Point

Apache is functioning normally

If you’re thinking about buying a home, or refinancing an existing home loan, mortgage rates are likely top of mind.

As you may or may not know, mortgage rates can change daily based on market conditions, similar to the stock market.

This means they can be higher one day and lower the next. Or they may do next to nothing at all from day to day, or even week to week.

But having an idea of which direction they’re going can be helpful, especially if you’re actively shopping your rate.

Let’s discuss a simple way to track mortgage rates using readily available economic data.

You Can Track Mortgage Rates Using the 10-Year Bond Yield

  • Simply look up the 10-year bond yield on your favorite finance website
  • Check the direction it’s going (like you would a stock ticker)
  • If it’s up then mortgage rates will likely be higher than yesterday
  • If it’s down then mortgage rates will likely be lower than yesterday

Hands down, the simplest way to track mortgage rates is the 10-year treasury bond yield.

Over time, mortgage rates and the 10-year yield have moved in near lockstep, as seen in the graph above from FRED.

In other words, when 10-year yields fall, so do mortgage rates. And when yields rise, mortgage rates climb higher.

As for why, many 30-year fixed mortgages are paid off in about a decade. This means the duration is similar to a 10-year bond.

But because mortgages have prepayment risk, there is a “spread,” or premium that is paid to investors of associated mortgage-backed securities (MBS), which are also bonds.

This spread is the difference between the going 30-year fixed mortgage rate and the 10-year yield.

For a long time, it hovered around 170 basis points. This meant if a 10-year bond was yielding 3.00%, a 30-year fixed mortgage might be priced around 4.70%. Or perhaps 4.75%.

So in order to track mortgage rates, you simply had to look up the 10-year yield and add this spread. Then you’d have a ballpark price for mortgage rates.

Mortgage Rate Spreads Have Widened, But the 10-Year Bond Yield Is Still Relevant for Tracking the Direction of Rates

Recently, mortgage rate spreads widened considerably due to economic uncertainty, heightened prepayment risk, out-of-control inflation, and other factors.

At one point, the spread was more than 300 basis points, or roughly double the norm, as seen in the chart above. This made tracking a bit more difficult, but the direction of yields and rates was still relevant.

So even though the spreads were wider, if the 10-year yield went up on a given day, mortgage rates likely increased as well. Or vice versa.

This means you can still look up the 10-year bond yield and determine which way mortgage rates will go that day.

If yields are up, mortgage rates will likely be up too. If yields are down, there’s a good chance mortgage rates will be down also.

The same goes for magnitude of change. If yields plummet, mortgage rates should also improve a lot. But if yields surge higher, watch out for much higher rates.

Now back to those wide spreads. Over the past 18 months or so, the Fed has been battling inflation with 11 rate hikes via their own federal funds rate.

But now that the Fed has indicated that their next move could be a rate cut, and that inflation may have peaked, there’s a lot more calm in the markets.

As such, spreads have come back down to around 270 basis points. While still ~100 bps higher than normal, it’s moderating.

And again, we can still guess direction regardless of the spread being wider than usual.

MBS Prices Are Even More Accurate Than 10-Year Bond Yields When Tracking Mortgage Rates

A mortgage rate purist will tell you that the 10-year bond is a great benchmark to track mortgage rates. But that looking at actual MBS prices is better.

This is true because MBS prices directly impact mortgage rate movement. So if MBS prices fall on a given day, mortgage rates will rise.

Remember, when the price of a mortgage bond falls, due to less demand, its yield, aka interest rate, increases.

As such, if you want mortgage rates to go down, you’ll be rooting for MBS prices to increase. And they’ll increase if demand is strong, thereby pushing yields down.

Now the question is how do you go about tracking MBS prices?

While you can track the 10-year bond yield on Yahoo Finance (as seen above), Google Finance, Marketwatch, CNBC, you name it, MBS price data isn’t as readily available.

However, Mortgage News Daily does a good job of posting daily MBS prices on its website.

They list both UMBS for Fannie Mae and Freddie Mac (conforming mortgages) and Ginnie Mae (GNMA) MBS for FHA loans and VA loans.

If you’re curious if mortgage rates are up or down on a given day, head over there and look at MBS prices.

Remember, if MBS prices are down, mortgage rates will be higher. And if MBS prices are up, mortgage rates will be lower.

To sum things up, tracking mortgage rates isn’t too difficult. Simply look up the 10-year yield each morning and also check out MBS prices.

From there you’ll have a pretty good idea of whether they’re going to be higher or lower than the previous day.

