 17% believe it’s a good time to buy a home, underscoring a persistent pessimism around purchasing conditions.


Fannie Mae Home Purchase Sentiment Index Chart

(click on chart for current, live-interactive chart)

Fannie Mae Home Purchase Sentiment Index Chart

NAR President Traci Casper Addresses Housing Market Challenges and Commission Lawsuits in CNBC Interview

Traci Casper, NAR President

In a recent interview with CNBC, Traci Casper, the President of the National Association of Realtors (NAR), shared her views on the current state of the housing market and the implications of recent commission lawsuits. Her remarks provide an insight into the challenges and changes shaping the real estate industry, particularly relevant for the St. Louis market.

Casper highlighted the impact of fluctuating mortgage rates on the housing market, mentioning, “We do have still such a pent-up buyer pool that’s just been waiting on the sidelines… we are starting to feel them come back in.” This observation reflects the interconnectedness of mortgage rates and buyer activity, a significant factor in real estate market dynamics.

Regarding the commission lawsuits, Casper spoke about the potential effects on buyers and sellers. She explained, “Our buyers are already struggling to come up with a down payment… We don’t want to see is the marginalization of those buyers.” This statement is in line with the NAR’s consistent message suggesting that lower-income buyers might be negatively impacted if sellers stop paying buyer agent commissions. I counter Casper’s position, highlighting the disagreement within the industry. Many argue that buyers are indirectly paying the commission since it is generally factored into the home’s selling price. If the payment structure shifts to where buyers directly pay the commission, this could lead to a decrease in the seller’s price, as they would no longer bear this cost. This change might not increase the overall cost to the buyer, but it could affect sellers’ pricing strategies. Additionally, I believe that lenders will adapt to these changes. Institutions like Fannie Mae, Freddie Mac, FHA, and VA are likely to revise their policies to allow commissions paid by buyers to be included in closing costs, counted as part of the down payment, or financed.

Recent Drop in Mortgage Rates: A Turning Point for the St. Louis Real Estate Market?

As we observed yesterday, there’s been a significant shift in the mortgage landscape. The interest rate for a 30-year fixed-rate conventional mortgage fell to 6.62%, the lowest since May 12, 2023, when it stood at 6.55%. This decrease might signal a turning point in the housing market, especially considering the erratic rate movements we’ve seen over the past several months.

More encouraging news comes from the FHA sector, where the 30-year fixed-rate dropped to 6.13%, marking its lowest since May 11, 2023, when it was 6.12%. These recent figures hint at a trend that could reignite buyer interest and energize market activity, a positive shift from the higher rates experienced recently.

This change in mortgage rates is particularly significant!  For prospective buyers, this dip in rates opens a more favorable door, potentially making homeownership more attainable than in the recent past. Sellers have reasons to be optimistic too, as lower rates could lead to increased market interest and activity.

Below is a chart illustrating the history of mortgage interest rates. This visual representation provides a clearer perspective on the recent changes and what they mean for our market.

Mortgage Interest Rates (interactive chart)

(click on chart for live, interactive chart)

Mortgage Interest Rates (interactive chart)



Analyzing Jerome Powell’s Latest Press Conference: Implications for Mortgage Rates and the St. Louis Real Estate Market

Federal Reserve Chair Jerome Powell’s press conference yesterday, along with the Federal Open Market Committee (FOMC) statement, provide crucial insights into the Fed’s economic outlook and monetary policy. These insights are pivotal for understanding the trajectory of mortgage rates and the St. Louis real estate market.

Powell’s Press Conference Highlights

  • Economic Activity and Rate Adjustments: Powell noted, “We have raised our policy interest rate by 5-1/4 percentage points… Our actions have moved our policy rate well into restrictive territory.”
  • Housing Sector Observations: He remarked, “After picking up somewhat over the summer, activity in the housing sector has flattened out… largely reflecting higher mortgage rates.”

