Breaking News! Release of 2019 and 2020 mortgage rate predictions

October 2018 forecast: Mortgage rate at 5.6% in 2020

Oct. 29, 2018 5:34 PM ET|About: |By: Liz Kiesche, SA News Editor

 

Predicted Mortgage Rates: 30-year fixed-rate mortgage rates to rise to 5.1% in 2019 and 5.6% in 2020, up from expected average rate of 4.5% this year, according to the October Forecast.
 

 

How high will payments go with the higher rates?
4.50% was the Average rate for 2018
5.1% in 2019 (+$49/month on a $300,000 Loan Amount)
5.6% in 2020 (+$143/mo. on $300K LA)
If take into consideration the increase in value (see below)
the payment increase in 2020 is estimated to be +$153 higher.




Home prices are expected to increase 5.4% in 2018 with the growth rate slowing to 4.6% in 2019 and 2.9% in 2020.

 Home price increases on a home valued at $331,100 (Dec 2017):

Value at the end of 2018=+5.4%= $350,000

Value at the end of 2019= +4.6% = + $16,100= $366,100

Value at the end of 2020= +2.9%= +$10,600= $376,700 home

Total of a $45,600 increase in value in THREE years!





 

Total home sales--new and existing--are now forecasted to decline modestly this year to 6.07M, and then increase 1.8% to 6.18M in 2019 and rising 1.1% to 6.25M in 2020.





 

 

                                                     
                                                     
Summary statement: 

"While we expect the weakness in housing activity to extend the next few months as the market absorbs the recent uptick in mortgage rates, the combination of strong economic growth and millennials moving toward homeownership should help home sales regain momentum and rise modestly in 2019," says Chief Economist Sam Khater.

                       

Marty Qualls
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email: mqualls@primeres.com

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Study says: Be an Influencer AND a Real Estate Agent and 80% of Millennials will want you!

A majority of millennials said they would consider hiring an "influencer" as a real estate agent, according to a new study.

A survey of 1000 millennials born between 1982-1999, with income greater than $100,000 per year, found that 84% of these "High Earners, Not Rich Yet" or "HENRY's" confirmed that, "Influencers impacted their decision to make purchases and 80% would consider hiring one as a Real Estate Agent".

To be an influencer, we hear the phrase ‘be a digital mayor’ often in the real estate industry, but that’s not enough anymore,” said Engel & Völkers Americas President and CEO Anthony Hitt. 

While you have to have the neighborhood knowledge, social presence, work for the right company, have the reputation that precedes your interaction with buyer's and seller's, you also have to have a niche or distinguishing factor that blends this knowledge with entertainment or aspirational value that will make you a center of influence — building your following and referral base as a result.

The survey also found that 98% of HENRY's rely on social media or reviews based on websites like Yelp.  With HENRY's poised to become the next generation of wealth, Realtor branding must set out specifics on how they plan to serve this distinctive generation. 

Here are the top three factors for HENRY's choosing a Real Estate Agent:
1)  Referral from Friends and family 59%
2)  Reputation in the local neighborhood 53%
3)  Local neighborhood expertise 50%

Authenticity has never been more important, and real estate agents should position themselves as trusted advisors and sources of insider information before, during and after the transaction.

These consumers are going to seek out agents they feel are knowledgeable and trustworthy — and ones that they can relate to or even aspire to on certain levels.

Source of information from Gabriela Barkho, Inman News


Marty Qualls
PRMI Mortgage-Ogden Office
801-540-5108
email: mqualls@primeres.com

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Save money on your Mortgage with your Mortgage Loan Servicer

Modify your loan:
If you are late on payments or going through tough times, you might qualify for a loan modification through various programs.  Whether PRMI is your loan servicer, or if you make your payments to someone else, loan modification is an excellent opportunity for you to work out a program to enable you to stay in your home!  

Depending on the program, you could qualify for a reduced interest rate, forgiveness of part of the principal, or an extended loan period and lower monthly payment. Check out various programs on MakingHomeAffordable.gov or contact your mortgage servicer.



Marty Qualls
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Questions?  send me an email: mqualls@primeres.com
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What can cause mortgage rates to go up?

