Renting

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The 30-year fixed rate loan continued to move downward, falling another 1 basis point this week, to its lowest level since the beginning of April, Freddie Mac said.

It averaged 6.86% as of June 27, compared with 6.87% one week prior but up from 6.71% for the same period one year ago, the Primary Mortgage Market Survey found. The last time this rate was lower was in the April 4 survey.

It diverged from the week-to-week movement in the 15-year FRM. The average for these loans rose to 6.16%, compared with last week when it was 6.13%. A year ago at this time, this product averaged 6.06%.

“The 30-year fixed-rate mortgage continues to trend down, hitting the lowest level in almost three months,” said Sam Khater, Freddie Mac’s chief economist, in a press release. “By historical standards, the economy is in good shape, and we expect rates to continue to come down over the summer months, bringing additional homebuyers back into the market.”

Rate movements as tracked by Freddie Mac reflected those of the 10-year Treasury yield at least for most of the past week.

While the 10-year Treasury remained in a narrow range for most of the past seven days, on June 26, it rose 8 basis points from its prior close to 4.32%, its highest close since June 11.

But in early morning trading on Thursday, it was back down to 4.29%.

That has yet to translate to mortgage pricing. Zillow’s rate tracker as of 11:45 a.m. was up 3 basis points from the previous day and 12 basis points from the previous week’s average to 6.66%.

Rates for the 30-year FRM from the Lender Price product and pricing engine posted on the National Mortgage News website at 10:20 a.m. on Thursday morning was back over 7%, to 7.021%, by 11:45 a.m. it was at 6.995%. But this was still nearly 14 basis points higher than the 6.86% it was at one week ago.

Even with rates rising, they have been relatively flat throughout June, and much lower than they were this past Spring, said Orphe Divounguy, senior economist at Zillow Home Loans.

“The recent economic data suggest economic growth will slow and inflation could return to the Fed’s 2% target sooner than previously anticipated,” Divounguy said in a Wednesday night statement. “Moderating consumer spending, falling home sales and rising home vacancy rates point to lower aggregate demand and easing price pressures in the months ahead.”

Pending home sales fell 2.1% month-to-month in May, a Thursday morning announcement said, but the outlook is somewhat better because of how rates moved in June, said Odeta Kushi, deputy chief economist at First American Financial.

“If mortgage rates continue their descent alongside rising inventory levels, some buyers may be enticed off the sidelines and boost the summer home-buying season,” Kushi said in a statement. “Nevertheless, a robust summer recovery is unlikely given ongoing affordability constraints.”

The Mortgage Bankers Association’s Weekly Application Survey released yesterday put the 30-year conforming FRM at 6.93%, down 1 basis point.

“Housing inventory is rising, albeit from very low levels, and mortgage rates are now below 7%,” said Bob Broeksmit, the MBA’s president and CEO, in a Thursday morning statement. “This is good news for prospective buyers — especially those with children — looking to move before the school year begins.”

The June 28 Personal Consumption Expenditures index release is the next milestone that could affect rate movements as investors use the data to adjust their inflation forecasts.

“Core inflation is expected to have moderated further over the past month,” Divounguy said. However, a higher-than-expected inflation print could undo progress and push rates higher.”

Source: nationalmortgagenews.com

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May turned out to be a dismal month for home sales. Sales of existing homes dipped a modest 0.7 percent from April, but new home sales fared far worse. The U.S. Census Bureau and Department of Housing and Urban Development report that sales of newly constructed single-family homes were at a seasonally adjusted annual rate of 619,000 units during the month. This is 11.3 percent below the sales level in April and down 16.5 percent compared to May 2023. However, April sales, originally estimated at 634,000 units, was upgraded to 698,000.

Analysts had expected a better performance. Those polled by Econoday had a consensus forecast of 650,000 units.

On a non-adjusted basis, 56,000 homes were sold during the month compared to 62,000 in April.

Inventories continued to improve. At the end of May, there were 481,000 homes available for sale, nearly 13 percent more than a year earlier. The increase in availability is more apparent in the context of current sales.  The inventory for May is projected to be a 9.3-month supply at the current sales rate. This is a 14.8 percent increase from April and 34.8 percent from a year earlier.

The median price of a home sold in May was $417,400 compared to $421,200 in May of 2023. The average price rose, however, increasing from $495,800 to $520,000.

May sales fell compared to the previous month in all four regions and rose year-over-year in only one. In the Northeast, sales plummeted 43.8 percent compared to both April and the prior May. Midwest sales were down 8.6 percent for the month but rose 12.2 percent on an annual basis. The South saw decreases of 12.0 percent and 17.7 percent, respectively, from the two earlier periods. Sales slowed by 4.5 percent in the West and were down 20.9 percent from May 2023.

Thus far in 2024, new home sales total 300,000 units. This is identical to sales during the same period in 2023.

Source: mortgagenewsdaily.com

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There are some upcoming dates in which mortgage rates may adjust downward, even slightly.