Now when it comes to predicting them, that’s another story altogether…

Read more: 2024 Mortgage Rate Predictions

(Photo: fdecomite)

Source: thetruthaboutmortgage.com

Apache is functioning normally

L. Scott Bruggemann, senior vice president and general counsel at Summit, wrote in an emailed response to HousingWire that, at this time, the company “does not have anything to add to its prior comments.” 

In response to the first lawsuit filed by Movement in November, Bruggemann wrote that the company continues to compete for talented individuals “fairly” and according to “legal and regulatory requirements.”

Scrima did not immediately respond to a request for comments. 

Movement’s attorney Ari Karen, partner at Mitchell Sandler, said in a call with HousingWire that the lawsuit was filed separately from the first in North Carolina in November due to Scrima’s location in California. Scrima, according to him, orchestrated a “premeditated theft of information” scheme.

“Things do happen in the recruiting process. There are a lot of balls in the air; people can make mistakes, and some are innocent, some are not. But I think what distinguishes this case is the outright orchestration, the level of intent,” Karen said. “They literally went out and said: ‘We’re going to go steal Movement’s staff and their secrets. I rarely see that level of premeditation.”

According to Karen, about 50 employees left Movement to join Summit – and it’s unclear at this point whether Summit is still using the information it allegedly stole, he said.

Founded in 2008, Movement says it has over 4,500 employees across 775 locations in all 50 states. The company claims Summit, founded in 1995 by Scrima, “had fewer than 200 loan officers until Scrima engaged in a desperate and unlawful scheme to copy Movement’s successful business model.” 

Specifically, Movement accuses Scrima of initiating a corporate raid of Movement’s employees using the company’s former high-level managers. It included stealing trade secrets and computer systems. 

The lawsuit names nine of Movement’s former employees who allegedly transitioned to Summit as part of the scheme and had confidentiality and non-solicitation agreements. Scrima, according to the lawsuit, knew about these agreements. 

The document brings an alleged text message sent on May 24 at 1:08 p.m. by Scrima to a group of executives at Summit saying he had a “great call” with Deran “working on the first 90-day plan” and providing a contact of a Movement employee. 

After that, the lawsuit states the Movement employee mentioned by Scrima began accessing the company’s database, which contains “highly proprietary information regarding its financials, employees, compensation, borrowers and loan products.”

The company claims the data was later shared with Summit executives, and the employee transitioned from Movement to Summit. 

On another occasion, the lawsuit states that Scrima texted Summit’s chief growth officer, Brian Mitchell, asking for Movement’s profit and loss information (P&L). In response, Mitchell asked if Scrima was sure he wanted Movement’s “proprietary/confidential information on Summit servers.” 

Scrima replied, “Not on our servers. Can you maybe set up misc WhatsApp account and have them texted there?” According to the lawsuit, Scrima got the information and told executives to “dissect” them. 

Per the lawsuit, Mitchell was fired from Summit in November after bringing his complaints about these actions to the company’s legal counsel. In a call with Movement representatives that he agreed to record, Mitchell said Summit had data on Movement’s employees and their wages and some 9,000 borrowers’ information. A transcript of the call is attached to the lawsuit.

“At all times, Scrima knew that his conduct was wrongful. Indeed, the mere fact that he instructed staff to hide Movement files through a WhatsApp account rather than maintain them on Summit’s servers speaks to the conscious nature of his activities,” the lawsuit states. 

Movement also accuses Scrima of creating a scheme to divert its customers to Summit through its “resigning loan officers.” 

The lawsuit cites an email from an LO sent in October to a borrower asking to hold off on locking and wait to close the loan with a “sister company” when rates drop. He indicated the name of a Summit employee for the new loan application. The LO who sent the email later resigned to join Summit, the lawsuit states.  

“Scrima established a supposed Portfolio Retention Department at his company to facilitate this transfer of information” of potential borrowers from one company to another, according to the lawsuit. 

Movement requests the court $5 million in actual damages and not less than $25 million in punitive damages, among other things. It demands a jury trial. 

Source: housingwire.com

Apache is functioning normally

It’s hard to believe that Americans ever got by without plastic, but the credit card is less than 75 years old. There’s a good chance your grandparents could tell you about life in the days of nothing but cash or checks.

Today, about 84% of Americans have at least one credit card, which allows them to quickly and conveniently tap or swipe their way towards purchases. Unfortunately, those rectangles of plastic may make spending a little too easy: The average household has almost $8,000 in this kind of debt.

Here, you’ll learn just how the credit card came into being, as well as smart ways to manage your credit card usage more effectively.

The Origins of Credit

Here’s how the story of the first credit card goes: Businessman Frank McNamara was having dinner at a New York City restaurant in 1949 when he realized he forgot his wallet. Rather than dine and dash, he came clean and asked if he could sign for the meal and pay later.