Key Takeaways from the FOMC Statement

  • Economic and Inflation Outlook: The FOMC stated, “Recent indicators suggest that growth of economic activity has slowed… Inflation has eased over the past year but remains elevated.”
  • Banking System Resilience: The statement highlighted, “The U.S. banking system is sound and resilient. Tighter financial and credit conditions… are likely to weigh on economic activity.”

Anticipated Interest Rate Movements

  • Future Rate Decisions: The FOMC announced, “The Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”
  • Monetary Policy Considerations: “In determining the extent of any additional policy firming… the Committee will take into account the cumulative tightening of monetary policy,” indicating a measured approach to future rate changes.

Implications for Mortgage Rates and St. Louis Real Estate

  • Mortgage Rate Trends: Combining Powell’s remarks with the FOMC statement suggests a period of careful assessment in rate adjustments. This could lead to stabilization or moderate fluctuation in mortgage rates.
  • Market Dynamics in St. Louis: Stable or gradually adjusting mortgage rates, alongside ongoing economic and inflation monitoring, could result in a balanced real estate market. Buyers and sellers in St. Louis may experience a period of relative predictability and sustained market activity.

The integrated perspectives from Jerome Powell’s press conference and the FOMC statement offer a detailed view of the Federal Reserve’s stance on economic conditions and monetary policy. For the St. Louis real estate market, these developments suggest a period of cautious optimism, with potential stability in mortgage rates and a balanced market environment. Real estate stakeholders should consider these insights in their market strategies and decision-making processes.

Mortgage Interest Rates Show Promising Decrease, Offering Hope in the Housing Market

As of yesterday, the mortgage landscape has seen a notable shift, with the interest rate for a 30-year fixed-rate conventional mortgage dropping to 7.13%, marking the lowest point since September 1, 2023, when it was 7.08%. This recent decrease offers a glimmer of hope in the housing market, especially considering the turbulent fluctuations witnessed over the past months.

Equally promising is the rate for 30-year fixed-rate FHA loans, which as of yesterday stood at 6.5%, again the lowest since September 1, 2023, when it recorded a rate of 6.45%. These latest figures suggest a trend that could lead to revitalizing buyer interest and market activity, a welcome change from the higher rates experienced in the recent past.

This positive turn in mortgage rates is particularly significant for markets like St. Louis, where the real estate dynamics are closely tied to these financial trends. For buyers, the dip in rates presents a more favorable scenario, potentially making home ownership more accessible than it has been in recent times. Sellers, too, might find reasons to be optimistic, as lower rates could translate to increased market interest and activity.

The chart below illustrates the history of mortgage interest rates, offering a clearer perspective on the recent changes and their implications.

Mortgage Interest Rates (interactive chart)

(click on chart for live, interactive chart)

Mortgage Interest Rates

The real estate market has always been sensitive to interest rate changes, and the current shift could be the beginning of a more encouraging phase. Whether this trend will continue remains to be seen, but for now, it offers a much-needed respite and a reason for cautious optimism in the housing market.



Interest Rates Hit Two-Month Low, Easing from 23-Year High

The 30-year fixed mortgage interest rate has experienced a significant drop, reaching 7.4% – the lowest since September 20th, nearly two months ago. This shift provides a much-needed reprieve in the housing market, particularly following the rate’s surge to 8.03% on October 19th, a peak unseen since August 7, 2000, 23 years ago.

The October high had introduced uncertainty and slowed down the real estate market, impacting buyer affordability and seller activity. The recent decline to 7.4%, though still high historically, is a positive sign, potentially reinvigorating interest and activity in the housing market.

This change in rates is key for real estate professionals and buyers in areas like St. Louis. It presents an opportunity for buyers to reconsider their purchasing plans and for sellers to anticipate increased market interest. The future trajectory of interest rates remains a point of keen observation for the real estate market.

Mortgage Interest Rates

(click on chart for live, interactive chart)

Mortgage Interest Rates



St. Louis Ranks 9th Lowest for Average Down Payments among Top 50 U.S. Metros

In the world of real estate, down payments have emerged as a significant financial factor for homebuyers across the United States, and St. Louis is no exception. A recent report from LendingTree sheds light on the dynamics of down payments, and it’s essential for prospective buyers and sellers in St. Louis to understand how the local market fares in this regard.