Getty Images/iStockphoto


Mortgage interest rates plummeted to near-record lows in 2020 thanks to the pandemic and interest rate cuts courtesy of the Federal Reserve. Since then, however, buyers and those looking to refinance haven’t been as fortunate. With a combination of decades-high inflation and multiple interest rate hikes designed to tame it, mortgage interest rates reversed their trajectory and hit their highest point since 2000 last summer. 

However, while not nearly as low as they’ve been, there have been some encouraging developments so far in 2024. Rates are already nearly a point lower than they were toward the end of 2023, and that’s absent a formal reduction to the federal funds rate. And there’s new optimism that rates on home loans could drop even further, possibly in the weeks and months to come. For both buyers and owners looking to refinance, then, it’s important to know when to expect these potential changes. 

To that end, below we gathered three important upcoming dates that could portend significant mortgage rate cuts to come.

See how low of a mortgage rate you could secure here right now.

3 upcoming dates that could affect mortgage rates

The timing of your mortgage application plays a key role when looking for the lowest rate possible. So, you’ll want to closely monitor the following dates this summer: 

July 11, 2024

The last two inflation reports released by the Bureau of Labor Statistics have shown a slow but steady drop in the inflation rate, moving from March’s 3.5% to April’s 3.4% and then down from there to 3.3% in May. If the report for June – scheduled to be released on July 11 – shows yet another drop, it could spark renewed market optimism and a reduction in interest rates, including for mortgages. While a formal rate cut would be preferable for borrowers, economic indicators like a lower inflation rate could nudge lenders to start offering slightly lower rates in anticipation of an official reduction. So pay attention to this date.

Explore your current mortgage rate options online today.

July 31, 2024

The Federal Reserve will conclude its next two-day meeting on Wednesday, July 31 and, with it, will announce its next steps regarding interest rates and the fight against inflation. If the inflation report released on July 11 is an encouraging one, then, the Fed could potentially announce its first rate cut of the year. Or, they could simply hint at one to come (as they have been). Either move could affect what mortgage lenders offer borrowers. So if you have a home that you’re ready to buy, this could be a smart time to consider acting. 

August 1, 2024

The Federal Reserve won’t announce its next rate move until 2:30 PM ET on July 31, giving lenders and the market very little time to react. But the next day, August 1, could see significant movement in the rate climate, depending on what happened the day prior. By August 1 the Fed’s moves (or inactivity) will have had a chance to reverberate through the wider rate climate, potentially giving borrowers a chance to capitalize by locking in a lower rate. So you should be prepared to lock in a rate on this date, even if it means having to unlock and lock in a better, lower one before closing.

The bottom line

Mortgage rate movement is often full of speculation and there are a variety of factors involved. With a new inflation report and Federal Reserve meeting scheduled for July, however, and the reverberations from that potentially felt dramatically on August 1, homebuyers and owners looking to refinance should mark their calendars for these dates now. And, start shopping for a lender to utlize in advance so that you’re best positioned to take advantage of any positive rate action.

Start shopping for mortgage lenders here.

Matt Richardson

Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.

Source: cbsnews.com

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The conservative Heritage Foundation has rolled out a proposed blueprint for federal change that includes some drastic housing items, and some think it reveals more details of Trump campaign goals not necessarily in its official Agenda 47.

The think tank’s plan, dubbed Project 2025, overhauls and shrinks many federal agencies, while simultaneously eliminating swaths of career support staff, reprising some ideas previously floated during Trump’s first term. The foundation estimates Trump’s actions have been in line with its agenda about two-thirds of the time. Ben Carson, who headed the Department of Housing and Urban Development during Trump’s first term, contributed to the report.

These hypothetical initiatives impact all agencies that govern the financial services space, including the Department of Housing and Urban Development, the Federal Housing Administration and the Consumer Financial Protection Bureau.

Recommendations include breaking up HUD and transferring its functions to separate federal agencies, states and localities. The foundation also seeks to raise FHA’s mortgage insurance premiums, unwind the CFPB and release Fannie Mae and Freddie Mac from conservatorship, something the Trump administration took many steps toward during his first term.

Ultimately, the plan suggests overhauling many Biden-era rules and initiatives, including the PAVE task force and HUD’s Affirmatively Furthering Fair Housing rule, which was recently restored after the first Trump administration rolled it back.

Housing groups contacted for comment on Project 2025 hadn’t immediately responded at the time of this writing.

Some Democratic lawmakers are opposing the foundation’s agenda, with Rep. Jared Huffman of California saying that the increase in presidential powers and diminishing independent agencies’ could disrupt governmental checks-and-balances and be “a tool of repression.”

