First-Time Buyers Face Rosier Prospects in 2015

Real Estate News

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Jan 9, 2015 January 15th, 2015Jonathan Smoke

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By: Jonathan SmokeJanuary 15th, 2015 

  

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It’s official: 2014 was the best year for total job growth since 2000. The housing market now has a confluence of several important demand-boosting factors that should make 2015 a big year for growth in home sales.
First, mortgage rates remain—at least for the time being—at near historic lows. The latest reprieve from higher rates is thanks to the bond market’s reaction to global economic concerns. Yet, as the jobs data indicate, the U.S. economy is on much better footing than the rest of the world.

Key factors for first-time buyers

But the key issue for first-time buyers has not been rates, which have been historically low for several years. Their employment situation, overall level of confidence, ability to qualify for credit and ability to afford the down payment have been the larger issues.
December data show that employment for younger households, in particular, has improved dramatically in the past year. For example, more civilian jobs for 25- to 34-year-olds were created in 2014 than in any other year since 1987.
Mortgage backers Fannie Mae and Freddie Mac clarified their credit qualification standards in the fall, which had been murky since 2009 legislation enacted in reaction to the housing bust. This should make it easier for many would-be home buyers to get a loan with slightly lower FICO scores and slightly higher loan-to-income and debt-to-income ratios.
The new low-down-payment programs announced in December from Fannie Mae and Freddie Mac will make conventional mortgages more accessible to first-time buyers.

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Average 30-year mortgage rate up to 4.12%

WASHINGTON (AP) – Sept. 12, 2014 – Average long-term U.S. mortgage rates rose slightly this week but remained near their lows for the year.
Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year loan edged up to 4.12 percent from 4.10 percent last week, where it had stayed for three straight weeks.
The average for a 15-year mortgage, a popular choice for people who are refinancing, rose to 3.26 percent from 3.24 percent.
At 4.12 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end next month.
Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.54 percent Wednesday, up from 2.41 percent a week earlier. It was trading at 2.53 percent Thursday morning.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year mortgage also remained at 0.5 point.
The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent from 2.97 percent. The fee was stable at 0.5 point.
For a one-year ARM, the average rate increased to 2.45 percent from 2.40 percent. The fee held at 0.4 point.
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Citizens wants to lower property insurance rates

TALLAHASSEE, Fla. – June 24, 2014 – Nearly seven out of 10 Citizens Property Insurance Corporation personal-lines policyholders would see rate reductions in 2015 under a slate of rate recommendations being considered today by the Board of Governors in Orlando.

Under the rates proposed by Citizens, policyholders with homeowners policies would see an average decrease of 3.2 percent, while mobile-home owners would see an average 3.9 percent.

The 2015 recommended rates will be submitted to the Florida Office of Insurance Regulation, which must establish rates for Citizens before they take effect.

The lower rates come as a surprise to some observers since Citizens has been trying to raise rates to become actuarially sound, but has been hamstrung by a law that allows it to raise rates no more than 10 percent per year.



Citizens wants to lower property insurance rates