Federal Reserve Chairman Jerome Powell testified in front of the House Financial Service Committee on the State of the U.S economy.  Wages have increased 2.9% year over year in January (after a dismal 2.5% average in 2017) and as wage growth continues, businesses will need to fund this growth with higher product prices.  This will contribute to inflation.  Inflation hurts bond values and when bond prices go down, rates go up. 

The Mortgage Bankers Association (MBA) continues to predict that there will be four short term borrowing rate increases this year (what the government charges banks for overnight loans).  These rate changes will create ongoing volatility in mortgage rates.  The MBA has also predicted an average rate of 4.80% in the 4th quarter, 2018.

According to S&P Case Shiller, December saw home prices increasing and February consumer confidence hit the highest level since November, 2000.  Wage increases, higher product prices, home value increases and consumer confidence at a multi year high predict increasing mortgage rates. 

Here's where all of this information took me this morning:

This morning, I calculated an increase of $47/mo in house payment at a future 4.8% interest rate versus what we have available today.  My client this morning was wondering if buying now or waiting until the end of the year made the most sense considering they are locked into a rental contract until year end? 

Mortgages with Marty in Utah!
 

Something else to consider would be home value appreciation and a higher sales price of $15,600 (considering a 6% home value appreciation per year).

With higher rates and higher sales prices at year end, my client is now wondering if it makes sense to break their lease early and purchase now?

If you would like to review your options to purchase or refinance, give me a call at 801-540-5108. 

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Today's rates and what it means for January 2018?

Today's Rates Mortgage rates today have opened unchanged, as investors ignored this morning's financial reporting and continued to wait for Friday's Employment Report. The Institute For Supply Management released its ISM Manufacturing Index for December. The index tracks where production managers in the US feel their business is heading -- anything over 50 means business is increasing. Experts anticipate that the index will drop slightly from last month's 58.2 to 58.0. We got a rise, however, to 59.7. This could hurt rates if anyone pays attention to it -- the report is known to be volatile.

Manufacturing and production output (as well as the feeling business has about the future of the economy) is a predictor or WHEN inflation will start.  In my experience over the years, I have seen this increase in the ISM a preview of increasing rates (inflation). 

Purchase or Refinance:online application

Marty Qualls
801-540-5108
mqualls@primeres.com


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Rate forecast for January 2018

 

It's a new year, but a similar story from years past is on repeat. Mortgage rates are low, but not for long. Just about every analyst out there is calling for higher rates in the new year. The economy is breaking records, and a freshly minted tax code could induce economic expansion, but also inflation. All these factors are bad for mortgage rates. The good news, though, is that rates are surprisingly steady in the face of overarching changes like the new tax law. A golden opportunity still exists for those who are looking to buy or refinance a home in 2018.

 

Marty Qualls  801-540-5108 mqualls@primeres.com

Conforming Mortgage Loan Limits for 2018 increasing!

New Conforming Loan Limits in 2018

The Federal Housing Finance Agency (FHFA) announced new maximum loan limits effective January 1, 2018 for conforming loans.

In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017. Higher loan limits will be in effect in higher-cost areas. New loan limits, however, will not take effect in 71 counties or county equivalents around the country.

What prompted this change? The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year to reflect the change in the average U.S. home price.

On November 28, FHFA published its third quarter 2017 House Price Index report, which included estimates for the increase in the average U.S. home value over the previous four quarters. According to the report, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017. Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.

With home prices on the rise, the conforming loan limit increase opens up opportunities and helps keep home loans more affordable for more Americans.

If you'd like to learn more about these new loan limits or other loan products, please get in touch with me today. I'm happy to help!


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When are mortgage rates going to go up?

For the fourth straight month, the Rasmussen Reports Consumer Spending Update shows confidence in the economy trending upward - with an amazing 25-point overall increase in economic confidence and a 26-point increase in confidence in the direction of the economy since the 2016 presidential elections.

#1 wealth accumulator in America is to own real property!

What does this mean for interest rates?  Are they REALLY on the way up like everyone is talking about? 

Because the economic cycle predicts what will happen with interest rates relative to growth of wages, consumer confidence, Wholesale price escalation, etc., we have data which supports what will be happening in the future of the mortgage industry in 2017. 

Okay, so what is going to happen? 

As consumer confidence increases, our economy is expanding and workers (consumers) will buy more products, increasing demand which at a certain point, creates inflationary pressure (From our old days in Econ 101-Demand and Supply lecture). 

