Average Columbia SC mortgage rates followed 10-year Treasury yields higher and rose for the third consecutive week last week. At 3.85%, the average 30-year fixed-rate Columbia SC mortgage rate is just below the high for 2015.
The 15-year fixed Columbia SC mortgage rates averaged 3.07% with an average 0.6 point last week, up from the previous week when it averaged 3.02%. A year ago at this time, the 15-year fixed rate mortgage averaged 3.29%.
Higher Columbia SC Mortgage Rates Mean Less House
Higher Columbia SC mortgage rates will mean more expensive mortgages and less house. Right now, the 30-year mortgage costs nearly a half-percent cheaper than the same mortgage cost a year ago, and more than a full point cheaper than mortgages cost five years ago. If you agree with (almost literally) everyone else that interest rates will rise over the next 12 months, the time to lock in a low rate is now.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.89% last week with an average 0.5 point, down from the previous week when it averaged 2.90%. A year ago, the 5-year Adjustable rate mortgage averaged 3.01%.
The 1-year Treasury-indexed adjustable rate mortgage averaged 2.48% last week with an average 0.4 point, up from the previous week when it averaged 2.46%. At this time last year, the 1-year ARM averaged 2.43%.
The labor market continues to improve with the U.S. economy adding 223,000 jobs in April, a solid rebound from merely 85,000 job gains in March. Also, the unemployment rate dipped to 5.4% in April as the participation rate ticked up to 62.8% and jobless claims were far less than expected.
Pending sales of existing homes in March rose 1.1 percent, according to the National Association of Realtors. The median price of an existing home nationwide was up 7.8 percent from a year earlier.
With just about everyone agreeing that Columbia SC mortgage rates are moving higher, there's simply no time like the present to get started looking for a Columbia SC home.
Get more information as it pertains to Columbia SC mortgage rates in our section on Columbia SC Mortgage Info to your right under Columbia SC Real Estate Categories.
Remember, we also post tips daily on Twitter and Facebook. Check us out there as well.
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In our Columbia SC Real Estate News for March 2015:
Home Prices Up Year-Over-Year
Home prices across most of the country were down for December, but still faired better than they were a year ago.
Black Knight Financial Services released its latest Home Price Index Report this past week, which showed that home prices nationwide were down an almost-flat 0.1 percent in December. At the same time, 2014 ended with home prices doing 4.5 percent better than a year prior.
According to the report, the average home prices in the U.S. in December were around $241,000, up from $230,000 a year before and inching closer to the June 2006 peak of $268,000.
The Northeast and Midwest showed the most notable price drops in December, while a few metro areas actually showed rising home prices for the month.
It's not unusual to see home prices and sales drop off during December, as most people have their focus on the holidays. However, data suggests that's all about to change…
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Why Columbia SC Home Prices May be Ready to Lift Off
Data suggests that Columbia SC home prices are about to accelerate.
Earlier this week, the S&P/Case-Shiller Home Price Index, on a month-over-month nonseasonally adjusted basis, posted an increase for the first time since August. Winter's chill is beginning to thaw, even though old man winter is still clinging on in many areas. On a seasonally adjusted basis, the index posted its best price gain since 2014. Prices, however, are still more than 16 percent below their prerecession peaks.
A few things have been holding back Columbia SC home prices lately. For one, inventories have dried up a little, limiting choices. The National Association of Realtors (NAR) notes that families are staying in their homes longer, an average of 10 years vs. the long-term norm of seven years. Wage gains have also been lukewarm so far in the recovery, which is hampering first-time buyers. And evidence shows that student loan debt is limiting the ability of many Millennials to get a mortgage.
Yet positives are showing up.
The household formation rate has increased to its highest level since the housing bubble. New-purchase mortgage applications are inching higher, thanks to the recent decline in home loan interest rates. (See our next story below)
New first-time homebuyer affordability, according to the NAR, has returned to early 2014 levels. And thanks to deleveraging efforts — defaults, short sales and the like — household mortgage debt has returned to 2001 levels, according to data from the Federal Reserve.
While some hurdles still remain, including relatively tight mortgage credit conditions, Columbia SC home prices look ready to accelerate as winter — which has been brutal in much of the country — gives way to the summertime peak in housing activity. Plus, this year's prices could get a boost because relatively fewer homes are available. As Columbia SC home prices rise, new construction activity will follow, providing a lift to U.S. economic growth later this year.
