TODAY’S RATES & HOUSING NEWS
Mortgage Rates continue to move higher and the Jobs Data didn’t help.
On Friday, the BLS Jobs Report came out and the job creation numbers blew out expectations.
The job creation figure came in at 336,000, almost double the projection of 170,000.
On top of that, the prior 2 months had upward revisions in the job creation number.
As mortgage rates surge to 8% for many clients, the question we keep hearing is “When will rates drop?”.
While we don’t have a crystal ball, it appears that interest rates will not drop significantly until 2024.
The below article does a great job explaining the current rate market and the spread between the 10 year treasury and mortgage rates.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-10062023
Although the FED didn’t raise the Federal Funds Rate at their last meeting, their commentary on interest rates being higher for longer and many in the FED openly talking about another rise in rates in 2023 is shaping the market.
The recent rise in rates will likely lower home buying demand in many markets and raise the housing supply in some markets.
There is no immediate cure for the housing shortage, but less demand will likely raise the time period homes are on the market.
This, along with the Holiday season typically having less activity, will give buyers some advantages in negotiating power.
If you are most concerned about getting a lower payment, I encourage asking for seller concessions to temporarily or permanently buy down the rate/payment rather than going lower on the purchase price.
This has a much larger effect on your payment than going lower on the purchase price.
Here are the max concessions for most standard products.
Below is Mortgage News Daily’s average interest rates across the U.S. as of 10/6/23.
Below is the Green Home Loans rate sheet today.
There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc.
Please call me to go over your specific scenario so we can price your loan out accurately.
FANNIE MAE ANNOUNCES 5% DOWN FOR 2-4 UNIT PROPERTIES
Fannie Mae decreased the down payment requirements for primary residence 2-4 unit homes to 5%.
This is great for house hackers looking to build their real estate portfolio.
House hacker is the term that describes real estate investors purchasing a home as a primary residence while renting out rooms or units to other people – thus lowering their monthly expenses and allowing them to take advantage of the wealth creation of real estate.
House hackers can purchase a home with a primary residence rate. (typically much lower than investment rates)
Many house hackers live in the home for a year and then rent it out to purchase a new property and repeat the process.
This allows the house hacker to build a cash flowing real estate portfolio where the tenants pay off the mortgage, and the hacker builds appreciation and equity over time.
FHA has allowed clients to purchase a 4 unit home and put 3.5% down as long as they were living in one unit.
Conventional Loans backed by Fannie Mae weren’t as progressive.
This breaking news from Fannie Mae will help Real Estate investors with higher credit scores.
Conventional loans are typically a better mortgage for higher credit score buyers as they often have lower monthly mortgage insurance premiums and no upfront mortgage insurance costs.
Below is the new chart for Fannie Mae.
Please call me if you have any questions.
