Sunnier Days Ahead in Housing, Freddie Says

The housing market is stronger today than at any point since the Great Recession and has made progress in several key areas after hitting bottom in 2009, Freddie Mac reports in a blog post looking at the state of the housing market heading into spring.

Home sales are up 13 percent since their low point, Freddie Mac reports. Frank Notaft, Freddie Mac’s chief economist, predicts that home sales will rise about 3 percent in 2014.

Also, the agency reports that housing starts are up 50 percent since hitting bottom. Freddie Mac is predicting a nearly 20 percent increase in new-housing starts in 2014, “which will begin to help ease tight inventories in many markets.”

Housing prices have also been on the upswing, about 16 percent higher than their bottom in 2009, Freddie Mac reports. They expect home values to continue to rise this year, but at a more moderate 5 percent pace. Also, researchers say many markets are still posting housing values that are below their 2006 peaks.

Freddie Mac is forecasting mortgage rates to remain near their historic lows this year, but rates are expected to rise about a half-percentage point during the year to around a 5 percent average by the end of the year.

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More Banks Lower FICO Score Requirements

More banks are lowering minimum FICO score requirements in an attempt to shore up lending for underserved borrowers.

Carrington Mortgage Services is the latest company to announce that it has lowered its minimum FICO score to 550. It also has expanded guidelines on several FHA, VA, and USDA loan programs to aid those with FICO scores below 640.

Wells Fargo, the nation’s largest mortgage lender, said in February that it was lowering its minimum FICO score requirements on FHA-backed mortgages from 640 to…   (read full article here)

North Dakota Named Most Stable Housing Market

North Dakota; Washington, D.C.; and Wyoming rank as the most stable U.S. housing markets, according to a new Freddie Mac gauge that weighs criteria including mortgage applications, income ratios and employment.

Freddie Mac's Multi-Indicator Market Index released on Wednesday measures the stability of states and the U.S. capital, as well as the top 50 metropolitan areas. Nationally, the measure shows an improving housing market that's still outside its healthy range, the McLean, Va.-based company said in a statement.

"We're making progress, we're recovering but we're not all the way there yet," Len Kiefer, deputy chief economist at Freddie Mac, said in a phone interview. "Some places are much closer and others have farther to go."

The U.S. housing market has been healing for two years as the job market improves and competition for tight inventories fuels home-price gains. The S&P/Case-Shiller index of property values in 20 cities increased 13.2 percent in...   Read More Here...

Mortgage Rates Move Lower as Fed Delays Taper

Mortgage rates inched lower this week, following the Federal Reserve’s recent announcement that it would delay tapering its bond buying program. Mortgage rates have climbed more than one percentage point since May when speculation began that the Fed would start winding down its $85 billion per month bond buying program, which had helped keep mortgage rates low.
"Mortgage rates drifted downwards this week amid signs of a weakening economic recovery,” says Frank Nothaft, Freddie Mac’s chief economist. "This, in part, was why the Federal Reserve chose to maintain its MBS and bond-buying program. [The Fed] also cited the tightening of financial conditions observed in recent months, which in the case of the housing market means the rise in mortgage rates since May."
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 19:

• 30-year fixed-rate mortgages: averaged 4.50 percent, with an average 0.7 point, dropping from last week’s 4.57 percent average. Last year at this time, 30-year fixed-rate mortgage averaged 3.49 percent. 
• 15-year fixed-rate mortgages: averaged 3.54 percent, with an average 0.7 point, dropping from last week’s 3.59 percent average. Last year at this time, 15-year rates averaged 2.77 percent. 
• 5-year adjustable-rate mortgages: averaged 3.11 percent, with an average 0.5 point, dropping from last week’s 3.22 percent average. A year ago, 5-year ARMs averaged 2.76 percent. 
• 1-year ARMs: averaged 2.65 percent, with an average 0.4 point, dropping from last week’s 2.67 percent average. A year ago, 1-year ARMs averaged 2.61 percent. 

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Mortgage Interest Rates Remain Stable After Feds Decision Today!

 

Stock Market Soars on Fed’s Bond-Buying Announcement:

The Fed said it will keep pumping money into the economy at the same rate—a move that pushed the stock market to record highs. It also sent a warning to Republicans, writes Daniel Gross.

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Fed May Announce Bond Tapering This Week

The Federal Reserve is expected to announce a tapering of its bond purchase program Wednesday, which could have a big impact on mortgage rates.

The Fed has been purchasing $85 billion per month in long-term U.S. Treasuries and mortgage-backed bonds in a move known as "quantitative easing." The bond-purchase program has helped to keep mortgage rates at or near record lows in recent years.

On Wednesday, the Fed is to provide clear indication...

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