Rates dropped a few more basis points coming out of the holiday weekend. In the midst of geopolitical intrigue and vaccine developments, the 30-year fixed rate mortgage managed to fall 3 basis points while the 15-year fell 2 basis points.
Treasury yields have been bouncing near the lower boundary, but were on the rise Tuesday after bipartisan lawmakers offered up a $908 billion stimulus plan. Rates, however, are an entirely different story. They have been insured against moving past 3% by the current gap between MBS and mortgage rates.
Renting is Hard to Do (But Buying is Easy)
Housing affordability is down from 170.7 last year. However, it moved up from August and remains above the 100-mark at 159.6. This means that a family with a median income buying a median-priced house has 159.6% of the income required (in other words, more than enough income) to get a conventional mortgage*.
*Assumes a 20% down payment and that principal and interest payments do not exceed 25% of their combined income. More information on the methodology can be found on the NAR website.
How does this fit in with other data?
- This is in line with consumer intuitions
- 60% and 59% believe now is a good time to buy and sell, respectively
- Only 35% don’t think it’s a good time to buy or sell
- Rental affordability fell in October from 109.8 to 101.8
- First-time home buyer affordability in Q3 2020 also fell from 111.1 to 105.6 as first timers continue to be priced out by more seasoned buyers
the FHFA Pushes Its Limits
In 2021, the conforming loan limit (CLL) for one-unit properties will increase from $510,400 to $548,250. This represents a 7.42% increase, which is the same amount by which the average house has gone up in price. Most counties use this baseline loan limit. However, in high cost areas where the median home value is more than 115% of the baseline, the conforming loan limit can be as high as $822,375.
Bundle Up for Buying Season
Conventional wisdom says spring is the best time to buy and sell, but new data shows buyers could be getting the short end of the stick. According to a study that spans seven years of data and 27 million single-family home and condo sales, winter is when buyers can make a real killing.
- Buyers can purchase homes at exactly market value even in the most competitive markets in the winter
- December is the best month to buy, followed by November and January
- By February, the market starts to heat up again and by June, premiums are at their highest
- The best days buyers can close on their homes are December 4th, 6th, 26th, and January 26th