The Federal Open Market Committee Indicates Taper End In March, Rate Hike in our midst! Read on

FOMC Indicates Taper End In March, Rate Hike Soon

Officials at the Federal Reserve have been persuaded by rising inflation and a solid labor market that interest rates must be increased “soon.” However, a specific date has yet to be announced.

The Federal Open Market Committee (FOMC) resolved on Wednesday to hold the federal funds rate target range at 0 to 0.25 percent, but it is expected that rates will be hiked in early March.

Mortgage-backed securities and loan rates will rise in 2022 due to the announcement of a rate hike and the closure of the pandemic-era asset purchasing policy, which will strain mortgage-backed securities. For a typical 30-year mortgage, mortgage rates are currently above 3.5 percent, and the Mortgage Bankers Association predicts that by the end of the year, mortgage rates will rise to 4%. Read More

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In today’s news, Home sales face headwinds in November in the midst of a housing market! Find out more now!

Home Price Gains Slow

In October, the Case-Shiller U.S. National Home Price Index, which covers all nine census divisions in the United States, climbed 19.1 percent on an annual basis. In September, the yearly gain was 19.7%. The 10-City Composite was up 17.1 percent year over year, down from 17.9 percent the previous month, and the 20-City Composite rose 18.4 percent year over year, down from 19.1 percent the last month.

While prices rose in October, they did so at a slower pace. According to Craig J. Lazzara, Managing Director at S&P DJI, October’s gains were lower than September’s, while September’s gains were lower than August’s in all three indices. “We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years or reflects a more permanent secular change.”

Pending Home Sales Slip in November Amid Hot Housing Market

In November, pending home sales, a leading index of the housing market’s health fell short of forecasts. The National Association of Realtors’ (NAR) Pending Home Sales Index, which counts the number of properties under contract to be sold, fell 2.2 percent in November from October. According to Bloomberg consensus forecasts, analysts projected a 0.8 percent gain in revenue. 

Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year,” NAR Chief Economist Lawrence Yun said in a statement. “These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.”

Housing demand remains high, according to Yun, who added that homes on the market for sale go from “listed status” to “under contract” in around 18 days.

Next weeks potential market moving reports are:

  • Monday, January 3rd – Construction Spending          
  • Tuesday, January 4th – Job Openings
  • Wednesday, January 5th – ADP Employment Report, FOMC Minutes
  • Thursday, January 6th – Initial Jobless Claims, Continuing Jobless Claims
  • Friday, January 7th – Unemployment Rate, Consumer Credit

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.

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Do You Really Have to Have a 20% Down Payment Right This Minute? Presently, How Much Should You Save For The Best California Home Loan Interest Rate Today?

When the financial advice website NerdWallet surveyed home buyers in 2019, they learned that almost two-thirds of them (62%) thought they needed at least a 20% down payment to buy a home. That’s not true, especially if you’re a first-time homebuyer. NerdWallet’s survey found that the average down payment for first-time homebuyers in 2019 was 7%, and among all buyers, the average rose to 16%.

What kinds of home mortgages require less than a 20% down payment?

FHA Home Mortgages: FHA home loans start with a minimum of 3.5% down payment. 30 year fixed rate FHA loans also have more flexible standards for credit scores than other loan programs. USDA loans also don’t require down payments and can offer mortgages in USDA-qualified areas.

VA Home Mortgages: VA loans require no down payment for eligible veterans. You can get a 30-year fixed-rate VA mortgage or a 15-year fixed-rate VA mortgage with no money down. As of January 1, 2020, the VA lifted county loan limits, so you can get a no money down VA home mortgage in any amount you’re qualified to receive.

Conventional home mortgages: Conventional mortgages can offer down payments as low as 3% and potentially lower. Some mortgage lenders offer down payment assistance grants, especially for first-time and non-traditional home buyers.

How much should you save for a California home mortgage down payment?

You can use a mortgage calculator to see how much your payments will be with different down payment amounts. Save as much as you can, but as we’ve already said, you don’t have to save 20% for the down payment. As you save, keep in mind you will need to pay for other costs when you close your loan. You may also need to pay for mortgage insurance with a lower down payment.

You have many options for your mortgage and more flexibility in home buying and loan choice than a lot of online advice articles show. This is another reason you should work with an experienced California mortgage specialist who can help you plan to get a loan with a down payment you can afford along with monthly payments that help you meet your home buying and financial goals.

 

 

Sources

It turns out LA Times has had “20% down payment is dead” articles for 3-4 years – here is another one with the same headline:

https://www.nerdwallet.com/blog/mortgages/20-percent-mortgage-down-payment-dead/

 

 

 
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