St. Louis Down Payment Statistics:

  • St. Louis ranks 42nd out of the nation’s 50 largest metropolitan areas in terms of average down payments. This ranking places it 9th in terms of the lowest down payment amount in the 50 largest metros.
  • The average down payment in St. Louis comes in at $56,251. While this figure may not reach the heights seen in some of the more expensive coastal cities, it’s still a substantial amount.

Down Payment as a Percentage of Income:

  • One critical metric to assess affordability is the down payment as a percentage of the average annual household income. In St. Louis, the average down payment represents approximately 54.87% of the area’s average annual household income.

Challenges and Opportunities:

  • For many homebuyers in St. Louis, coming up with a down payment that accounts for over half of their annual household income can present challenges. It may require careful financial planning and discipline to accumulate the necessary funds.
  • On the positive side, St. Louis fares better than several major metros where down payments exceed 100% of the average household income.

Tips for St. Louis Homebuyers:

  • Prospective buyers in St. Louis should explore various options for coming up with a down payment, such as saving over time or investigating loan programs that require lower upfront cash.
  • Additionally, buyers should stay informed about down payment assistance programs available in the St. Louis area that can help make homeownership more accessible.


In summary, while St. Louis may not have the highest average down payments in the nation, it’s essential for local homebuyers to be aware of the financial aspects of purchasing a home. Understanding how down payments align with income and local market conditions is key to making informed decisions in the St. Louis real estate market. Stay tuned to for more insights into the St. Louis real estate landscape.

Mortgage Rates Take a Slight Dip Amidst Steady Federal Reserve Rates

In the ever-evolving landscape of the housing market, prospective homeowners and investors alike keep a close eye on mortgage interest rates. Today, there was a modest decrease in the 30-year fixed-rate mortgage interest rate, now hovering between 7.5% and 7.6%. This shift comes in the wake of the Federal Reserve’s recent decision to maintain the Overnight Federal Funds Rate at a range of 5.25% to 5.50%.

This current rate represents a slight relief from the recent peak in , yet it remains a figure that echoes the rates of over two decades ago. To put this into perspective, the last time mortgage interest rates soared to such heights was in late 2000, a reality that today’s borrowers may find daunting.

The first chart below illustrates the trajectory of mortgage rates over the last several years while the chart below it is a long-term look at rates going all the back t0 1971.

Despite the Federal Reserve’s pause in rate hikes, as noted in their latest meeting, the market has responded with a cautious optimism that is reflected in today’s slight rate reduction. Federal Reserve Chairman Jerome Powell has been clear that this holding pattern does not signal an end to the tightening cycle, but rather a strategic pause, with the central bank retaining the option to adjust rates if inflation trends shift.

For homebuyers, this dip presents a nuanced opportunity. While rates are not at the historic lows seen in recent years, any decrease can translate to significant savings over the life of a mortgage. It’s a reminder that in the world of real estate financing, timing, and vigilance are everything.

As we continue to navigate through these turbulent economic waters, stay tuned for updates on interest rate trends and their implications for the real estate market. Whether you’re looking to buy, sell, or simply stay informed, understanding the dynamics of mortgage rates is key to making empowered decisions.

Mortgage Interest Rates (MND Chart)

(click on chart for live, interactive chart)
Mortgage Interest Rates (MND Chart)

Mortgage Interest Rates – 1971-Present – 30 Year Fixed-Rate

(click on chart for live, interactive chart)Mortgage Interest Rates - 1971-Present - 30 Year Fixed-Rate


Housing Market Sentiment Shifts: Buyer Optimism Hits All-Time Low as Seller Confidence Slightly Retreats from Record High

Every month, Fannie Mae surveys consumers to gauge their sentiment on whether it’s a good time to buy or sell a home. The results are published in their Home Purchase Sentiment Index® (HPSI). In the most recent HPSI report, 84% of respondents said they felt now was a bad time to buy a home. This is the highest percentage holding this view since the survey’s inception in 2012.