Though some say this legendary dinner never happened, everyone agrees McNamara founded Diners Club, the world’s first multipurpose charge card, in 1950. McNamara sold Diners Club memberships to friends and acquaintances willing to pay $3 for the “sign now, pay later” privilege at participating restaurants and hotels.

Until that point, only individual stores extended credit to customers. If you couldn’t pay for, say, a dress or a new suit at the general store — and the owner knew you were good for the money — you could run up a tab and pay cash later. But the Diners Club card provided the benefit of credit at multiple locations instead of just one establishment.
💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Next Came the “Big Four” of Credit Cards

Of course, future entrepreneurs and banks wouldn’t let Diners Club monopolize the charge and credit market for long. Eventually, other cards came on the scene—most notably Visa, Mastercard, American Express, and Discover.

•   Visa: In 1958, Bank of America issued the BankAmericard — the first true credit card — to customers in California. While the original Diners Club card required payment in full at the end of each month, BankAmericard users could pay off purchases over time. In 1976, BankAmericard became Visa.

•   Mastercard: BankAmericard got a run for its money when a group of banks joined forces in 1966 to create the Interbank Card Association (ICA). In 1969, ICA created Master Charge: The Interbank Card, which became Mastercard in 1979.

•   American Express: The American Express Company has been around since 1850, but it didn’t issue its first charge card until 1958. Like Diners Club, the American Express card had to be paid in full each month. That changed in 1987 with the introduction of the Optima card, the first true credit card by American Express. (Fun fact: Elvis Presley was one of the earliest American Express card members.)

•   Discover: Discover is the newest major credit card network on the scene. Sears launched the Discover card in 1986, distinguishing it from the pack by charging no annual fees and offering higher credit limits than other cards at the time.

Discover was also the innovator of cash rewards on credit card purchases—back in 1986. At that time, Discover cardholders could earn rewards of up to 1% cash back on all purchases. Incidentally, Discover Financial Services purchased Diners Club International in 2008.

How Credit Cards Have Changed Over Time

A lot has changed since McNamara’s legendary dinner. Take a look at some of the biggest shifts in the credit industry:

The Ubiquity of Credit

In the early decades, credit was curbed by restrictive interstate banking laws. But credit’s big breakthrough came in 1978, when the Supreme Court ruled to allow nationally chartered banks to charge out-of-state customers the interest rate set in the bank’s home state.

Credit expanded as a result, and today, the average American credit card holder has nearly four cards.

The Evolution of Fees

When Diners Club began, it made money by charging stores a 7% fee on all transactions. Today, credit card companies charge interest on debt, too, so they make money when you don’t pay your bill in full. This is what’s typically known as high-interest debt. How high? At the end of 2023, the average credit card interest rate was reported as 24.59%.

Also, Diners Club used to charge nominal membership fees, but by the 1980s, many credit card companies eliminated annual fees to stay competitive.

The Advent of Rewards

The ’80s also brought tangible rewards for using credit cards instead of cash. Discover pioneered cash rewards, allowing cardholders to get a percentage back on purchases charged. And in 1987, Citibank made a deal with American Airlines to give consumers reward points to use for future flights.

Today, consumers continue to use credit card rewards programs to earn cash or points for future purchases, including travel. In fact, more than 87% of credit card users have rewards programs associated with their cards.

How to Control Your Credit

Credit can be convenient and a real asset when you want to buy something you don’t have enough cash to pay for outright. It’s a powerful tool, and one that must be managed wisely. In the summer of 2023, credit card balances in America hit a new milestone, topping a total of $1 trillion. That likely means many people are carrying a significant amount of debt. To avoid having your balances soar too high, consider these ways to take control of your credit.

Build Your Credit History Wisely

It might sound enticing to pay for everything in cash (and thus stay out of debt), but most of us don’t have the cash flow to pay for college, buy a car, and purchase a home outright. Besides, even if you do have the cash to buy everything you need right now, when the day comes to apply for a loan, you’ll need a solid credit history to qualify.

If you’ve never had a single credit card or loan, your credit history is minimal, which means you pose a higher risk to lenders. In that way it pays to borrow, as long as you do so responsibly. That means spending less than you earn and paying your bills on time, every time. Whenever possible, pay off your credit card in full every month.

Consider Prefinancing

Of course, credit cards aren’t the only way to pay for purchases and build a strong debt payment history. Prefinancing (getting access to a sum of money in advance of a purchase), such as taking out a personal loan, is another option. When you apply for a loan, you’re requesting a specific amount of money from a lender and agreeing to repay that loan over a predetermined period of time.