Here’s a detailed breakdown of recommended changes that could turn housing-related agencies upside down, some of which would require congressional action:

A “reset” for HUD/FHA/Ginnie Mae

  • One of the stark changes proposed in the section written by Carson is an overhaul of executives who run the department, limiting positions to the politically-appointed principal deputy assistant secretary, DAS and other office leadership positions.
  • HUD’s Secretary would be made a member of the Committee on Foreign Investments in the U.S., giving “broader oversight authorities to address foreign threats, particularly from China…in both rental and ownership markets of single-family and multifamily housing.”
  • HUD’s Secretary also would also be tasked with undoing “all actions taken by the Biden Administration to advance progressive ideology.” This includes climate change in addition to PAVE and the Affirmatively Furthering Fair Housing rule, which is currently pending in its final iteration with the Office of Management and Budget. 
  • The undoing of the Federal Housing Administration’s premium cut would be in line with a shift toward encouraging homeownership opportunities through “shorter-duration mortgages.” As such, FHA’s mortgage insurance premiums would be increased for all products above 20-year terms. For products below 20-year terms and refinances the MIP would be maintained.
  • FHA would also move its reverse mortgage program to its own special-risk insurance fund, an idea that was floated by Dana Wade, a former FHA Commissioner under Trump.
  • Also, Ginnie Mae “would be right-sized to serve a defined mission.” 

Government-sponsored enterprises

  • Heritage Foundation’s plan asks the Department of the Treasury to end the conservatorship of Fannie Mae and Freddie Mac and “wind both down in an orderly manner.” Tasking the department to privatize both, thereby “restoring a sustainable housing finance market with a robust private mortgage market.”

CFPB

  • The plan calls the federal watchdog an unconstitutional “highly politicized, damaging, and utterly unaccountable federal agency.”
  • It also urges for the CFPB’s “immediate dissolution,” and failing that, other measures that gut its powers.
  • Stripping the CFPB of its ability to penalize as a whole.
  • Requirements that no CFPB funds be spent on enforcement actions that are not based on rulemaking that complies with the Administrative Procedure Act.
  • Specifying the nature of “deceptive, unfair, and abusive” practices to define the scope of the CFPB mission more precisely.
  • Repealing Dodd-Frank requirements 
  • The blueprint also urges Congress to ensure that civil penalty funds are not used to recompense wronged consumers through the Treasury Department.

Federal Reserve

  • Project 2025 would limit the Federal Reserve’s ability to intervene with the mortgage-backed securities market, as well as eliminate the Fed’s interventions in corporate and municipal debt markets. The section covering changes to the Fed blames it for “increasing the amount of capital available for real estate purchases while lower interest rates on mortgage borrowing — driven down in part by the Federal Reserve’s MBS purchases — induced and enabled borrowers to take on even larger loans.”

Source: nationalmortgagenews.com

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Sideways Trend Looking Shifty

By:
Matthew Graham

Wed, Jun 26 2024, 3:53 PM

Sideways Trend Looking Shifty

Using Treasury yields as a road map, the past week and a half has been excruciatingly sideways for the bond market.  Yields haven’t been over 4.29 during domestic hours for more than a few minutes and never far under 4.21.  Of those two levels, it’s the 4.29% “ceiling” that’s seen more activity and today brought a breakout–albeit a modest one.  Yields were just under 4.32% at the 3pm close, but not for reasons that are inspiring or significant as far as the classic bond-watching playbook is concerned.  It’s not that they don’t matter, only that things like Japan’s potential currency intervention and high Australian inflation are the smallest potatoes next to things like big ticket U.S. economic reports such as this Friday’s PCE, or several of the key reports in the first 2 weeks of July.  A shift in trends in response to that data would be more of a concern.  This is just an unlucky break on a small scale for now.

    • New Home Sales
      • 619k vs 640k f’cast, 698k prev

10:08 AM

moderately weaker overnight with additional selling around 9:15am.  10yr up 4.7bps at 4.296 and MBS down an eighth.

01:03 PM

No major reaction to 5yr auction.  10yr currently up 6bps at 4.308.  MBS down 5 ticks (.16).

02:30 PM

gradual losses since 1:30pm.  Weakest levels now with MBS down 7 ticks (.22).  10yr up 6.6bps at 4.315

03:52 PM

Heading out near weakest levels with both MBS and Treasuries right in line with the last update.

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

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Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.

Mortgage rates have been trending a bit lower this month, with 30-year mortgage rates averaging around 6.58% so far in June, according to Zillow data. This is down 18 basis points from the previous month’s average.

To put this into perspective, say you want to spend less than $1,500 per month on your mortgage payment (not including taxes and insurance). To achieve this with last month’s rates, the maximum mortgage you could borrow would be around $230,000. But with this month’s average rates, you could afford to borrow about $5,000 more. As rates decrease further, borrowers’ buying power will continue to grow.

Rates are expected to ease throughout the remainder of 2024, but how much they’ll go down depends on how inflation trends in the coming months and whether labor market conditions continue to normalize. If inflation decelerates and the Federal Reserve is able to start lowering the federal funds rate, mortgage rates may trend down more substantially as we head into fall.