On the flip side, 63% of those surveyed believed now was a good time to sell a home. This is a slight dip from last month’s 66%.

As for interest rates, a mere 17% of consumers expect mortgage rates to decrease in the next 12 months

Fannie Mae Home Purchase Sentiment Index Chart

(click on chart for live, interactive chart)
Fannie Mae Home Purchase Sentiment Index Chart


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30-Year Fixed Rate Mortgage Interest Rate Hits Highest Level Today In Over 20 Years

Interest rates for a 30 year fixed-rate mortgage hit 7.49% today as reported by Mortgage News Daily, marking the highest rate we’ve seen on this type of mortgage in over 20 years.  The MND chart below only goes back to 2009 but the bottom chart, from the St Louis Fed Reserve goes all the way back to 1971.  As the charts show, the last time mortgage interest rates were at these levels was over 20 years ago in late 2000.

Mortgage Interest Rates (MND Chart)

(click on chart for live, interactive chart)
Mortgage Interest Rates (MND Chart)

Mortgage Interest Rates – 1971-Present – 30 Year Fixed-Rate

(click on chart for live, interactive chart)Mortgage Interest Rates - 1971-Present - 30 Year Fixed-Rate


St Louis Mortgage Interest Rates Hit Highest Level in over 21 years

As the chart below illustrates, mortgage interest rates on a 30-year fixed rate mortgage hit 7.125% yesterday, the highest rate since April 5, 2002 when the rates were at 7.13%.

If you go back far enough in history, you’ll feel better about todays’ rates…

There is probably very little comfort in this for current home buyers but while we are experiencing the highest mortgage rates in over two decades, if we go back a couple of more decades or so in history we’ll see the current rates aren’t so bad.  As the bottom chart below illustrates, over the 52-year period depicted on the chart, about 55% of the time mortgage interest rates were higher than they are now.  If you’re in your 20’s or 30’s you likely don’t care and still think the rates suck since they are about double what they have been since you have paid attention to them.  If you’re a baby-boomer like me, it’s a walk down memory lane LOL.

Mortgage Interest Rates Based Upon the MND Rate Index

(click on chart for live, interactive chart)

Mortgage Interest Rates Based Upon the MND Rate Index

30-Year Fixed Rate Mortgage Interest Rates 1971-Present

(click on chart for live, interactive chart)

30-Year Fixed Rate Mortgage Interest Rates 1971-Present


St Louis Mortgage Interest Rates Stuck In the 7 Percent Range

As the chart below illustrates, since returning to 7% around the third week in May, the interest rate has pretty well stayed at the 7% level for a 30-year fixed rate mortgage with the rates for a 15-year fixed rate mortgage about 1/2% better.

Historically-speaking, it’s not that bad….

This won’t necessarily make you feel better if you are a home buyer today but, if we look at the bigger picture (like the bottom chart that goes back to 1971) we’ll see that our current mortgage interest rates are not as bad as they seem, historically speaking. .  In fact, over the 52-year period depicted on the chart, about 60% of the time mortgage interest rates were higher than they are now.  If you’re in your 20’s or 30’s you likely don’t care and still think the rates suck since they are about double what they have been since you have paid attention to them.  If you’re a baby-boomer like me, it’s a walk down memory lane LOL.

Mortgage Interest Rates Based Upon the MND Rate Index

(click on chart for live, interactive chart)

Mortgage Interest Rates Based Upon the MND Rate Index

30-Year Fixed Rate Mortgage Interest Rates 1971-Present

(click on chart for live, interactive chart)

30-Year Fixed Rate Mortgage Interest Rates 1971-Present


Are Homebuyers Today Grossly Overpaying for Homes and Making Decisions They’ll Regret?