How credit cards work is a different process. When you pay on credit, the credit card network (e.g., Visa) pays the merchant (e.g., Home Depot) for your purchases, and you pay the network back for your purchases each month. If you don’t pay your balance in full, you’ll be charged interest on future payments.

Between the two options, prefinancing may offer the benefit of lower interest rates and shorter loan terms, helping you get out of debt quicker. After all, if you don’t have a system in place to pay off purchases in a reasonable time frame, credit card debt can haunt you for a long time.

Think about it: If you’ve racked up $15,000 in credit card debt at an interest rate of 20%, and make a payment of $300 each month, it will take you 109 months (9+ years) to pay off your debt, including $17,635.48 in interest, by the way. (You can use a credit card interest calculator to see how your own debt stacks up.)

Understand Your Credit Score

Whenever you borrow money via a personal loan or use your credit card, your lenders and creditors send details of those transactions to three major national credit bureaus (Equifax®, Experian®, and TransUnion®). That information is then used to assess your creditworthiness, which is expressed as a three-digit credit score that represents the risk you pose to lenders.

The higher your credit score, the less risky you are in their eyes. FICO® scores are the ones used most often in lending decisions in the United States, with scores typically ranging from 300 (poor) to 850 (exceptional).

Your credit score comprises five categories, and each one has an impact:

•   Payment history: Late or missed payments drag down your score.

•   Amounts owed: High balances can hurt you; maxing out your credit cards is even more damaging.

•   Length of credit history: A long history can increase your score.

•   Credit mix in use: A healthy mix of credit cards, student loans, a mortgage loan, etc., can boost your score.

•   New credit: Opening several credit accounts in a short period of time can damage your score.

💡 Quick Tip: Swap high-interest debt for a lower-interest loan, and save money on your monthly payments. Find out why SoFi credit card consolidation loans are so popular.

Build Your Credit Score

If your credit score isn’t where you want it to be, there’s good news: Scores aren’t set in stone. Try these tips to build yours:

Getting out of Credit Card Debt With a Personal Loan

Sometimes the problem is bigger than a low credit score. Unfortunately, some people get so deep into debt that it’s hard to find a way out on their own. One option: A personal loan to pay off credit card debt. This kind of loan usually allows you to consolidate high-interest credit card debt into one lower-interest loan with a fixed monthly payment.

Balance-transfer credit cards are another potential avenue to get out from under debt. Keep in mind, though, that these likely charge balance transfer fees, and your interest rate will be considerable after the promotional period. On the other hand, if you shop around, you may be able to find a personal loan that doesn’t charge origination or other fees.

You might also benefit from free or low-cost financial counseling from a nonprofit organization, such as the National Foundation for Credit Counseling (NFCC).

The Takeaway

Clearly, Americans have become accustomed to and perhaps even reliant on credit cards since they were developed almost 75 years ago. When managed effectively, credit cards are valuable tools to help you pay for the things you need and to sustain the lifestyle you want.

If, however, you feel weighed down by credit card debt, start taking steps to control your credit, rather than letting it control you. Consider your options, such as balance transfer credit cards or using a personal loan, to help you pay off your balance.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOPL1223001

Source: sofi.com

Apache is functioning normally

Mortgage rates could fall to 3% or lower at some point, but if they do, it will likely take several years. 

Getty Images/iStockphoto


It seems like just yesterday when you couldn’t turn on the news without hearing about sub-3% mortgage rates. But today, just a couple of years later, it’s difficult to find a mortgage with under 6.5% interest. That means mortgage rates have more than doubled in a very short period of time. 

If you’re in the market for a new home, it may be challenging to find affordable options with today’s high rates. After all, higher rates equate to higher minimum payments. So, you may be wondering if, and when, mortgage rates might fall to 3% or lower again – and whether or not it’s worth waiting to buy a home until they do.

Although rates could fall to 3% again one day, it’s not likely to happen any time soon. Moreover, it may not be a good idea to wait for mortgage rates to fall before you buy your house.  

See what mortgage interest rate you could qualify for here now.

Will mortgage rates ever fall to 3% again?

Interest rates are cyclical. That means they tend to move in upward and downward cycles – with the current cycle being an upward one. However, that cycle seems to be coming to an end. Many economists expect interest rates to start falling soon, but will they ever fall back to 3%?

It’s possible for mortgage rates to fall to 3% in the future, but here’s why not likely that they will fall that low any time soon: 

Inflation is still well above the Federal Reserve’s target

The Federal Reserve typically increases its federal funds rate target when inflation is too high and reduces it when inflation is too low. Although inflation has been cooling, the most recent data suggests the current annual rate of price growth in the United States is about 3.1%. That’s above the Federal Reserve’s 2% target. 

