Home Mortgages: Rates Up, Requirements Easing

The media has extensively covered the rise in mortgage interest rates since last fall (from 3.42% last September to the current 4.1% according to Freddie Mac). However, a less covered aspect of the mortgage market is that requirements to get a mortgage have eased while rates have risen.

The Mortgage Bankers Association (MBA) quantifies the availability of mortgage credit each month with theirMortgage Credit Availability Index (MCAI). According to theMBA, the MCAI is:

“A summary measure which indicates the availability of mortgage credit at a point in time.”

The higher the index, the easier it is to get a mortgage. Here is a chart showing the MCAI over the last several months as rates have increased.

Have requirements for attaining a mortgage actually eased?

Yes. Here are two examples:

FICO® Score – the credit score which helps determine a buyer’s eligibility. The score required to attain a mortgage has been falling over the last five months:

Down Payment Requirement – the percentage of the purchase price necessary to place as a down payment on a home. To make this point, let’s look at the percentage of first-time buyers who have put less than 5% down over the last several years as compared to the 1st quarter of 2017:

Bottom Line

Whether you are a current homeowner looking to move to a home that will better serve your family’s current needs, or a first-time buyer looking for a starter home, it is easier to get a mortgage today than it has been at any other time in the last ten years.

Comments

Mortgage rates

Recently, Freddie Mac published an Insight Report titled Nowhere to go but up? How increasing mortgage rates could affect housing. The report focused on the impact the projected rise in mortgage rates might have on the housing market this year. Many believe that an increase in mortgage rates will cause a slowdown in purchases which would, in turn, lead to a fall in house values. Ultimately, however, prices are determined by supply and demand and while rising mortgage rates may slow demand, they also affect supply. From the report: “For current homeowners, the decision to buy a new home is typically linked to their decision to sell their current home… Because of this link, the financing costs of the existing mortgage are part of the homeowner’s decision of whether and when to move. Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market fin...

Staging is a very important part of selling a home

http://www.hgtv.com/shows/designed-to-sell/15-secrets-of-home-staging-pictures these are some of the homes that Mountain Realty Group have for sale.. contact Neva Waite at neva@lovewhereyoulive.com these are some of the homes that Mountain Realty Group have for sale.. contact Neva Waite at neva@lovewhereyoulive.com

47% of Existing Homeowners are worked that they will not be able to find a HOME

There is no doubt that the largest challenge in today’s housing market is a lack of housing inventory for sale. This challenge has beendefined as an “overwhelming lack of supply,”and even a “straight up inventory crisis.” First American just released the results of asurvey which sheds light on the reasons for the current lack of supply. The survey asked title agents and real estate professionals to identify what they believe are the top reasons for this lack of inventory in their markets. Here are the results of the survey: 47% – existing homeowners are worried that they will not be able to find a home to buy26.5% – first-time buyer demand is absorbing a large share of available homes11.3% – existing homeowners’ mortgage rates are lower than the current rates10.6% – insufficient or negative equity in the home4.6% – foreign buyer demand is absorbing a large share of available homes As the survey revealed, there is a shortage of current homeowners willing...

Mountain Realty Group

Search This Blog