I’ve been in the real estate business since I was 17, which means it has been 45 years of experiencing various market conditions, including recessions, inflation, 18% mortgage rates, the burst of the housing bubble, and a myriad of other good and bad things. However, I can confidently say that I have never witnessed a real estate market quite like the one we have been experiencing in the past couple of years.

So, what makes the current real estate market so unique?
First and foremost, I’ve pondered this question extensively, and I honestly can’t recall a time in this industry when the supply of homes for sale was not at least 4 to 6 months’ worth. Although there was a brief period in 2015 when the inventory of homes in St. Louis fell below 4 months, it quickly returned to nearly 5 months. From 2016 until early 2020, the inventory fluctuated between approximately 2 and 3 months, and then began a downward trend, hitting a record low of less than a 1-month supply in the latter part of 2021. While the supply has slightly increased since then, it still hovers around 1 month.

Months of Inventory – St Louis 5-County Core – 2013 – 2023

This situation showcases the basic law of economics—supply and demand. The supply of homes for sale in St. Louis is exceptionally low, and even though the number of home buyers in the market has seemingly declined significantly over the past few years, there still isn’t enough supply to meet the demand of the remaining buyers. Consequently, in accordance with the law of supply and demand, prices tend to rise when supply is insufficient to meet demand. While it’s easy to increase widget production to meet demand, it’s not as simple to suddenly add thousands of homes to the market in the St. Louis real estate market. Factors such as a lack of available land for development in high-demand areas, lengthy approval processes for new developments, labor shortages in the trades, difficulty in controlling construction costs, and the significant time required to bring a substantial number of homes to the market contribute to this complexity. As a developer, I can attest that the development process is lengthy enough for the market dynamics to change entirely before the first home hits the market.

So, where did all the houses go in St Louis?  Why aren’t there more homes for sale?

Continue reading “Are Homebuyers Today Grossly Overpaying for Homes and Making Decisions They’ll Regret?

St Louis Home Mortgage Originations Drop To Lowest Level In Over 23 Years

This might not come as a surprise, given that St. Louis home sales experienced a nearly 20% decline in the past 12 months compared to the previous year, coupled with 30-year fixed-rate loan interest rates approaching 7%. However, mortgage loan originations in St. Louis during the first quarter of this year have reached their lowest level since ATTOM Data began tracking them in the first quarter of 2000. As depicted in the chart below, both home purchase mortgages and total mortgage originations (including purchases and refinances) hit record lows in the first quarter of this year.

During the first quarter, the St. Louis MSA recorded 4,733 mortgage originations, marking a 45% decrease from the previous quarter’s 8,666 originations, and a 54% decrease compared to the same quarter in the previous year when 10,410 mortgages were originated for home purchases

St Louis MSA Mortgage Originations Q1 2000 – Q1 2023 (Chart)

St Louis MSA Mortgage Originations Q1 2000 - Q1 2023 (Chart)

St Louis Home Prices Have Increased by 112 Percent Since 2000; Rental Rates Rise by 68 Percent

As the infographic below illustrates (which is available exclusively from MORE, REALTORS®) the median price of a home in St Louis (the 5-county core market) has increased 112% since 2000, from $124,900 in 2000 to $265,000 in 2022.  During the same time period, the median lease rate, or rental rate, for a St Louis home has increased by just 68%, moving from $955 in 2000 to $1,600 in 2022.

Leasing a home is obviously a better deal, right?

If we set aside the benefits (and responsibilities) of homeownership and the long-term investment aspects, simply looking at the monthly cost might lead us to the conclusion that renting a home in St. Louis could likely save us money compared to buying one. After all, if we just consider the fact that during the aforementioned 22-year period, the cost of buying a St. Louis home increased by nearly 65% more than the cost of leasing one, we would certainly lean towards that conclusion. However, if we account for interest rates, which impact the monthly cost of owning a home (assuming financing is involved), we find that the gap significantly narrows. This is because even though interest rates are higher now than they were just a year or two ago – in fact, roughly double – they are still lower than they were in 2000.

