Mortgage Rates Keep On Pressing Higher

Mortgage Rates Keep On Pressing Higher

The 30-year fixed-rate mortgage reached its highest average since December 2016, Freddie Mac reports. This is the fifth consecutive week that mortgage rates have been on the rise, increasing borrowing costs for home shoppers heading into the spring buying season.

“Following a turbulent Monday,financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Will higher rates break housing market momentum? It’s too early to tell for sure, but initial readings indicate housing markets are sustaining their momentum so far.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 8:

• 30-year fixed-rate mortgages averaged 4.32 percent, with an average 0.6 point, rising from last week’s 4.22 percent average. Last year at this time, 30-year rates averaged 4.17 percent.
• 15-year fixed-rate mortgages averaged 3.77 percent, with an average 0.5, up from a 3.68 percent average last week. A year ago, 15-year rates averaged 3.39 percent.
• 5-year hybrid adjustable-rate mortgages averaged 3.57 percent, with an average 0.4 point, increasing from last week’s 3.53 percent average. A year ago, 5-year ARMs averaged 3.21 percent.

Source: Freddie Mac

Utility Bills May Be Getting Cheaper

Utility Bills May Be Getting Cheaper

Utility companies will pay less tax from a recent tax overhaul, and many are planning to pass those savings on to customers. Rate changes may shave a few dollars off the average customer’s bill in the coming months, The Wall Street Journal reports.

The federal government slashed its corporate tax rate from 35 percent to 21 percent. Regulated gas and electric utilities will have to pay less tax, and some state authorities may give regulated utilities little choice but to return that tax savings to its customers, WSJ reports.

Some regulated utilities will be refunding some of the tax payments they collected from customers based on the 35 percent rate. Companies may choose to issue refunds over several years, so the savings may be minimal for customers.

For example, National Grid U.S., a utility holding company with subsidiaries in New York, Massachusetts, and Rhode Island, expects a non-cash tax credit of $2 billion in 2018 from the lower tax rate. “It’s going to be returned to customers over a period of 20 to 30 years,” Peggy Smyth, the company’s finance chief, told The Wall Street Journal.

Some companies are using the tax savings to defray higher costs and prevent having to hike bills. For example, Florida Power & Light said it plans to use its savings to pay for $1.3 billion in recovery costs from Hurricane Irma. Customers may not see any reduction in utility bills, but it will spare them from any increases, the company said.

Duke Energy Corp, with subsidiaries in North Carolina, is in the process of requesting permission from local authorities to cut retail rates or use its tax savings to defray the cost of storm-related recovery efforts, WSJ reports.

“Tax reform has presented us a unique opportunity to reduce customer bills in the near term, while also helping to offset future rate increases,” says Steven Young, Duke Energy’s finance chief.

Source: “As Utilities Move to Pass Tax Savings to Customers, Credit Concerns Arise,” The Wall Street Journal (Feb. 7, 2018)

When in Life Do Most People Achieve Ownership?

When in Life Do Most People Achieve Ownership?

The average consumer’s life is filled with financial milestones, and buying a home is a major one. But when do most people reach the milestone of home ownership? Researchers at Comet Financial Intelligence, a student loan refinancing resource, surveyed 1,200 Americans on how long it took them to complete their financial “rites of passage” with home ownership and other savings hurdles. Among their findings:

• The millennial respondents surveyed say they expect to purchase their first home three years before paying off their student loans. As such, millennials may be prioritizing paying down their student loans before buying a home, and that may explain some of their delay into home ownership compared to previous generations, the survey says.
• The average age at which people buy their first home is 29.1 years old. Regardless of which generation they belong to, most Americans will be homeowners by age 35.
• Three-quarters of millennials surveyed do not yet own homes, and they will be 34.4 years old, on average, by the time they take out their first mortgages.