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Columbia SC Mortgage Rates Rise for Third Straight Week
Columbia SC mortgage rates are still well below year-ago levels, but rates rose for the third consecutive week this past week.
Freddie Mac says the average rate on a 30-year fixed-rate mortgage rose to 3.80 percent in the week ending Feb. 26, up from 3.76 percent last week. A year ago, 30-year rates averaged 4.37 percent.
A 15-year fix averaged 3.07 percent this week, up from 3.05 percent. A one-year adjustable-rate mortgage averaged 2.44 percent, down from 2.45 percent.
Freddie Mac says rates rose this week, in part, on strong housing data. New home sales topped expectations in January, hovering near a six year high. The monthly S&P/Case-Shiller Home Price Index showed prices in December in the 20 largest cities were up an average of 4.6 percent from a year earlier.
Stay plugged in with us right here, and we'll keep you up to date on Columbia SC mortgage rates, as well as news affecting interest rates overall.
We're betting you thought lower Columbia SC gas prices could only mean positive things for the economy, right?
If you're in the market for a home mortgage, Columbia SC gas prices could be having an effect on the rate you can get.
How Columbia SC Gas Prices Affect Mortgage Rates
Believe it or not, oil investments and Columbia SC gas prices (along with lots of other things) have an indirect effect on mortgage rates.
One of the strongest predictors of mortgage rates is the yield on a 10-year Treasury note. Basically if the yield is low, so are mortgage rates. The buying of bonds can represent relative safety for oil investors, and what oil prices mean for the world's economy.
Oil prices, as well as Columbia SC gas prices, continues to fall in large part because there is less demand. Less demand comes via weakening economies across the globe. The lower oil prices may also disproportionately affect countries like Russia, which are already suffering from instability. All of this leads to a flight to quality, and the safe haven is almost always the U.S. Bond Market.
With Columbia SC gas prices dropping and no one quite sure when or where they'll stop, U.S. bonds give investors a certain comfort that the oil market isn't currently providing. (Treasury bonds will always be paid off to prevent the government from losing the confidence of its investors and creditors at home and abroad.)
The problem for these investors is that everyone has the same idea. If everyone starts buying bonds, it drives down yields because the government doesn't have to offer such a high rate of return to get people to buy. This, in turn, drives down mortgage rates.
Some economists believe the benefit to the housing market is largely indirect in the form of more consumer spending, leading to job and income growth and ultimately making it easier for people to buy homes.
It should be noted that the 10-year Treasury note only affects the base mortgage rate. A number of factors go into the actual interest rate a homebuyer can get, including their credit score, the number of points paid on the mortgage and the down payment amount.
We'll keep you informed on Columbia SC gas prices and how the price you pay at the pump could affect your mortgage rate. In the meantime, you can get more information about factors that control Columbia SC mortgage rates in our section on Columbia SC Mortgage Info to your right under Columbia SC Real Estate Categories.
Remember, we post tips daily to Twitter, and also on our Facebook Page. We'd love you to check us out there too.
According to the latest forecast from Freddie Mac's economists, Columbia SC mortgage rates are expected to hit 5 percent for a 30-year fixed rate loan in 2015.
Expect to see interest rates climb throughout 2015, with yields on the 10-year Treasury averaging about 2.9 percentage points, up from about 2.6 percentage points in 2014, and 30-year fixed Columbia SC mortgage rates mortgage gradually climbing, averaging 4.6 percent and rising to 5.0 percent by the end of next year.
Rising Columbia SC Mortgage Rates May Dampen Affordability
Meanwhile price increases are expected to slow from the 9.3 percent pace we saw in 2013, the 4.5 percent we saw this year, and 3.0 percent in 2015. Continued house price appreciation and rising Columbia SC mortgage rates will dampen homebuyer affordability.
Total housing starts in 2015 will increase by 20 percent and total home sales will increase by about 5 percent over that time period to the best sales pace in eight years.
Single-family originations will fall an additional 8 percent from 2014 to 2015 to $1.1 trillion annualized as increases in purchase-money lending are insufficient to offset a drop in refinance. Refinance is expected to make up just 23 percent of originations in 2015.
The good news for 2015 is that the U.S. economy appears well poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better. There are several reasons for the better economic performance. Governmental fiscal drag has turned into fiscal stimulus, lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development, and more upbeat consumer and business confidence, all of which portend faster economic growth in 2015.