Factoring in interest rates, the gap between buying and leasing narrows significantly.

In 2000, interest rates for a 30-year fixed rate mortgage varied but averaged roughly 7.5%. In contrast, they were around 6% in 2022. As the infographic shows, when we take these rates into account to assess the monthly cost of owning a home, we observe that even though home prices have risen by 112% since 2000, the house payment on a median-priced home has only risen by 82%. While the increase in house payments at 82% is still greater than the 68% increase in leasing, the gap is much smaller. Once other benefits of homeownership are factored in, it becomes easier for many people to justify the additional cost of ownership.

To clarify, I am not claiming that homeownership is for everyone or that leasing is inherently inferior. In fact, I’ve been one of those people who have consistently said that homeownership isn’t for everyone. For many individuals, based on factors like their likelihood of relocating, job and financial stability, money management skills, and others, leasing can be a better alternative. I am simply trying to highlight that the cost gap between the two options may not be as wide as it initially appears.

Continue reading “St Louis Home Prices Have Increased by 112 Percent Since 2000; Rental Rates Rise by 68 Percent

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…

Do the Fed Funds rate and M2 money supply really matter to the St Louis real estate market?

For the past several months there have been many reports anticipating the moves of the Federal Reserve regarding interest rates then followed by tons of articles, blog posts and videos analyzing then predicting the impact of the Fed’s decision on the economy.  The other popular topic in this area is the “Money Supply”, usually M2 money supply and whether it’s increasing or decreasing as well as the impact on the economy.

Should St Louis homeowners and potential home buyers really care about the Fed Funds rate or M2 money supply?

First, let’s talk about the Fed Funds rate and what it is, what it is intended to do and the affect it can have on the real estate market.  The Fed Funds rate is the interest rate at which banks lend to each other overnight to maintain their reserve requirements. This rate is set by the Federal Reserve, and changes to the rate can have a ripple effect throughout the economy, including the mortgage and housing markets. When the Fed lowers the Fed Funds rate, it can stimulate economic growth by making it cheaper for banks to borrow money, which can lead to lower mortgage interest rates. Lower mortgage rates make it more affordable for homebuyers to finance their purchases, which can increase demand for homes and drive up prices. Conversely, when the Fed raises the Fed Funds rate, it can lead to higher mortgage interest rates, which can slow down the housing market and lead to lower demand and prices.

Next, the the M2 money supply.  The M2 money supply includes cash, checking accounts, savings accounts, and other liquid assets that can be easily converted into cash. When the M2 money supply increases, it can stimulate economic activity by making more money available for borrowing and spending. This can lead to lower mortgage interest rates as well, as banks have more funds available to lend out. However, if the M2 money supply increases too rapidly, it can lead to inflation, which can cause mortgage interest rates to rise.

So, as you can see, both the Fed Funds rate and M2 money supply can have a significant impact on the cost of a home mortgage as well as home prices so I would say the answer to the question I posed is “yes”.  Granted, we don’t all need to become economists or stay up late at night pouring through spreadsheets and date, but to be aware of factors that affect the economy as a whole and as a result, the real estate market we’re in, would be wise.

How can knowledge of the Fed Funds rate and M2 money supply help me as a home seller or buyer?

The short answer is, it gives you a little insight into perhaps where things are headed which may help you make the decision to buy or sell sooner or later. For example, perhaps  you are contemplating buying an home but anguishing over the fact the mortgage interest rates are double what they were a year or two ago and you’re thinking maybe you should wait until things settle down.  Well, if you see the Fed Funds rate getting increased with talk of more increases while that is no guarantee mortgage interest rates will increase as well, as I explained above, it’s certainly an indicator that is a likelihood.  Therefore, you may decide it’s better to make a move now than later.

What’s an easy way to track this stuff?

