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It seemed like a simple solution for expanding the credit profile of many first-time homebuyers, but Fannie Mae’s new plan to utilize rent payment history to that end will not immediately remedy the situation. Linda Goodman and Jun Zhu, in a new post on the Urban Institute’s (UI’s) Urban Wire blog, say it will eventually prove beneficial to many borrowers.
The two write that rental payment history is a strong predictor of borrower performance on a mortgage and Fannie Mae estimates its new process will allow about 17 percent of first-time borrowers, who are initially turned down for a loan, could be approved if they have a clean 12-month rental payment history. However, they say not all originators will be prepared to offer borrowers this option on its September 18 launch date.
…(read more)#fidelityhomegroup, #homebuyerexperts, #mortgagerates #mortgagenews # mortgage
The July report on residential construction from the U.S. Census Bureau and Department of Housing and Urban Development shows that permits increased during the month for only the second time since January while housing starts posted a significant decline, falling in three of the four major regions.
Permits for residential construction were at a seasonally adjusted annual rate of 1.635 million units, up 2.6 percent from the 1.594 million rate in June. June’s permits were originally reported at 1.598 million units. The rate of permitting was 6.0 percent higher than the 1.542 million unit estimate in July 2020.
The permitting number was slightly higher than expected. Analysts polled by Econoday had a consensus forecast of 1.62 million units and Trading Economics‘ predictions came in at 1.61 million.
…(read more)#fidelityhomegroup, #homebuyerexperts, #mortgagerates #mortgagenews # mortgage
Bonds Finally Have a Boring Day
10yr yields traded in a range of less than 3bps during the domestic session today. From 10:30am on, that range narrowed to only 1bp. We haven’t had a day like this in a while–3+ weeks at the very least. When things are flat and boring, there’s not much to say that hasn’t already been said this morning.
#fidelityhomegroup, #homebuyerexperts, #mortgagerates #mortgagenews # mortgage
Mortgage rates were slightly lower today as the bond market improved for the 2nd straight day. When bonds prices move higher, bond yields (or rates) move lower, all other things being equal. In the current case, bonds were generally cautious heading into yesterday’s reading of the minutes from the most recent Fed meeting (read more), but have been bouncing back ever since.
All that having been said, the movement has been fairly gradual. The average mortgage borrower may not even see any different between yesterday and today’s rates. That’s because mortgage lenders typically offer rates in 0.125% increments, and it takes quite a bit more movement in the bond market for rates to change that much.
…(read more)#fidelityhomegroup, #homebuyerexperts, #mortgagerates #mortgagenews # mortgage, bond markets, Interest Rates, mortgage rates
In late July, bonds rode a wave of momentum toward lower yields with many traders targeting the 1.25% zone in 10yr Treasuries. That floor was broken on Monday July 19th. The rally extended to 1.128% before bouncing moderately. Another attempt was made in the week before last, but 1.128% held firm again. Heading into last week’s bond market supply, yields spiked, but bounced firmly at the 1.37/1.38% technical level.
These juxtaposed bounces make decent sense. After 4 months of rallying and a break of the 1.25% target, it was no surprise to see…
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There’s a common misconception that younger generations aren’t interested in homeownership. Many people point to the fact that millennials put off purchasing their first home as a reason for this belief.
Odeta Kushi, Deputy Chief Economist for First American, explains why millennials have put off certain milestones linked to homeownership. Those delays led to their homeownership rates trailing slightly behind older generations:
“Historically, millennials have delayed the critical lifestyle choices often linked to buying a first home, including getting married and having children, in order to further their education. This is clear in cross-generational comparisons of homeownership rates which show millennials lagging their generational predecessors.”
So, it’s partially true that some millennials have waited on homeownership to focus on other things in their lives – and that’s impacting certain housing market trends.
Data from the National Association of Realtors (NAR) indicates the average age of a first-time homebuyer is higher today than it’s been over the past 40 years. As the graph below shows, homebuyers today are purchasing their first home an average of 4 years later than people in the 1980s and early 1990s:
But just because millennials are hitting certain milestones later in life doesn’t mean they’re not interested in becoming homeowners. The recent U.S. Census reveals a significant increase in homeownership rates for millennials and other young homebuyers.
As the graph above shows, millennials are entering the market in full force, and their share of the market is growing. Based on the data, the belief that younger generations don’t want to buy homes is a misconception. In fact, the recent Capital Market Outlook report from Merrill-Lynch further drives home this point, as it specifically mentions the effect millennials are having on demand:
“Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle.”
Kushi is following the trend of millennial homeownership and puts it more simply, saying:
“. . . it’s clear that younger households (millennials!) are driving homeownership growth.”
As the largest generation, millennials’ impact on the market is growing as more and more people from that generation reach homebuying age – and Generation Z isn’t far behind, either. That means younger generations will likely continue to drive demand in the housing market for years to come.
If you’re a member of a younger generation and interested in purchasing a home, you’re not alone. Many of your peers are on their path to homeownership, too. Let’s connect today and discuss what you can do to accomplish your homebuying goals.
Content previously posted on Keeping Current Matters Keeping Current Matters#floridamortgage, #floridamortgagerates, #floriodamortgagenews
Bonds Sell Rumor, Buy New on Inconsequential Fed Minutes
A lot has happened in the past 3 months–especially when it comes to the variables that could impact Fed policy going forward. This made any massive reaction to today’s Fed Minutes a long shot, but it’s always good to be prepared for some volatility when it comes to the Fed. Traders prepared by selling bonds ahead of the 2pm release. When the minutes proved to be every bit as docile as they might…
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Mortgage rates haven’t been skyrocketing, by any means, but they have been moving up in fits and starts over the past 2 weeks. Today was just another page in that story despite a relatively friendly reaction to the Fed Minutes.
What are the Fed Minutes? Well may you ask! If you’re familiar with the notion of “meeting minutes,” that’s basically what we’re dealing with. In the Fed’s case, the minutes offer a robust recap of the discussion that takes place during the Fed policy meetings. These can be extraordinarily important events for financial markets–especially the bond side of the market (bonds dictate interest rates, including those for mortgages).
Even though the most recent Fed meeting was 3 weeks ago, traders are nonetheless anxious for any clues about future Fed decisions. In today’s case, the anxiety played out in the form of bond market weakness ahead of the Minutes (weaker bonds imply higher rates) followed by a recovery after the Minutes proved to be fairly boring.
…(read more)#fidelityhomegroup, #homebuyerexperts, #mortgagerates #mortgagenews # mortgage, bond markets, Interest Rates, mortgage rates
The Fed has increasingly been discussing its tapering strategy. They haven’t been shy about saying so. In fact, at least 5 members have vocally supported announcing tapering in the September meeting if jobs gains continue at the current pace. But that’s just the 5 who’ve opted to speak up. There could be a few others who share that sentiment, and today’s Fed Minutes would help the market get a better sense of the number a week before Powell adds even more clarity (hopefully) in Jackson Hole.
Even if that number is surprisingly high, we should also consider…
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