Mortgage bonds HATE inflation!  So, If bond prices go down, because they don't like inflation, rates go up.  Really, from my vantage point and from what I read from experts that are a whole lot smarter than I am, it's just a matter of time before the rates go up. 

Then you might be wondering by how much will the rates be increasing?  That's for another post. 

But for now? Our rates continue to hover at historic lows.  Great news for purchasing, building and refinancing.  

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I look forward to helping with mortgage questions and needs! 

Marty  801-540-5108

Home Values Increasing Along With Ownership

It was an exciting time for home ownership growth in 1992 as Bill Clinton became our 42nd President.  President Clinton PUSHED for homeownership in America!  It made sense for America because there would be less public assistance needed because there would be fewer divorces because that's the good thing about owning a home, it provides stability.  Statistics supported family formation AND home ownership to stop the drain on financial assitance. 
President Clinton knew his numbers. 
He knew his facts.
He knew that welfare and other public assistance costs associated with a single parent home would decrease, IF he could get what he wanted...
His goal was that 67% of American households would be home owners!

President Clinton came close to reaching his wishes of American homeownership as the housing industry BOOMED!  But it wasn't until June, 2004 when then President #43, George W Bush, reaped the rewards of a fully engaged economy working WITH mortgage rates and home ownership to create a country where...
69.2% of American Households owned a piece of the rock!

Agenda's change, the economy lags, goals for homeownership fall away and twelve years go by and on July 28, 2016 American household home ownership FELL to the lowest level since 1965...
62.9%.  :(  Boo! 

19 months later we now see the percentage of American Households owning their own home increasing, ever so slightly, but increasing every quarter!  :) Yay!
As we closed out 2016 and were on the verge of swearing in our 45th President, we now see...
63.24% of American's OWNING!  

These are households who are not renting or living with relatives and are enjoying the current home value appreciation of 3-7% annually (depending on the state you live in and/or the neighborhood you live in-YES, the neighborhood in UTAH makes a 3% difference in annual home value appreciation, just ask your Realtor!).

Marty Qualls
Professional Mortgage Services since 1991
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When is the "perfect" time to lock your mortage rate?

Know How To Recognize A Good Mortgage Rate

Mortgage lenders are often asked if there is a best time of day, day of the week, or period of the year when a prospective borrower should lock in a mortgage interest rate. 

The truth is, no one can tell with any degree of accuracy what rates will do.
In fact, the best time to lock a mortgage is when the unexpected happens.

Case in point: Brexit
Recently, Britain voted to exit the European Union. “Brexit,” as it is known, caused an international "flight to quality," meaning investors worldwide sought perceived safe assets like U.S. mortgage bonds. Mortgage rates fell dramatically.
These unforeseen shifts are the best time to lock a mortgage. But what if you’re not fortunate enough to be rate shopping during a period of mortgage rate upheaval?
Then, you go into the process knowing how to recognize a good rate, and being ready to lock it in.

Locking The Perfect Rate Is Like Hitting A Moving Target

Purchasing a home could be the most impactful financial decision you will make in your life. You want to capitalize on the lowest possible rate.
In an ideal world, you would know when to pull the trigger on a rate lock with perfect timing -- assured in the knowledge that rates have hit their relative lowest point. But with interest rates subject to change daily and even hourly, choosing the right time to pull the trigger on a rate lock can be difficult.
This is a matter best discussed with experienced mortgage expert who can review your unique situation and suggest relevant options.

Condo Certs are difficult to obtain!

Is it any wonder nobody wants to originate a mortgage for a condo these days? Not only are there exceptionally stringent guidelines to adhere to as far as whether the project is eligible for financing, but it costs the donation of your left kidney to obtain the documents required to determine this. For a good while the trend has been for Property Management companies to steer us to an automated website in order to obtain the elusive condo questionnaire, Master Insurance Policy, Budget, CCRs, Litigation Information, and Bylaws. In order for one to gain access to these all important items, it is required to pay upwards of $250! After waiting a few days, time that can barely be spared, the documents are available to download, at which point you discover the Master Insurance Declaration Page is expired, or the project is non-warrantable, which sees your $250 go up in flames as your money was spent on a project that is not worthy of a regular loan.