I have the answer for you.  The charts below are two of the many charts and other information available on St Louis Real Estate Search as well as from MORE, REALTORS® .  The first chart shows the relationship historically between St Louis home prices and the M2 Money Supply.  Generally, they follow the same trend but, when the trend for one changes, like it did with St Louis home prices (the red line on the chart) beginning in the late 90’s through the housing market bubble burst after 2006, something happens to bring them back in line.  As you can see, starting a little over 3 years ago the pace at which M2 was growing outpaced St Louis home prices, but St Louis home prices quickly caught up. Now it’s the opposite and it looks like both a making a downward correction.

The bottom chart shows the close relationship between the Fed Funds rate and mortgage interest rates.  With little exception, when the Fed Funds rate increases or decreases, mortgage rates follow. For the past year, the Fed Funds rate has increased and the trend is upward so I wouldn’t expect to see falling mortgage interest rates anytime soon.

Continue reading “Do the Fed Funds rate and M2 money supply really matter to the St Louis real estate market?

Missouri State Assistance for Housing Relief (SAFHR) Can Help Homeowners Struggling To Make Their Payments

The State of Missouri received $138 million from the U.S. Treasury’s Homeowners Assistance Fund (HAF) and are using those funds to help qualified homeowners that are struggling to make their house payments.  Missouri State Assistance for Housing Relief (SAFHR) is responsible for paying out these funds to help individual homeowners.

Who is eligible for assistance from SAFHR?

According to the SAFHR program guidelines, to qualify for SAFHR for Homeowners assistance, an individual or household must:

  • Earn no more than 150% of the area median income for the region where the property is located, as set forth in the HUD income guidelines for the St Louis metro area.
  • Have suffered a COVID-19 pandemic-related hardship that began on or after January 21, 2020, such as a loss of income or increase in household expenses related to the pandemic.
  • Require assistance with mortgage arrearage.

There are also 5 questions that, can answer “yes” to all of them, you are encouraged to submit an application to receive  Missouri State Assistance for Housing Relief (SAFHR) funds:

  1. Has your household experienced a financial hardship related to the COVID-19 pandemic since January 21, 2020?
  2. Are you a current resident of Missouri?
  3. Is the property you are seeking assistance for located in Missouri?
  4. Do you live on the property (primary residence) for which assistance is being requested?
  5. Do you have a mortgage on your home?

How do I apply for  Missouri State Assistance for Housing Relief (SAFHR)?

Well, if you appear to be eligible for assistance, the next step would to to register on the SAFHR site and complete an application. To access the registration form on the SAFHR site click here.

Mortgage Assistance Counseling is available as well.

As part of the SAFHR program, the Missouri Housing Development Commission (MHDC) has partnered with Mortgage Assistance Counseling agencies across the state of Missouri.  These agencies can help you complete your application for the SAFHR for Homeowners Program as well as help connect you with other services to avoid foreclosure.  To access the list of Mortgage Assistance Counseling agencies in Missouri, including the Missouri counties they serve  click here.



St Louis Home Prices Increased At Twice The Rate Of Rental Rates From 2018-2022

Should I rent or buy a home in St Louis?  This is a question St Louis REALTORS® are often asked, especially in the past few years while homes appeared to be increasing weekly, there were often more than a dozen offers on a listing and generally the market seemed out of control.  Granted, some of that pandemonium has eased somewhat lately given the increase in interest rates and questions about the economy but the question still remains.  While there are many non-financial reasons people choose to buy their own home or condo versus rent, we’ll just look at the cost today.

Home prices increased at more than double the rate of rents…

As the chart below, exclusively available from MORE, REALTORS®, shows, the median price of homes sold in St Louis during 2018 was $178,800 and increased to $240,000 in 2022 for an increase of over 34% during the 4-year period.  The median rental rate of homes leased in St Louis during 2018 was $1,250 and increased to $1,450 in 2022 for an increase of 16% during the same 4-year period.  During this 4-year period the rate at which the price of St Louis homes increased was more than double the rate at which the rental rates of St Louis homes increased.