Slowing inflation means the Federal Reserve isn’t likely to increase its target federal funds rate any time soon. But the fact that price growth continues well ahead of the central bank’s target suggests that no significant rate reductions are on the horizon either. Yes, economists are predicting that rates could begin to fall in 2024, but most agree that the Federal Reserve isn’t likely to make any moves until the second half of the year. That means mortgage rates probably won’t see any meaningful drop for at least several months.  

Learn more about your mortgage rate options here.

The Federal Reserve tends to move slowly

Even if the Federal Reserve does start to cut its federal funds rate target in the second half of 2024, the central bank is probably going to move pretty slowly. That’s for good reason, too. If the Federal Reserve cuts interest rates too quickly, it could spur inflation, erasing all the work the central bank has done to curb increasing prices over the past couple of years. So, any rate cuts in 2024 are likely to be minimal and unlikely to result in mortgage rates dropping to 3%.

Record mortgage rates don’t happen often

According to Federal Reserve data, the sub-3% 30-year mortgage rates of late 2020 and early 2021 were record rates. Record rates don’t usually happen often, but that could be a good thing, too. For example, buyers haven’t paid record high 18%-plus mortgage rates since 1981. 

Why you shouldn’t wait for rates to fall to buy a house

Sure, mortgage rates are relatively high when compared to the rates you would have paid a couple of years ago, but that doesn’t necessarily mean you should wait to buy a home. Here’s why: 

  • Mortgage rates have already fallen: “We have seen mortgage interest rates drop in the last few weeks, which is welcome news to potential buyers,” says Bill Banfield, EVP of Capital Markets for Rocket Mortgage. 
  • Market timing doesn’t always line up with life timing: Banfield went on to argue that “it is impossible to time the market, but people will always need to buy homes – whether they are downsizing after children go off to college or they relocate for a new job.” The simple fact is that life isn’t going to wait for lower interest rates and you probably shouldn’t either.  
  • Competition: The housing market is a competitive one, but it’s not as competitive now as it was when rates were lower. When rates fall, you’ll likely have even more buyers to contend with. 
  • Renting doesn’t build long-term value: Every time you make a mortgage payment, you build equity in your home. But when you make a rent payment, you’re not creating any long-term value. 
  • There are still affordable options: “If someone is in the market to purchase a home, the good news is there are many options to choose from that can help in a higher rate environment,” says Banfield.
  • You may be able to refinance later: It will likely take some time to see any significant drop in mortgage rates. So, it may be wise to buy your home now and refinance your mortgage later when rates fall. 
  • Real estate values tend to grow: Home prices could grow as you wait. So, buying now means you may be able to lock in a more affordable price.  

Don’t wait for prices to climb, lock in your mortgage now.  

The bottom line

Sure, mortgage rates could fall to 3% at some point, but chances are that’s not going to happen anytime soon. Moreover, waiting for rates to drop before you buy your home could backfire. Instead, consider buying your house now and refinancing your mortgage when rates improve. 

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids, three dogs and 10 ducks.

Source: cbsnews.com

Apache is functioning normally

At Home CEO Lee Bird will retire effective Dec. 31, the company said Wednesday.

Bird, 58, has been at the company for 11 years and transformed it from a tired Houston-based brand called Garden Ridge into a fast-growing home superstore concept. He moved the headquarters to Plano and rebranded it At Home. A year ago the company moved into a new headquarters in Dallas.

The departure is a surprise and most expected Bird to at some point lead the company out of private equity ownership with an initial public offering. At Home was taken private after a proxy challenge in July 2021 by Hellman & Friedman in a deal valued at $2.8 billion.

Advertisement

At the time, Bird had said he believed At Home could more than double its store count to more than 600 locations and that it could do so faster as a private company.

D-FW Retail News

The latest on retail openings, closings and trends in D-FW.

A CEO search is on, the company said in a statement.

In the meantime, an office of the CEO has been formed to run the business with Jeff Evans, president and chief merchandising officer; Jerry Murray, chief financial officer; and Ashley Sheetz, chief operating officer.

Advertisement

Erik Ragatz, At Home’s lead director, will be the executive chairman. Ragatz was formerly a partner at Hellman & Friedman where he worked for more than 20 years and is listed as a senior adviser on H&F’s website.

“On behalf of the company, I want to thank Lee for his tremendous leadership of At Home over the last decade,” Ragatz said. “Lee helped build At Home into one of the great retailers across industries. As a leader and mentor, Lee has had a profound impact on At Home’s thousands of employees and will remain an important member of the At Home family for years to come.”

