#Mortgages Lowest in Five Months, So Why Are There So Few Takers

Posted on in Housing, TV Appearances

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Everything YOU Need to Know to Stay Ahead of Your Competitors
April 20, 2017
Mortgages Lowest in Five Months, So Why Are There So Few Takers…

Mortgages rates have hit their lowest levels since November, but applications for new loans dropped 1.8% last week.

And, according to the Mortgage Bankers Association, volume is down 23.5 percent from the same week last year.

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“Blame the tight inventory of homes for sale, especially the lack of lower-priced ‘starter homes’ which are keeping first-time buyers and millennials on the side-lines,” says The Collingwood Group Chairman Tim Rood.  “In addition housing policy makers need to pay attention to the fact that the average first-time homebuyers are white (75%) and make over $90,000 a year. That’s a real problem which requires action from policy makers to ensure more democratic access to homeownership and credit.”

>Collingwood Group Chairman Tim Rood joins Fox Business Network’s Neil Cavuto Friday at Noon, Eastern to discuss this and more.

The average contract interest rate for 30-year fixed-rate mortgages dropped to 4.22 percent from 4.28 percent, last week.

MBA chief economist Mike Fratantoni says, “Rates are still too high to attract much interest from homeowners looking to refinance, and purchase activity was relatively weak.”

Applications to purchase a home fell 3 percent from the previous week and 1 percent from a year ago. Refinance applications increased only slightly by 0.2 percent from a week ago, but are down 41.5 percent from last year.

High Rent Bubble may be About to Pop

In October, the share of New York City rentals that took a price cut, according to the listing tracker Streeteasy, topped 42 percent—the highest level since December 2010. The real estate firm Citi Habitats, which draws data from its own listings, reports that the vacancy rate in Manhattan has climbed to 2.1 percent, its highest level since 2009. Both of those indicators, in other words, are back in Great Recession territory. “It’s a renter’s market right now,” says Chris Lee, the director of sales at Triplemint, a real estate startup.

We don’t know yet why that is, or how long it could last. Certainly, rents have outpaced incomes. White-collar tenants are less geographically selective than they used to be. New construction has caught up with demand. But whatever the reason, it looks like rents are about to dip … and then some.

It is hard to overstate the impact of New York’s high residential rents. They all but elected mayor Bill de Blasio, whose campaign’s theme was correcting for inequality. They have driven homelessness to record levels and continue to monopolize the disposable income of millions of New Yorkers. They have caused dozens of commentators to question the city’s very identity as a haven for the castoffs and dreamers of middle America and strivers from the rest of the world.

And because the problem of high rents is so general to American cities right now, if New York’s rental bubble is about to pop, it may offer a lesson to places like Los Angeles.

First, a caveat: It’s hard to generalize about rents. Different brokerages pull data from different stocks of apartments and report different findings. Some say New York’s rents are already falling faster than any high-cost market in the country. Most say that prices have softened or stabilized.

But there’s reason to suspect that rents are on the cusp of a larger decline. That discounts and vacancy are at a seven-year high is part of it.

read more: Business Insider

Here’s Where It’s Cheaper to Buy Then to Rent

Almost everywhere in the U.S., it’s cheaper to rent a home than to buy.

But in select cities, homeowners come out ahead, thanks to a low cost of living and favorable housing market.

To find the places where owning is cheaper than renting, financial services site SmartAsset gathered data on the average rent and home prices in the 100 largest metro areas in the US

10. Omaha, Nebraska

Average monthly mortgage payment: $583
Average monthly rent: $1,255
Average home price: $250,822
Years needed to break even: 1.63

9. New Orleans

Average monthly mortgage payment: $648
Average monthly rent: $1,276
Average home price: $235,127
Years needed to break even: 1.59

8. Baton Rouge, Louisiana

Average monthly mortgage payment: $561
Average monthly rent: $1.127
Average home price: $216,308
Years needed to break even: 1.58

Baton Rouge, Louisiana

7. Cincinnati

Average monthly mortgage payment: $544
Average monthly rent: $1,167
Average home price: $220,633
Years needed to break even: 1.49

 6. Columbia, South Carolina

Average monthly mortgage payment: $460
Average monthly rent: $1,202
Average home price: $189,787
Years needed to break even: 1.47

 5. Gary, Indiana

Average monthly mortgage payment: $558
Average monthly rent: $1,136
Average home price: $205,163
Years needed to break even: 1.34

 4. Tulsa, Oklahoma

Average monthly mortgage payment: $449
Average monthly rent: $1,093
Average home price: $174,697
Years needed to break even: 1.34

 3. Greenville, South Carolina

Average monthly mortgage payment: $485
Average monthly rent: $1,008
Average home price: $175,235
Years needed to break even: 1.33

 2. Louisville, Kentucky

Average monthly mortgage payment: $575
Average monthly rent: $1,126
Average home price: $225,826
Years needed to break even: 1.29

 1. Little Rock, Arkansas

Average monthly mortgage payment: $496
Average monthly rent: $1,146
Average home price: $196,120
Years needed to break even: 1.26

Why Renters Don’t Want to Buy Homes Now

Even though they’re becoming more optimistic about their financial situations, more people who rent their homes are foregoing buying a house.

One in five renters now say they have no interest in ever owning a home, up from 13% in January 2016, according to a report by Freddie Mac. And nearly 60% of current renters expect to rent their next property when they make their next move, up from 55% in September.

This shift toward renting versus buying is occurring despite a relative improvement in the financial situations for many renters: 41% of them say they have enough funds to go beyond each payday, as opposed to living paycheck to paycheck or not having enough money for basic necessities, the highest level since October 2015, Freddie Mac found. Harris Poll surveyed more than 4,000 adults on Freddie Mac’s behalf, of which 1,282 were renters, to help produce the report.

Even though they’re becoming more optimistic about their financial situations, more people who rent their homes are foregoing buying a house.

One in five renters now say they have no interest in ever owning a home, up from 13% in January 2016, according to a report released this week by Freddie Mac. And nearly 60% of current renters expect to rent their next property when they make their next move, up from 55% in September.

This shift toward renting versus buying is occurring despite a relative improvement in the financial situations for many renters: 41% of them say they have enough funds to go beyond each payday, as opposed to living paycheck to paycheck or not having enough money for basic necessities, the highest level since October 2015, Freddie Mac found. Harris Poll surveyed more than 4,000 adults on Freddie Mac’s behalf, of which 1,282 were renters, to help produce the report.

read more:MarketWatch

Kellyanne Conway Purchases Alternative Mansion

Kellyanne Conway must feel pretty secure in her job in the Trump administration. The embattled presidential aide has scooped up an $8 million mansion close to where former President Barack Obama as well as first daughter Ivanka Trump and husband/cabinet member Jared Kushner are leasing, according to Washingtonian magazine. It’s getting awfully crowded in that neighborhood!

The Massachusetts Avenue Heights house was owned by the former acting prime minister of Pakistan, Moeenuddin Ahmad Qureshi, who died in November. It’s an eight-bedroom, 10-bath, white brick house that spreads over 15,000 square feet on a half-acre of land. The manse features a family and catering kitchen, an elevator, a wood-paneled library, and a coffered ceiling over the living room.

read more: Realtor.com

Watch This

Today

  • Freddie Mac Weekly Mortgage Survey 10 a.m. ET

Friday

  • Existing Home Sales 10 a.m. ET
  • Collingwood Group Chairman Tim Rood joins FBN’s Neil Cavuto Noon, ET

Have a prosperous day ahead!

 

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Lou Giserman

Senior Media Consultant

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