With that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity. All of this according to Frank Nothaft, Freddie Mac vice president and chief economist.
With the forecast of higher Columbia SC mortgage rates on the horizon, there may never be a more affordable time to buy a home than right now. Talk to us about rates, and where prices are for Columbia SC housing. We're here to help.
Don't forget, we also post daily at Twitter, and Facebook as well. We'd love for you to check us out there as well.
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In our Columbia SC Real Estate News for November 2014:
Pending Columbia SC Home Sales Up Slightly in September
Pending Columbia SC home sales ticked up slightly in September after dropping in August, as it remained difficult to qualify for mortgage financing.
Nationwide, The National Association of Realtors' Pending Homes Sales Index, which is based on contracts signed for previously-owned homes, rose 0.3 percent over the past month to 105. Signings of existing homes were higher in September than year-ago levels, the first time in 11 months that year-over-year contracts have risen.
Housing supply for existing homes was up in September six percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year.
Tight credit and price increases through the middle of 2013 have limited buying activity. About 15 percent of the real estate agents surveyed for the index said they couldn't close deals because many buyers were unable to obtain a mortgage.
Pending Columbia SC home sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.
Ahead of next week's congressional election, the affordability woes even have something of a political tinge, according to new analysis by the real estate data firm Trulia.
In heavily Democratic communities, the median price for a home costs $227 per square foot. That's nearly double the price of $119 per square foot in areas that vote Republican. This has encouraged Democrats to loosen lending standards, while Republicans have largely opposed such measures for encouraging consumers to become highly leveraged.
When the Securities and Exchange Commission voted 3-2 recently to adopt new mortgages rules, the two Republican commissioners, Daniel Gallagher and Michael Piwowar, opposed adoption.
Because Democratic housing markets "are less affordable, have lower homeownership, and have greater income inequality, political leaders in Democratic-leaning and Republican-leaning metros may push for different policies," according to Jed Kolko, chief economist at Trulia.
Be sure to get out and vote on Tuesday!
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Columbia SC Mortgage Rates and Requirements
Columbia SC mortgage rates remain near historic lows, at or around 4 percent, give or take a fraction up or down.
Freddie Mac says the average rate on a 30-year fix in the week ending Oct. 30 was 3.95 percent, up from 3.92 percent the previous week. They're still near the lowest 30-year rates since June 2013. The record low for 30-year rates was 3.31 percent in late 2012.
As we continue to say each month when updating the Columbia SC mortgage rates here, if you're close to closing on a home, or have tight debt ratios/cash to close, lock in your rate and don't look back!
Meanwhile, Fannie Mae, Freddie Mac and their regulator the Federal Housing Finance Agency are close to an agreement that would allow them to buy mortgages made to borrowers with less-than-pristine credit and for purchases with as little as 3 percent down. The agreement would provide lenders who sell mortgages to Fannie and Freddie protections against later charges that they had knowingly made bad loans.
Critics warn that looser credit standards and lower down payments will only lead the industry into another crisis of borrowers unable to make payments, or homes that slip too easily underwater.
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Bond Tapering is Officially Over
Bond tapering is now officially over. The Federal Open Market Committee (FOMC) officially decided to conclude its more than two-year-old asset purchase program earlier this week due to the substantial improvement in the outlook for the labor market and strength in the broader economy.
The Fed's decision to end its third round of bond buying had been expected. It has gradually pared the purchases from $85 billion in Treasury and mortgage bonds each month to $15 billion. And the Fed had said it would likely end the program after its October meeting if the economy continued to improve, which they say it has.
Supporters have said the bond buying helped invigorate the economy and reduce the unemployment rate, which peaked at 10 percent during 2009, to the current 5.9 percent.
The Zero Interest Rate Policy, on the other hand, remains in full effect. The federal funds rate will maintain the current 0 to 1/4 percent target range.
The Fed has said it won't begin selling its holdings until after it starts raising short-term rates.
Most economists have predicted that the Fed's first rate hike won't occur until next summer. Some foresee no increase until fall, in part because of fears that the global economy is weakening and could threaten the U.S. economy.
Former Federal Reserve Chairman Alan Greenspan said he doesn't think the Fed can unwind years of extraordinary stimulus without causing turmoil in financial markets.
We'll be watching the markets closely for you to see how the end of the bond tapering will affect interest rates and mortgage availabilities going forward.