Current Mortgage Rates

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Current Refinance Rates

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Mortgage Calculator

Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

Mortgage Calculator

$1,161
Your estimated monthly payment

Total paid$418,177
Principal paid$275,520
Interest paid$42,657
  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

30-year Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.87% last week, according to Freddie Mac. This is an eight-basis-point decrease from the previous week.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates. 

15-year Fixed Mortgage Rates

Last week, average 15-year mortgage rates were 6.13%, a four-basis-point decrease from the previous week, according to Freddie Mac data.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

When Will Mortgage Rates Go Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Rates also increased dramatically last year, though they trended back down toward the end of 2023.

As inflation comes down, mortgage rates will recede as well. Most major forecasts expect rates to go down later in 2024.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve increased the federal funds rate a lot last year to try to slow economic growth and get inflation under control. Inflation has come down a lot in response to this, though it’s still a little bit above the Fed’s target rate of 2%.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

Fed hikes have pushed mortgage rates up over the last two years. But the Fed has indicated that it’s likely done hiking rates and could start cutting in 2024. Once the Fed cuts rates, mortgage rates should fall even further.

Molly Grace

Mortgage Reporter

Source: businessinsider.com

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(Bloomberg) — The biggest long-duration bond ETF raked in record cash this week as a cohort of investors recalibrate bets on when the Federal Reserve will cut interest rates this year.

BlackRock Inc.’s $54 billion iShares 20+ Year Treasury Bond ETF (ticker TLT) attracted a $2.7 billion inflow on Monday, its biggest one-day haul since its 2002 inception. That brings its tally to roughly $4.4 billion for the year so far, despite racking up a nearly 3% loss.

It comes as investors begin to reshuffle their portfolios at the mid-year mark, while traders earlier this week embraced bets on 3 percentage points of cuts over the next nine months as economic growth cools.

“It looks like investors are starting to fight the Fed again,” said Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. “They’re betting on a Fed cut — you’d get a wicked price move if you’re right,” he said, adding that mid-year portfolio rebalancing also could have played a role.

Longer-dated bonds may gain as investors prepare for the central bank to cut interest rates, with many looking to havens should the economy slow down. An index tracking Treasuries on a total-return basis has gained about 1.7% so far in June, on track for its best monthly performance in 2024, and all but erased its losses for the year.

Fed officials recently forecast that they’d be reducing rates 25 basis points by the end of this year — and a total of 125 basis points by end-2025. The interest rate swap market has priced in deeper cuts, penciling in 165 basis points of easing by the end of next year.

–With assistance from Isabelle Lee.

More stories like this are available on bloomberg.com

Source: nationalmortgagenews.com

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Borrower Outreach, Subservicer Oversight, AVM Products; Agency News… Freddie’s Limited Foray Into 2nds

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Borrower Outreach, Subservicer Oversight, AVM Products; Agency News… Freddie’s Limited Foray Into 2nds

By:
Rob Chrisman

Wed, Jun 26 2024, 11:25 AM

“Don’t waste a good crisis.” Continuing data breaches constitute a crisis, the latest example being LendingTree Inc., cloud-based data analytics firm Snowflake Inc., and MBS loan-level data. Headlines that talk about a “crisis” or something “plummeting” in price should be viewed skeptically, regardless of the topic. Here’s “Home Prices are Falling Fast.” Really? I say, much ado about nothing. Dropping 1-2 percent… really… plummeting? Are people jumping out of windows? How about looking at those markets like Austin over the last 10 years: Most were bound to take a breather after getting ahead of themselves. There is something that has garnered a lot of headlines in recent weeks, and that is the FHFA authorizing a pilot program for Freddie Mac to buy as much as $2.5 billion in second mortgages over 18 months, a shift that could ultimately make it cheaper for households to borrow against the equity in their homes. There are those, however, who say that this is much ado about nothing: more below. Today’s podcast is found here and this week’s is sponsored by Candor. Candor’s authentic Expert System AI has powered more than 2 million flawless, hands off underwrites. Every credit risk decision Candor makes is backed by a warranty, eliminating repurchase worries. Hear an interview with Blue Sage’s Carmine Cacciavillani on his nearly four decades in the mortgage industry as a solutions provider creating complex software-based business solutions.

Software, Products, and Services for Lenders and Brokers

When generating non-QM loans, traditional marketing efforts simply don’t cut it anymore. A 3 percent click-through rate on your email campaigns might be the norm, but it won’t give your salespeople the necessary conversations. Privy offers something different, something better. A branded real estate search and investing platform. Privy lets lenders automate borrower acquisition and retention. You become present at every step of a borrower’s transaction, from when they are just browsing to when they are ready to close. You are just a button click away. Provide your existing borrowers with the technology to close more investment deals while you close more loans. Contact Brad Bieber to learn more about Privy’s Lender Enterprise Solutions.