The average consumer’s life is filled with financial milestones, and buying a home is a major one. But when do most people reach the milestone of home ownership? Researchers at Comet Financial Intelligence, a student loan refinancing resource, surveyed 1,200 Americans on how long it took them to complete their financial “rites of passage” with home ownership and other savings hurdles. Among their findings:

• The millennial respondents surveyed say they expect to purchase their first home three years before paying off their student loans. As such, millennials may be prioritizing paying down their student loans before buying a home, and that may explain some of their delay into home ownership compared to previous generations, the survey says.
• The average age at which people buy their first home is 29.1 years old. Regardless of which generation they belong to, most Americans will be homeowners by age 35.
• Three-quarters of millennials surveyed do not yet own homes, and they will be 34.4 years old, on average, by the time they take out their first mortgages.

Source and full piece  here cometfi.com

Owning Makes More Financial Sense

Owning Makes More Financial Sense

As home prices and rental costs rise, more consumers are scrutinizing their best financial move: to buy or rent?

Realtor.com®’s research team analyzed annual median rental costs versus annual median costs of homeownership (including mortgage payments, taxes, and homeowners insurance) to find whether buying or renting made more financial sense in the nation’s 500 largest counties. Realtor.com® also factored in median incomes in each of the counties.

“Homeownership is the opportunity to build wealth. It also helps people be more stable,” says Joseph Kirchner, a realtor.com® senior economist. “If there’s a recession and you lose your job for a year, then people can take out a home equity loan and get through the hard times.” However, the entry costs of homeownership may prove a barrier to many. (Realtor.com®’s study did not factor in the costs of down payments or annual maintenance costs.)

The analysis found that some markets are better for buyers than renters. Those locales include:

1. Baltimore County, Md.

• Median monthly rental cost: $1,443
• Median monthly homeownership costs: $900
• Median home sale price: $257,000

2. Clayton County, Ga.

• Median monthly rental cost: $1,185
• Median monthly homeownership costs: $660
• Median home sale price: $130,000

3. Schuylkill County, Pa.

• Median monthly rental cost: $847
• Median monthly homeownership costs: $390
• Median home sale price: $71,000

4. Cumberland County, N.J.

• Median monthly rental cost: $1,271
• Median monthly homeownership costs: $840
• Median home sale price: $130,000

5. Wayne County, Mich.

• Median monthly rental cost: $1,008
• Median monthly homeownership costs: $630
• Median home sale price: $86,000

Source: “Rent vs. Buy: 10 Cities Where You’ll Get the Most Bang for Your Buck,” realtor.com® (Feb. 5, 2018)

Equifax Extends Free Credit Freezes to June

Equifax Extends Free Credit Freezes to June

Following the largest data breach in the nation’s history, Equifax announced that it is extending its free credit freezes to consumers through June. The data breach this past fall exposed the personal information of about 143 million Americans, and has even prompted warnings from housing analysts that the breach could impact buyers’ ability to complete a home sale.

Read more: How Equifax Breach Could Hurt Home Sales

The personal information stolen by hackers could compromise consumers’ Social Security numbers, addresses, and credit card information and potentially stall their loan approval or even have their information shared and used in unlawful real estate transactions.

To safeguard their credit, many consumers have opted to put a freeze to their credit accounts. Security freezes can prevent credit reporting companies from releasing a credit report without the person’s consent and prevent thieves from opening an account or getting credit using their personal information. But a freeze can also potentially delay, interfere with, or prohibit timely approval of any financing request or application, such as with a mortgage, rental housing, new loans, utilities, and more. Therefore, home shoppers will need to remember to unfreeze their accounts before applying for a mortgage.

Equifax’s original deadline for free credit freezes was set to expire Jan. 31. But now, consumers will have another five months to request a credit freeze through June 30. Consumers who freeze their credit report through Equifax may want to do the same at the other two major credit bureaus, Experian and TransUnion.

Also in keeping accounts more secure, Equifax announced the launch of a new credit locking service app called Lock & Alert, also available for free. While a credit freeze can be lifted by a consumer with a PIN, a credit lock uses “modern authentication techniques, such as username and passwords and one-time passcodes for better user experience,” Equifax explained recently to CNN Money. The app is available through the App Store and Google Play.

Source: “Equifax Launches Its Credit Locking App and Extends Free Credit Freezes Through June,” TechCrunch (Jan. 31, 2018)