Mortgage rates reversed course and soared to the highest averages in seven years, Freddie Mac reported. The 30-year fixed-rate mortgage averaged 4.61 percent this week, which matches the highest level since May 19, 2011.
The 15-year fixed-rate mortgage averaged 4.08 percent, increasing from last week and a year ago.
Gov. Andrew Cuomo announced New York State is moving to join a lawsuit against the federal government for failing to enforce the Fair Housing Act. The lawsuit aims to force the U.S. Department of Housing and Urban Development to enforce a rule requiring local and state governments to address segregated housing patterns as a condition of receiving federal housing funding. New York is the first state in the nation to move to join in the national lawsuit filed by a group of fair housing advocates, which seeks to reverse HUD’s suspension of the implementation of the Affirmatively Furthering Fair Housing Rule.
The obligation to “affirmatively further fair housing” has applied to all HUD funding since the Fair Housing Act was passed in 1968. In July 2015, under the Obama administration, HUD adopted a set of federal regulations—known as the AFFH Rule—to guide the compliance efforts of local and state recipients of HUD’s block grant funds. The AFFH Rule strengthened HUD’s civil rights oversight of grantees and encouraged grantees to fulfill their obligation to affirmatively further fair housing and achieve the goals of the Fair Housing Act.
In January, under the Trump administration, HUD postponed the implementation of a requirement that local governments conduct an in-depth analysis — called an Assessment of Fair Housing. This assessment informs efforts to address housing discrimination, encourage residential integration, and remove barriers to opportunity. The rule also requires the results of that analysis to be submitted to HUD, with actions identified to remove barriers to fair housing, prior to receiving federal housing funds. By suspending the requirement, HUD effectively quit its obligation to provide civil rights oversight for as much as $5.5 billion per year in the funding that is distributed to over 40 jurisdictions in New York and almost 1,000 jurisdictions across the country.
The case, National Fair Housing Alliance et al v. Carson, is a legal challenge brought by civil rights groups to block HUD from unnecessarily delaying implementation of AFFH Rule’s requirement for an Assessment of Fair Housing.
New York has concrete interests in this critical civil rights lawsuit that require the State to take action to uphold the tenets of fair housing. The State’s motion to join the case will establish that the Fair Housing Act requires HUD to administer its programs in a manner that affirmatively furthers fair housing and, by suspending the AFFH Rule’s requirements, that HUD has abdicated this statutory requirement for years to come. Specifically, the suspension of the AFFH Rule’ is unlawful because HUD failed to follow federal law requiring notice and public comment and failed to provide sufficient justification for the suspension the AFFH Rule’s requirements.
Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in May after a downwardly revised April reading on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
The Northeast held steady at 55.
Strong wage growth more than offset an increase in mortgage interest rates to boost nationwide housing affordability in the first quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI).
Elmira and Binghamton, NY ranked among the top five most affordable smaller housing markets in the country, according to the index.
In all, 61.6 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $71,900. This is up from the 59.6 percent of homes sold that were affordable to median-income earners in the fourth quarter.
High demand for homes for sale mixed with low inventories is prompting bidding wars. Thirty-seven percent of properties that closed in March sold at or above the list price, according to the March 2018 REALTORS Confidence Index Survey. That’s higher than a year ago, when 35 percent of properties sold at or above the list price.
Properties were typically on the market for 30 days in March. REALTORS wrote an average of 2.4 offers per client, according to the report. The two most common problems encountered for contracts that had a delay to settlement were from issues related to obtaining financing and appraisal issues.
Mortgage rates dropped last week, but that didn’t seem to push homeowners or homebuyers to take advantage. Total mortgage applications dropped 0.4 percent for the week. Volume is now 6 percent lower than a year ago, according to the Mortgage Bankers Association.
Refinance applications, which tend to be the most rate-sensitive, dropped 1 percent last week and are now 18 percent lower than a year ago. Mortgage rates were considerably lower a year ago when compared to today.
In what should be a prime time for homebuying, mortgage applications for home purchases were essentially flat last week, dropping 0.2 percent. Home purchase applications are barely 3 percent higher than a year ago, the MBA reports.