Despite some positivity in the housing market, pressure persists among mortgage lenders. The Mortgage Bankers Association forecasts single-family mortgage originations to grow to $1.8T in 2024, driven by increased purchase demand and equity take-out products, while Goldman Sachs predicts a 16 percent increase in the non-agency market amidst a 1 percent decline in agency mortgage production. Given this, Verus Mortgage Capital, the leading non-agency investor, believes there is no better time for lenders to expand their footprints and offer non-QM mortgages. Check out the five key insights Verus shares about non-agency lending in its recent blog post here. And to learn more about the non-QM opportunity, contact Jeff Schaefer, EVP – National Sales (202-534-1821).

Ask yourself this question: when evaluating the current market value of a subject property, are you using the best AVM on the market? We understand that when making critical business decisions, accuracy and details matter. That’s why we’re highlighting First American Data& Analytics and its Procision AVM to have your back. Its Procision AVM updates and tests the subject property values daily to maintain performance on every residential property in the U.S. every day. And the best part? First American’s AVM is designed for your specific business need – so you get the best results and highest satisfaction. But don’t just take our word for it: The data speaks for itself. As a nationwide, single-source data provider, First American Data & Analytics will fuel your biggest ideas so you can focus on growing your bottom line. That’s big stuff. Learn more about the Procision AVM.

The “housing theory of everything” is a concept equating the housing shortage in the United States to a broad range of societal problems like substance abuse, unemployment, domestic violence and disease. The idea is that when people live in safe, affordable housing they are more secure, less stressed and more employable. Those steady incomes and stable minds would, in turn, positively impact families and communities. In the latest Spotlight podcast from Dark Matter Technologies, Kyla Scanlon, who coined the term vibecession (when people have a more negative perception of the economy than what economic data suggests) and author of “In This Economy? How Money and Markets Really Work” joins Wes Hortabuck for a wide-ranging discussion of consumer perceptions, the “missing middle” in housing stock, and how providing more affordable housing could positively impact people’s lives and the broader economy. Take a few minutes and listen to the episode today!

“Is a standing call with your servicer enough when it comes to proper oversight? Is there a specified cadence for how often a lender should be meeting with their servicer? Ultimately, it is your responsibility to oversee your subservicer, so you must understand what is expected of you and the key actions you need to take to maintain oversight and comply with regulations. Tune in to this video where the experts at Richey May answer the most frequently asked questions about subservicer oversight requirements. Whether you’re considering leveraging a subservicer or navigating the general complexities of oversight, Richey May’s mortgage compliance experts can help. Contact us today for more information.”

“In today’s competitive purchase market, the lenders who stand out are providing excellent, personalized and consistent communication. This approach is key to attracting new business, keeping your current borrowers happy and retaining clients for life. In our new blog, we’re sharing how ICE Surefire can help you streamline and improve your borrower outreach even further, so you’re prepared to thrive in today’s competitive purchase market. And by leveraging both Surefire and Encompass®, you’re able to deliver targeted content to the right contacts at the right moment. Read the full blog to gain all the insights.”

Agency News: Freddie Mac’s New Program?

The Federal Housing Finance Agency (FHFA) announced its conditional approval for Freddie Mac to engage in a limited pilot to purchase certain single-family closed-end second mortgages. This conditional approval follows FHFA’s first publication of a proposed new product by either Freddie Mac or Fannie Mae (the Enterprises) for public comment under the new process mandated by the Prior Approval for Enterprise Products regulation, which became effective in April 2023. In an accompanying statement, Director Sandra Thompson further discussed FHFA’s analysis of the statutorily required criteria of Charter Act compliance, public interest, and safety and soundness. Upon the pilot’s conclusion, FHFA will analyze the data on Freddie Mac’s purchases of second mortgages to determine whether the objectives of the pilot were met. FHFA has determined that any increase to the volume or extension of the duration of the pilot, or a conversion of the pilot to a programmatic activity, would be treated as a new product that is subject to public notice and comment and FHFA approval. Any subsequent approval would be informed by the preliminary results of the pilot.

Seth Appleton, President of U.S. Mortgage Insurers (USMI), issued a statement on the Federal Housing Finance Agency’s (FHFA) decision to conditionally approve the proposed “Freddie Mac Single-Family Closed-End Second Mortgages” product as a limited pilot, pursuant to the Prior Approval for Enterprise Products Final Rule. In its comment letter, USMI raised certain aspects in urging FHFA to disapprove this proposed product and have Freddie Mac focus its efforts and resources on helping borrowers achieve homeownership.

In a press statement, MBA President and CEO Bob Broeksmit, CMB, responded to FHFA’s conditional approval of new product proposal allowing Freddie Mac to purchase certain closed-end second mortgages.

Compass Research and Trading was quick to point out that, “The FHFA would not have published the new product proposal for FMCC’s HEL product if it was not predisposed to approve it. Over 85 percent of the comment letters opposed the proposal, which included over 250 form letters in opposition. However, it did receive support from the National Fair Housing Alliance, Urban Institute, Community Home Lenders of America, and three credit union associations. Bank trade associations largely opposed the product, as did market trade associations.