At Home CEO Lee Bird in the At Home store in Timber Creek Crossing shopping center last year. At Home took over a building left vacant by JCPenney. (Juan Figueroa / Staff Photographer)
Advertisement

Bird joined the company as CEO in December 2012 after executive positions at Gap, Old Navy and Nike. He led At Home from a chain of 58 stores and $364 million in revenue to 268 stores with almost $2 billion in annual sales. It went private after a successful period during the pandemic when Americans were sprucing up their homes. Sales increased 27.4% in 2020 to $1.74 billion.

Bird wasn’t available for an interview.

At Home’s sales topped $2 billion last year. Here’s why Dallas shoppers are just discovering it

“Helping At Home become one of the nation’s top home decor retailers is one of the great honors of my career,” Bird said in a press release. He thanked staff who contributed to the company’s achievements.

“Together, we have created a valuable, differentiated business with even more room for growth, and I’m confident in this team’s ability to continue to build on At Home’s track record of success,” Bird said.

Related Stories

X: @MariaHalkias

Looking for more retail coverage? Click here to read all retail news and updates. Click here to subscribe to D-FW Retail and more newsletters from The Dallas Morning News.

Source: dallasnews.com

Apache is functioning normally

From high prices to low inventory, potential home buyers know it’s gnarly out there. But if you’re ready for homeownership, the long-term benefit of buying often outweighs the pain of toughing out the search — even these days.

Think of it like your 5 a.m. spin class: You know it’s good for you, even if it takes grit (and leaves you feeling sore).

With some market savvy, you can make the most of today’s challenging conditions. Here’s your game plan for buying a house in 2024.

The challenge: Stubbornly high mortgage rates squeeze shoppers’ buying power

Buyers have been at the mercy of mortgage rates’ meteoric rise, holding on as the average 30-year fixed rate climbed from 3% to nearly 7% in 2022. In October 2023, rates topped 8% for the first time since 2000 — a surprise even many top economists didn’t predict. But throughout November, they dropped slightly, landing at an average of 7.03% for the week ending Dec. 7.

Higher interest rates make it more expensive to get a mortgage. To put that in perspective: Let’s say you can afford $1,800 per month in principal and interest. At a 3% interest rate, you could afford to borrow $426,900. But at a 7% interest rate, you could afford to borrow only $270,600. Why? Because you’d pay a full $156,300 more in mortgage interest with the higher rate.

For now, economic signals suggest more positive news for buyers in 2024. Dan Moralez, regional vice president at Dart Bank in Holland, Michigan, points to a cooling economy and the pause on Fed interest rate hikes. “All of that stuff really lends itself to mortgage rates getting better and the cost to borrow getting cheaper,” Moralez says.

Let’s set realistic expectations, though: No experts are forecasting a return to 3% rates anytime soon. More likely, we’ll see the 30-year mortgage rate decline modestly below 7% in the second half of 2024, according to forecasts from the Mortgage Bankers Association and the National Association of Realtors.

Your strategy: Do your research to find the best deal

Don’t let high rates keep you on the sidelines for too long. When rates go down, competition goes up — another reason there’s no time like the present to start house hunting.

And whichever way rates move in 2024, you’ll save money if you shop around. Aim to get an estimate from at least three mortgage lenders. The Consumer Financial Protection Bureau estimates borrowers can save $100 per month (or more) this way. And look at the annual percentage rate, or APR, to understand the total cost of the loan, which includes fees and other charges.

With buyers wincing at high rates, some lenders are advertising “buy now, refinance later” offers. Others are offering temporary buydowns, where the buyer’s effective monthly payment is reduced for a year (or a few). Before signing up for a discount, ask questions to understand how it works. Each option could potentially save money, but Moralez says it could also be “smoke and mirrors” if the flashy deal is offset by higher fees.

“It’s one of those things where I tell folks, ‘There’s no free lunch, OK?’” he says. “You know, somebody is paying for it somewhere.”

The challenge: Low inventory means slim pickings for buyers

The rate of existing home sales is the lowest it’s been in 13 years, according to October 2023 data from the National Association of Realtors (NAR). The current market has a 3.6-month supply of unsold home inventory, meaning it would take listed homes 3.6 months to sell at the current sales pace. A balanced market has a supply of five to six months.

So why aren’t sellers selling? Octavius Smiley-Humphries, a real estate agent with The Smiley Group in Apex, North Carolina, points to higher prices and the “rate lock-in effect.”

“At this point, you’d be paying either double your mortgage for the same price house that you have, or a similar mortgage if you’re trying to even downsize,” he says. “So I think the more intelligent buyer is kind of thinking, ‘What’s the benefit?’ unless you absolutely have to move.”

Some hope: Single-family construction permits are on the rise, with more issued in October 2023 than at any other time in the past year, according to the Federal Reserve Bank of St. Louis, so we’ll see more new houses boosting supply soon. And despite larger shortages, 92% of markets have seen modest inventory growth over the last three months, according to a November 2023 report from ICE Mortgage Technology.

