Climbing Mortgage Rates Reach 4-Year High

Climbing Mortgage Rates Reach 4-Year High

Mortgage rates continued to inch higher this week, marking the sixth consecutive week for borrowing cost increases for home shoppers.

“Wednesday’s Consumer Price Index report showed higher-than-expected inflation; headline consumer price inflation was 2.1 percent year-over-year in January, two-tenths of a percentage point higher than the consensus forecast,” explains Len Kiefer, Freddie Mac’s deputy chief economist. “Inflation measures were broad-based, cementing expectations that the Federal Reserve will go forward with monetary tightening later this year. Following this news, the 10-year Treasury reached its highest level since January 2014, climbing above 2.90 percent. Mortgage rates have also surged.”

After jumping 10 basis points last week, the 30-year fixed-rate mortgage rose 6 basis points to 4.38 percent, its highest level since April 2014.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 15:

• 30-year fixed-rate mortgages: averaged 4.38 percent with an average 0.6 point, rising from last week’s 4.32 percent average. Last year at this time, 30-year rates averaged 4.15 percent.
• 15-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.5 point, increasing from last week’s 3.77 percent average. A year ago, 15-year rates averaged 3.35 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.63 percent, with an average 0.4 point, rising from last week’s 3.57 percent average. A year ago, 5-year ARMs averaged 3.18 percent.

Source: Freddie Mac

First-Time Buyers May Have it Easiest Here

First-Time Buyers May Have it Easiest Here

First-time home buyers are entering the market under tight inventory conditions and rising home prices. But not all cities are posing a challenge for those looking to break in to homeownership.

A new study by LendingTree ranks the top cities for first-time home buyers in the nation’s 100 largest cities. They factored in average down payment amounts, the share of buyers using an FHA mortgage, the share of homes sold that the median income family can afford; and more.

First-time home buyers in Little Rock, Ark.; Birmingham, Ala.; and Grand Rapids, Mich., topped LendingTree’s list as best cities for first-time home buyers in 2018. Both Little Rock and Birmingham have low average down payments of just 12 percent or $24,896 and $27,000, respectively. Grand Rapids proved to be the best place to be an FHA borrower (59 percent).

On the other hand, LendingTree found in its analysis that Denver, New York, and San Francisco ranked as the most challenging cities for first-time buyers.

These 10 cities ranked at the top for first-time home buyers:

1. Little Rock, Ark.
2. Birmingham, Ala.
3. Grand Rapids, Mich.
4. Youngstown, Ohio
5. Winston, N.C.
6. Dayton, Ohio
7. Indianapolis
8. Scranton, Pa.
9. Pittsburgh
10. Cincinnati

Source: LendingTree

‘Tiny Homes’ May Have a Wider Buyer Pool

‘Tiny Homes’ May Have a Wider Buyer Pool

The tiny-home movement has been a popular topic among design television shows in recent years, but there was some debate about whether it was truly a lasting trend or not. But a new survey confirms that consumers are definitely intrigued by smaller homes, often described as less than 600 square feet.

More than half of adults recently surveyed–or 53 percent—said “yes” or “maybe” when asked if they would ever consider the possibility of buying such a small home, according to a recent study by the National Association of Home Builders. That means a majority of adults would consider moving into a tiny home at some point in the future, the NAHB notes on its blog, Eye on Housing.

Younger generations tend to find tiny homes more appealing than older age groups. More than half of millennials and Generation X members said they were open to the idea of a tiny home. However, only 45 percent of baby boomers and 29 percent of seniors said they’d be willing to entertain the idea.

But local zoning laws may curtail the prevalence of just how big the tiny-home movement gets. “Many local zoning laws have minimum lot size requirements, which wouldn’t prohibit tiny homes, but would make them very expensive considering the cost of land,” the NAHB reports on its Eye on Housing blog. “In addition, many communities prohibit the construction of accessory structures, preventing existing home owners from adding them to their lots.” However, there has been a recent momentum among some local jurisdictions to relax some of those restrictions.

Source: “Tiny Homes Have Potential Buyers,” National Association of Home Builders’ Eye on Housing blog (Feb. 7, 2018)

Market Volatility Giving Buyers Cold Feet?

Market Volatility Giving Buyers Cold Feet?

It seems a 1,000-plus point drop in the stock market last week mixed with rising interest rates may have been enough to give homeowners and buyers the jitters. Overall mortgage applications last week dipped 4.1 percent week over week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Broken out, mortgage applications for home purchases plunged 6 percent last week. However, that number is still 4 percent higher than last year. Home buyers complain of weakened affordability and lengthier home searches in research released this week by the National Association of Home Builders. Refinance applications dipped 2 percent last week, but they remain 2.8 percent higher than the same week a year ago.

“Refinance activity is continuing along a floor, while the drop in purchase may be related to short-term stock market jitters,” says Joel Kan, an MBA economist. “We still expect activity to pick up as we make our way into early spring.”

Mortgage rates continue to move upwards. Last week the 30-year fixed-rate mortgage rose to its highest rate since January 2014, averaging 4.57 percent, the MBA reported.

Source: “Stock Jitters and Higher Interest Rates Drive Weekly Mortgage Applications Down 4.1%,” CNBC (Feb. 14, 2018)

3 Ways to Improve Customer Connections

3 Ways to Improve Customer Connections

How do you create more lasting connections with customers? It may come down to becoming a better acquaintance with your client, working harder to anticipate their needs, and showing more empathy. RISMedia recently wrote about enhancing customer interactions, including:

1. Get to know your customer better. Track all interactions a client has with your brand: What emails did the customer open? What videos did they watch? What questions did they ask via social media? What purchases have they made? Not only will such information help you tailor your marketing to address their needs, but it also will increase customer satisfaction by showing you truly understand them, the RISMedia article notes. You can also use this information to develop predictive analytics about what similar customers will do.
2. Anticipate their needs. Be proactive when it comes to customers’ needs by reaching out to them first. “Anticipatory customer service” is when companies predict customer needs and proactively address them, writes Micah Solomon, author of High-Tech, High-Touch Customer Service. Companies can fix a problem before it amplifies. Be cognizant of the main obstacles your client faces and address potential issues promptly.
3. Empathize. Customers will never forget how you made them feel. Focus on what’s driving your clients’ emotions at each stage of the transaction, and walk a mile in their shoes. Listen to customers’ complaints so they feel heard, and then propose a practical solution or find a compromise.

Source: “Rewire the Digital Customer Experience: 6 Ways to Connect,” RISMedia