Ed Groshans wrote, “We estimated that the potential tappable equity in Freddie’s portfolio to be $700 billion to $1.2 trillion. The FHFA addressed crowding out concerns by authorizing a pilot program for Freddie and limiting its HEL purchases to $2.5 billion. Our assessment is that the pilot program will have a negligible impact on consumer lenders. In addition, the FHFA capped the duration of the pilot at 18 months.

“Notably, the FHFA stated that any extension of the pilot or a conversion of the pilot to a programmatic activity would subject to another new product approval review. These limitations place the fate of any GSE HEL products in the outcome of the November election. We expect a Trump administration to cease the product on safety and soundness concerns, while a Biden administration could approve a larger scale product.”

The FHFA Director’s statement noted that the product is authorized by Freddie’s charter, in the public interest, and consistent with the safety and soundness of Freddie Mac or the mortgage finance system. The public interest section addressed crowding out. Sandra Thompson said that limitation on purchases and duration were in response to comments received and “intended to mitigate any concerns about potential inflationary impacts, extending the mortgage “lock-in” effect, or the “crowding out” of private capital.”

Switching gears to other updates…

Uniform Loan Delivery Dataset (ULDD) Phase 4a is implemented and the Phase 5 transition (optional delivery) has begun. Freddie Mac continues to enhance Loan Selling Advisor®. Sharing information about the customer test environment (CTE) for ULDD, plus additional news to help clients: Freddie Mac’s website.

Freddie Mac posted information on the new and updated UAD Redesign Documentation. The Uniform Appraisal Dataset (UAD) and Forms Redesign team has announced the release of additional documentation and updated one existing document to support ongoing implementation efforts. Fannie Mae’s Uniform Appraisal Dataset (UAD) and Forms Redesign team has released additional documentation and updated one existing document to support ongoing implementation efforts. These resources supplement prior documentation originally published in 2023 and subsequent releases throughout 2023 and 2024.

The publication of VantageScore® 4.0 historical credit scores is coming on July 10. For more information and to register for the session, visit Fannie Mae’s credit score models and reports initiative page.

Fannie Mae has approved the acquisition of Republic Mortgage Insurance Company and Republic Mortgage Insurance Company of North Carolina and its affiliates (RMIC) by Arch U.S. MI Holdings, Inc., a subsidiary of Arch Capital Group Ltd. RMIC is now an affiliate of our approved mortgage insurers Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company.

In the July Loan Product Advisor® (LPASM) release, Freddie Mac describes implementation of revised feedback messages related to the annual transition of LPA specification versions. Also included are reminders about collateral representation and warranty relief feedback messages and trended data.

As explained in Fannie Mae Release Notes, The Desktop Underwriter® (DU®) validation service will be updated the weekend of August 17 with enhancements intended to improve asset validation. Updates include asset validation up to the total balance of liquid accounts, consideration of net equity, evaluating assets when reported assets are not sufficient to cover closing costs, and more. View the integration impact memo for additional information.

At the Mortgage Industry Standards Maintenance Organization® (MISMO®) Summit, Fannie Mae shared significant progress on developing the Loan Boarding Data component of the Industry Transfer of Servicing Dataset. Help finalize both datasets by participating in the MISMO Servicing Transfers Development Workgroup.

Beginning July 1, all servicers can access the Liquidation Reconciliation Third Party Sales (TPS) application within Property 360™, which provides a simplified process for managing TPS cases from initial case creation to sale reconciliation. Servicers must onboard the application by no later than August 31. Details are available in the Fannie Mae release notes.

FHFA issued a Request for Input (RFI) on opportunities to improve the Federal Home Loan Banks’ (FHLBanks) processes for members and project sponsors to apply for Affordable Housing Program (AHP) funding. During FHFA’s FHLBank System at 100: Focusing on the Future review, many stakeholders encouraged FHFA to improve the efficiency of the application process. FHFA is seeking input on potential opportunities to improve the application process for the AHP competitive application programs. Each FHLBank develops user or reference guides and resources to assist FHLBank members and project sponsors apply for AHP competitive application funding. FHFA is providing these resources to assist stakeholders in providing feedback on the FHLBanks’ AHP competitive applications.

FHFA released its first quarter 2024 Foreclosure Prevention and Refinance Report. Fannie Mae and Freddie Mac (the Enterprises) completed 52,154 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to nearly 7 million since the start of conservatorships in September 2008. FHFA’s quarterly foreclosure prevention and refinance reports include data on the Enterprises’ mortgage performance, delinquencies, and active forbearance plans, as well as forfeiture actions and refinances by state. The data included in these reports are also available on FHFA’s website as an interactive Borrower Assistance Map.