Your strategy: Cast a wider net

You can’t control who puts their house on the market. So focus on what you can change: your expectations.

Let go of the fantasy of finding the perfect home when a “good enough” home can get your foot in the door sooner. That’s especially true for first-time home buyers who are eager to build equity.

“Real estate has always been a really solid investment,” Smiley-Humphries says. “So what you essentially lose by waiting six months or a year could mean tens of thousands of dollars.”

For now, maybe you expand your search to include condos or townhouses. Maybe you settle for fewer bathrooms or a dated interior. Keep your chin up — even if you have to tolerate less square footage or weird linoleum floors for a while, you’ll have equity to remodel or sell in a few years.

The challenge: High prices push affordability to the worst it’s been in almost 40 years

Housing is the least affordable it’s been since 1984, according to a November 2023 report from ICE Mortgage Technology. Why? Home prices are growing faster than income, and on top of that, higher mortgage rates increase the cost of borrowing.

In October 2023, the median existing home sales price climbed to a record high of $391,800, according to the NAR. To buy a median-priced home at that time, buyers would need to shell out $2,567 per month just in principal in interest, ICE estimates. That’s another all-time high since ICE has been keeping track — and nearly double the median monthly payment of $1,327 just two years ago.

Until supply catches up to demand, prices are unlikely to fall. Realtor.com estimates prices will fall less than 2% next year. That’s another reason to jump in now: A big drop in prices could trigger more competition.

Your strategy: Make a budget and stick to it

If you’re Zillow-stalking houses you can’t afford, stop. Instead, channel that energy toward your plan to shop for a house in real life — starting with setting a realistic budget.

First, talk to a financial advisor or use an online calculator to see how much house you can afford. Understand how mortgage lenders will determine your eligibility, including analyzing your credit score, cash savings and monthly debt payments.

Next, find a buyer’s agent who knows how far your budget can go in your local market. An experienced agent can advocate for you and help you snag a good deal.

One bargain-hunting tip: Start searching in the winter, suggests Ellie Kowalchik, a real estate agent who leads the Move2Team with Keller Williams Pinnacle Group in Cincinnati, Ohio.

“There are good houses on the market now that aren’t getting the attention they may get in the spring with more buyer activity,” she says. “Less competition is good for buyers.”

The challenge: Multiple offers are common, and first-time buyers have less cash

More than one in four homes are still selling for above list price, according to October 2023 data from the NAR: 28% of homes sold for above list price that month. Homes for sale spent a median of 23 days on the market and saw an average of 2.5 offers, a sign that competition remains tough.

“Limited housing inventory is significantly preventing housing demand from fully being satisfied,” Lawrence Yun, NAR chief economist, said in a press release. “Multiple offers, of course, yield only one winner, with the rest left to continue their search.”

In general, first-time buyers come to the negotiating table with less cash than repeat buyers, reports the NAR. First-time buyers make a median down payment of 8%, while repeat buyers put down a median 19%.

And nearly one in three (29%) of sales were made in cash, reports the NAR, up slightly from 26% in 2022.

Your strategy: Use leverage where you have it

A good real estate agent can help you craft a strong offer, even if other buyers flash more cash.

Aziz Alhees, a real estate agent with Compass in Pasadena, California, has seen his share of wealthy investors making cash offers. He notes that they tend to bid below asking price since cash sales close faster. The promise of a quick closing is enough to get some sellers to turn down higher offers that ask for more time.

So Alhees competes on speed: With a mortgage preapproval and all other paperwork in hand, he prepares his buyers to close in 14 days.

“We’re not afraid of cash offers anymore,” he says.

On the flip side, if the sellers need more time to move out, a flexible closing timeline can sweeten some deals, too. But don’t waive the home inspection when you’re negotiating. It can be tempting, but you’re only hurting yourself if you later discover expensive problems.

The bottom line: Set realistic expectations

It’s fair to feel bummed out about high costs and low inventory. That’s especially true for first-time buyers who have been putting off their search, only to see the market remaining rough.

The solution: Think long term. Holding out for lower rates likely means you’ll face steeper prices and more competition. So if you’re determined to buy, find a place that suits your needs and budget as-is. Expecting perfection often means setting yourself up for disappointment.

“Sometimes I have clients that think they’re going to hit a home run the very first house they buy,” Moralez says. “And a lot of times I tell clients, well, sometimes it’s OK to be happy just getting on base.”

Source: nerdwallet.com

Apache is functioning normally

5 min

Aspiring home buyers grappling with the most difficult housing market in nearly 40 years are finally seeing some relief.