Millennials who delayed homeownership following the Great Recession are now finally entering the market in bigger numbers. They comprised 36 percent of homebuyers last year, up from 32 percent in 2013, according to the National Association of REALTORS. But they’re trying to make up for lost time by skipping over the starter, entry-level home and heading right into buying larger, pricier homes that they plan to stay in longer, USA Today reports.
Many millennials in their mid-30s can now afford the more expensive homes. Some young adults have been saving by living with their parents for years into adulthood. They’ve also been moving up in their jobs and earning higher salaries.
As they get married and start raising kids, they’re finding they need more space and are moving into homeownership. However, a severe shortage of lower-priced starter homes is prompting them to up their budgets and look at pricier places.
Would-be home buyers and refinancing homeowners both receded from the mortgage market last week as mortgage rates surged to their highest averages in nearly five years. The Mortgage Bankers Association’s seasonally adjusted index showed that total application volume, which includes home purchases and refinances, dropped 2.5 percent last week and are now 3.3 percent lower than a year ago.
Refinance volume took most of the hit, dropping 4 percent last week compared to the previous week. Refinance volume is now 15 percent below a year ago. Borrowers who wish to refinance tend to be more rate-sensitive than home shoppers.
Applications to buy a home still dropped 2 percent last week. Purchase applications, however, remain 5 percent higher than a year ago.
Pending home sales picked up the pace in March, but ongoing issues related to low inventory kept contract activity below year-ago levels, according to the National Association of REALTORS’s Pending Home Sales Index. The index inched up 0.4 percent to a reading of 107.6 in March. Despite the uptick, overall activity was down on an annualized basis for the third consecutive month.
Pending home sales dropped 5.6 percent month over month for the Northeast, and fell 8.1 percent year over year. NAR Chief Economist Lawrence Yun said multiple winter storms and colder than usual weather contributed to the decrease.
The Consumer Financial Protection Bureau says it has fixed what’s become known as an information “black hole” in the Know Before You Owe mortgage rules, and the agency is attempting to provide greater clarity to borrowers when it comes to disclosing increases in closing costs. Under a new amendment to the mortgage rules, the CFPB clarifies when lenders are allowed to pass increased closing costs on to consumers and makes the disclosure of such increases clearer on the Closing Disclosure form.
According to the CFPB’s proposed rule, “The Bureau proposed to allow creditors to reset tolerances using a Closing Disclosure without regard to the four-business day limit. Under the proposal, as under the current rule, to reset tolerances with a Closing Disclosure, creditors would have been required to provide the Closing Disclosure to the consumer within three business days of receiving information sufficient to establish that a reason for revision applies. Further, as under the current rule, creditors would have been allowed to reset tolerances only under the limited circumstances described in § 1026.19(e)(3)(iv).”
The final rule will take affect within 30 days after it is published in the Federal Register.
Freddie Mac is debuting a new 3-percent down payment option for qualified first-time buyers that could put it in direct competition with the Federal Housing Administration’s low down payment mortgage. The mortgage giant announced last week that it is rolling out a new conventional option called HomeOne, which will not have any geographic or income restrictions.
Freddie Mac rolled out conventional mortgages with 3 percent down payments more than three years ago for qualified low- and moderate-income borrowers. Its HomeOne product will not replace its current Home Possible products, but instead serve as a complement to it, Freddie Mac officials say.
HomeOne mortgages will be offered only for conforming fixed-rate mortgages that are secured by a one-unit primary residence. At least one of the borrowers must be a first-time buyer. Also, applicants are required to participate in homeownership education to qualify for the mortgage. The loan is available for single-family homes, condos, and townhomes. Manufactured homes are not eligible.
Over the last year, more Americans became homeowners as the number of renters continued to decrease. The homeownership rate in the first quarter was unchanged at 64.2 percent, higher than last year’s 63.6 percent, according to the Census Department. This is also the fifth consecutive quarter of yearly increases in the ownership rate.
The homeownership rate has been gradually climbing back since hitting a 50-year low in 2016. The rate peaked in 2004 at 69.2 percent, but despite recent climbs, it still remains below the 25-year average rate of 66.3 percent. Meanwhile, the number of renters has dropped.
More young Americans are buying homes. The ownership rate for Americans under age 35 was 35.3 percent in the first quarter, which is a full percentage point higher than a year ago.