Capital Markets

There were a few miscellaneous data points yesterday, none of which did much to change the overarching narrative that the U.S. economy is beginning to slow, and none of which had much effect on bond movement. Consumer Confidence edged modestly lower in June, demonstrating a hesitant, but not overly concerned, consumer. On the housing front, the FHFA Housing Price Index was up 0.2 percent month-over-month in April after increasing 0.1 percent in March, while the S&P Case-Shiller Home Price Index was up 7.2 percent year-over-year in April, slightly more than expected. Home prices continue to rise despite 30-year mortgage rates hovering around 7 percent as people are becoming used to rates at these levels.

Security pricing is largely a matter of supply and demand, and the U.S. Treasury kicked off this week’s quarterly refunding note auction slate with a solid sale of $69 billion in 2-year notes.

Mortgage applications from MBA kicked off today’s calendar, increasing 0.8 percent from one week earlier. This week’s results include an adjustment for the Juneteenth holiday. We learned last week that the Mortgage Bankers Association’s refinance index surged 28 percent in the latest release and is now at its highest level since the fall of 2022. This is a good sign that new mortgages are slowly replacing the record-low lending rates from the beginning of the pandemic. One year ago, 30-year conventional and Ginnie Mae mortgage bonds with 1.5 percent through 2.5 percent coupons made up 42 percent of the U.S. MBS index, but that figure has now dropped to 37.3 percent. Still, most mortgages remain out of the money, most by over 300 basis points.

Later today brings New Home Sales for May and several Treasury auctions that will be headlined by $28 billion reopened 2-year FRNs and $70 billion 5-year notes. We begin Hump Day with Agency MBS prices slightly worse than Tuesday’s close, the 10-year yielding 4.29 after closing yesterday at 4.24 percent, and the 2-year at 4.73.

Jobs

JMAC Lending is pleased to announce the addition of mortgage-industry leader Sabrina Lopez as Regional Vice President – TPO West. Sabrina brings more than 20 years of strategic leadership experience to JMAC. In her role, Sabrina will grow and scale a team of Sr. Account Executives throughout the company’s western region. “We want to empower our AEs to grow their business in this market,” JMAC’s President Christina Pham said. “Sabrina has a demonstrated record of success helping Account Executives become top producers in their markets. Her seasoned mortgage background, industry knowledge and relationship-driven mindset will be an essential component to JMAC’s continued growth and strategy. With Eric Yang as EVP of TPO and Bob Bordenet as Regional Vice President – TPO East, we are stronger than ever and well-positioned to take our team and business to the next level.” Elevate your lending capabilities this summer with your single source for solutions. Visit here and follow JMAC on LinkedIn, and contact Sabrina Lopez direct for Account Executive opportunities.

“Highlands Residential Mortgage is proud to announce that we have been ranked #1 by Experience.com for 2023 in their annual Top Performers in the Mortgage Industry rankings! This accolade is especially meaningful to us as it reflects the outstanding experiences and overall satisfaction of our customers and business colleagues. Brian Bennett, President of Highlands, shared, “While every award is a source of pride for us, being recognized in the #1 spot for 2023 is an incredible achievement for the Highlands team. It underscores how deeply our customers trust us and is truly a testament to our outstanding people that go above and beyond every day to provide a world class home financing experience. We are genuinely grateful for the recognition and will continue to serve all of our communities across the country at the highest level.” To learn more about the Highlands experience, reach out to Corey Caster, EVP-Chief Production Officer.”

Xactus announced today that Joseph Peterson has been named Chief Financial Officer.

(Remember: employers can view posted resumes for several months for a nominal charge and job seekers can post their resumes for free on www.lendernews.com.)

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Source: mortgagenewsdaily.com

Apache is functioning normally

The current average interest rate for a fixed-rate, 30-year conforming mortgage loan in the United States is 6.853%, according to the most recent data available from mortgage technology and data company Optimal Blue. Read on to see average rates for different types of mortgages and how the current rates compare with the last reported day prior. 

Type of Mortgage Current Rate Rate Last Reported
30-year conforming 6.853% 6.848%
30-year jumbo 7.129% 7.198%
30-year FHA 6.679% 6.680%
30-year VA 6.514% 6.393%
30-year USDA 6.760% 6.816%
15-year conforming 6.158% 6.229%
30-year conforming
6.853%
6.848%
30-year jumbo
7.129%
7.198%
30-year FHA
6.679%
6.680%
30-year VA
6.514%
6.393%
30-year USDA
6.760%
6.816%
15-year conforming
6.158%
6.229%

30-year mortgage rates

30-year conforming

The average interest rate, per the most current data available as of this writing, is 6.853%. That’s up from 6.848% the last reported day prior. 

30-year jumbo

What exactly is a “jumbo mortgage” or “jumbo loan”? Simply put, it exceeds the maximum amount for a normal (conforming) mortgage. Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency set this maximum.

The average jumbo mortgage rate, per the most current data available as of this writing, is 7.129%. That’s down from 7.198% the last reported day prior. 