Borrowing costs for 30-year fixed-rate mortgages dropped below 7 percent this week for the first time in four months, according to the housing-finance giant Freddie Mac on Thursday. Just six weeks ago, the average rate for those home loans peaked at 7.8 percent, a high not seen since 2000; now it stands at 6.95 percent.

Pressure on the battered real estate market look poised to ease further. The Federal Reserve on Wednesday held off raising interest rates, extending its pause to three rate-setting meetings in a row, as its policymakers projected that they would cut their benchmark rate by 0.75 of a percentage point by the end of next year.

Investors see the move as confirmation that the central bank has ended its war on inflation and will take a more hands-off approach to guard against an economic downturn. For home buyers, the Fed’s decision should add momentum to an improved outlook, even though housing experts say meaningful mortgage-rate relief could still be months away.

Calculate how much more mortgages will cost as interest rates rise

Borrowing costs remain more than double what they were early last year, and real estate prices remain elevated. That has kept the inventory of for-sale home low because existing homeowners have more incentive to stay put if moving means taking on a costlier home loan.

But with rates starting to fall, there already are signs that buyers are rejoining the hunt. Mortgage applications, which in October sank to their lowest level since 1995, have been ticking up since, the Mortgage Bankers Association reported.

How did we get here?

The pandemic sent the housing market into overdrive, as Americans who were flush with cash and encouraged by low borrowing costs rushed to buy homes. Median home-sale prices surged by roughly 50 percent from the start of the pandemic to the end of last year, according to Fed data.

It wasn’t just real estate that overheated. Prices spiking across the economy prompted the Fed in the spring of 2022 to start raising interest rates in a bid to get inflation under control.

The effort has largely succeeded. Inflation has moderated, with prices climbing 3.1 percent in November over the previous year, down from a high of 9.1 percent in June 2022. But the Fed’s campaign has also helped foster the real estate conditions pushing would-be buyers back onto the sidelines.

How are mortgage rates set?

Mortgage lenders set borrowing costs by first considering what the federal government pays to those who buy 10-year Treasury bonds, a baseline that markets use to assess the risk of other investments. They add a premium to that rate to cover the extra risk of home buyers’ defaulting on their loans.

For most of the decade preceding last year, that premium — or “spread” — hovered around 1.5 percent. So in 2021, when the average payout on the 10-year Treasury bond was about 1.5 percent, most home buyers could secure a 30-year mortgage with around a 3 percent interest rate.

But starting a year ago, the spread started to widen and is now around 3 percent, double its typical level. The difference adds up to real money for borrowers: It translates into $352 more per month on a 30-year fixed-rate mortgage for someone who bought a $450,000 house with a 20 percent down payment, according to a Washington Post mortgage calculator.

Why are mortgage lenders charging borrowers so much extra right now?

Several factors contributed to this shift. A major reason relates to how lenders price home loans and account for the risk that borrowers will refinance their mortgages if interest rates fall.

The reason this is so important is that the U.S. real estate market is unique in the world for offering homeowners the option to renegotiate the terms of their mortgages if borrowing costs fall, notes Susan Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania. That privilege encourages borrowers to take out 30-year loans — another singular feature of the U.S. mortgage market — without fear of locking themselves into disadvantageous rates.

But the arrangement compels lenders to hedge against the possibility that falling interest rates will tear holes in their balance sheets. A borrower who refinances effectively strips a higher-yielding loan from the lender, which will struggle to find as profitable an investment amid the lower rates. The lender is “stuck with having to receive the money back when they don’t want it,” said Jacob Sagi, a finance professor at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.

In short: Borrowers effectively are paying more for their mortgages now because lenders expect them to be paying less soon.

When will interest rates go down for borrowers?

The answer depends on the Fed’s course in 2024. Most economists expect the central bank to start cutting its benchmark interest rate in the first half of next year, a message further reinforced Wednesday.

Precisely when such moves translate into cheaper mortgages is up for debate. The Mortgage Bankers Association recently projected that the interest rate on 30-year mortgages would fall to 6 percent by the end of next year.

What effect will falling mortgage rates have on home affordability?

As mortgage interest rates track the Fed’s benchmark rate lower, borrowers can expect an added benefit from lenders trimming the premium they have been charging to cover the risk of refinancing. “The spread will narrow,” Wachter said. “There’s a double positive in our future for borrowers.”

But even as borrowing costs edge down, many current homeowners may remain unwilling to list. More than 82 percent of current homeowners have locked in mortgages with rates below 5 percent, according to Redfin data. Daryl Fairweather, the site’s chief economist, projects that listings will pick up next year, outstripping demand and causing home prices to fall by 1 percent.

Loading…

Source: washingtonpost.com