Factor in interest rates and the cost of home ownership increase and monthly cost of home ownership 

As the second chart below shows, mortgage interest rates during 2018 were in the mid-to upper 4’s and in the 6’s and even hit 7% during 2022 so this means in addition to home prices going up, payments went up even more.  For the sake of this comparison, we’ll use 4.7% as the rate for 2018 and 6.7% for 2022.  Therefore, the payment on a typical home in 2018 (principal and interest only based upon a 5% downpayment) would have been $881 per month and in 2022 increased by 67% to $1,471 per month.  So, while the actual price of a home increased 34% during the period the monthly cost of it, in terms of house payment, increased at nearly double that rate, 67%.  During the same period rents increased just 16% so the monthly cost of buying a home increased four-times as much.

Continue reading “St Louis Home Prices Increased At Twice The Rate Of Rental Rates From 2018-2022

One in four St Louis city homeowners with a mortgage are underwater

Underwater Mortgage Photo

A new report just released by ATTOM Data revealed that nearly one of every four homeowners (24.3 %) in the city of St Louis that have a mortgage, are underwater on equity (meaning property owner owes at least 25% more on their home than the current value).  At the other end of the spectrum was St Charles County where just 3.9% of homeowners with a mortgage are underwater.

Below is a list of the larger counties in the St Louis MSA and the percentage of the mortgages in the respective county that was underwater during the 4th quarter of 2022:

  • City of St Louis, MO  (24.3%)
  • Saint Clair County, IL  (15.5%)
  • Madison County, IL  (13.4%)
  • Franklin County, MO  (10.5%)
  • St Louis County, MO  (9.7%)
  • Jefferson County, MO (8.1%)
  • St Charles County, MO (3.9%)

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St Louis Home Loan Originations Fall to a 12-Year Low

During the 4th quarter of 2022, 7,622 home buyers in St Louis applied for a home mortgage according to the latest report from ATTOM Data. According to the report, this is the lowest number of mortgage applications in a quarter from home buyers in St Louis since the 1st quarter of 2011 when there were just 5,629 applications.  Mortgage applications to purchase a home peaked in St Louis in the 3rd quarter of 2005 when there were 18,002 applications.

As the chart below illustrates, the drop in St Louis homeowners refinancing their mortgage is even more dramatic.  During the last quarter of 2022, 4,208 homeowners refinanced their existing mortgage marking the lowest number for a quarter in St Louis since AATOM began tracking the data back in 2000.  The refinancing boom in St Louis was during the 3rd quarter of 2003 when 54,281 St Louis homeowners refinanced their mortgage.

HELOC’s (home-equity line of credit) are down in St Louis as well.  During the 4th quarter of 2022, 3,166 St Louis homeowners took out a HELOC compared with 15,317 that did so during the HELOC peak in Q3 2003.  HELOC’s hit their low point during the 3rd quarter of 2000 when just 356 were originated.

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St Louis Mortgage Originations In St Louis – Q4- 2022

(click on chart for Live, Interactive chart)

St Louis Mortgage Originations In St Louis - Q4- 2022


FHA Loans Just Became A Little More Affordable

Today, the U.S. Department of Housing and Urban Development (HUD) announced a reduction in the mortgage insurance premium charged to borrowers on FHA loans.  The mortgage insurance premium is a charge over and above the interest on the loan that is the fee to HUD for insuring the loan.  Currently, the FHA mortgage insurance premium varies from 0.45% to 1.05% of the loan amount depending upon the loan term (15 or 30 years) and the LTV (loan to value).  Effective with FHA mortgages endorsed for insurance by FHA on or after March 20, 2023, the rate will be reduced by 0.30% across the board.

The table below shows the current charges for FHA mortgage insurance premiums for various loan terms and LTV’s as well as what the new charges will be.  On an FHA loan amount of $265,000 a borrower will have a monthly payment that is about $66.00 lower as a result of the reduction in mortgage insurance premiums.

FHA Annual Mortgage Insurance Premium (MIP) – Current Rates vs. New Rates

(click on table to see complete HUD press release)FHA Annual Mortgage Insurance Premium (MIP) - Current Rates vs. New Rates