30-year FHA

The Federal Housing Administration provides mortgage insurance to certain lenders, and the lenders in turn can offer the consumer a better deal on aspects such as being able to qualify for a mortgage, potentially making a smaller down payment, and possibly getting a lower rate. 

The average FHA mortgage rate, per the most current data available as of this writing, is 6.679%. That’s down from 6.680% the last reported day prior. 

30-year VA

A VA home loan is offered by a private lender, but the Department of Veterans Affairs guarantees part of it (reducing risk for the lender). They are accessible if you’re a U.S. military servicemember, a veteran, or an eligible surviving spouse. Such loans may sometimes allow the purchase of a house with no down payment at all. 

The average VA home loan rate, per the most current data available as of this writing, is 6.514%. That’s up from 6.393% the last reported day prior. 

30-year USDA

The U.S. Department of Agriculture operates programs to help low-income applicants achieve homeownership. Such loans can help U.S. citizens and eligible noncitizens purchase a home with no down payment. Note that there are stringent requirements to be able to qualify for a USDA home loan, such as income limits and the home being in an eligible rural area.

The average USDA home loan rate, per the most current data available as of this writing, is 6.760%. That’s down from 6.816% the last reported day prior. 

15-year mortgage rates

A 15-year mortgage will typically mean higher monthly payments but less interest paid over the life of the loan. The average rate for a 15-year conforming mortgage, per the most current data available as of this writing, is 6.158%. That’s down from 6.229% the last reported day prior.  

Why do mortgage rates fluctuate?

While your personal credit profile significantly influences the mortgage rate you’re offered, various external factors also play a role. Key influences include:

  • Federal Reserve actions: When the Federal Reserve adjusts the federal funds rate, lenders typically follow suit by raising or lowering the interest rates on their financial products. Essentially, the Fed uses this tool to control the money supply, making it easier or harder for consumers and businesses to borrow.
  • Inflation levels: You might wonder if inflation and the Fed’s actions in responding to it are essentially the same factor, but they’re not. The Fed manipulates rates to manage inflation, but lenders also respond independently. For instance, they might hike rates to maintain profitability when inflation is high.
  • Economic conditions: Lenders consider things like overall economic growth as well as housing supply and demand when determining mortgage rates. These are just a few examples of the factors that can influence lenders to make rate adjustments.

Learn more: How are mortgage interest rates set by lenders?

Which type of mortgage should you choose?

There’s no universal answer as to which is the best type of mortgage. Most mortgages are conventional, but government-backed loans can be more affordable if you qualify.

Meanwhile, jumbo mortgages are suitable for purchasing more expensive homes that exceed the limits of conforming mortgages, though they may cost more over the loan’s duration.

Adjustable-rate mortgages (ARMs) generally start with low, attractive rates that later increase. If you’re considering this option, make sure you’re comfortable with that possibility. 

The rates in this article reflect averages for fixed-rate mortgages.

If you’re uncomfortable shopping for rates independently, a mortgage broker can help (for a fee) find the best mortgage deal for your situation.

How high have mortgage rates been in the past?

While mortgage rates may feel sky-high these days compared to the sub-3% rates some homebuyers scored in 2020 and 2021, what we’re seeing currently isn’t that strange when compared with historical data on mortgage rate averages. Below are a couple charts from the Federal Reserve Economic Data (FRED for short) online database for context.  

30-year fixed-rate mortgage historical trends

If you think rates between 6% and 8% today are scary, consider September through November of 1981, which saw the average rate hovering between 18% and 19%, according to FRED.

Check out the FRED 30-year mortgage rate chart:

15-year fixed-rate mortgage historical trends

Rates today on 15-year mortgages, as shown in the Optimal Blue data above, are roughly on par or even slightly lower than what we see during many previous periods. For example, take a look at FRED data for the end of 1994 and beginning of 1995, when rates neared 9%.

See the FRED 15-year mortgage rate chart:

Frequently asked questions

What’s a good mortgage rate?

With current market conditions, those with good to excellent credit can expect interest rates between 6% and 8%. If your credit score is in the low 600s, rates above 8% might be more likely.

Remember, credit score is just one of several factors affecting your mortgage rate, including your down payment amount, state of residence, and loan term length.

Learn more: Easy ways to check your credit score.

What is a mortgage rate lock?

Given the potential for daily rate fluctuations, a mortgage rate lock (or lock-in) can secure a favorable rate for you. These locks typically last 30, 45, or 60 days, with options to extend if necessary.

However, rate locks have potential drawbacks. If rates drop, you could miss out on an even better rate. Additionally, if your initial lock period is insufficient, extending it could be costly.

Finally, rate locks don’t absolutely guarantee your rate. Changes in your credit score or unexpected appraisal values can still alter your mortgage rate.

What’s an APR vs. an interest rate?

The interest rate is a pretty self-explanatory part of borrowing, while the APR (annual percentage rate) includes any additional fees, making it higher. Although they’re distinct for mortgages, the terms are often used interchangeably for credit card rates.

Source: fortune.com