Residential financing impacts housing market growth, sentiment
Posted on Wednesday, August 27, 2014 at 3:23:20 PM
Why aren't there more homes for sale across the country? A larger inventory of real estate is a big reason behind housing market success, and as potential buyers struggle to find properties - and enter bidding wars when they do - the overall economic growth may be more limited than it otherwise could be.
According to HousingWire, many homeowners may be concerned about residential financing rates. Fear of ending up with more costly mortgages than their current ones could be one cause for a smaller inventory of homes for sale, but it is likely not the entire picture.
Freddie Mac's recent figures put the 30-year fixed rate mortgage at 4.10 percent for the week ending Aug. 21, a low point so far in 2014. The 15-year FRM averaged 3.23 percent during that time.
In addition, the Mortgage Bankers Association reported that interest in residential financing is on the rise. In its Weekly Mortgage Applications Survey, the MBA noted that applications ticked up 2.8 percent on a weekly basis in late August. Refinancing comprised 56 percent of the total mortgage share, while adjustable-rate mortgages made up only 8 percent of total residential financing applications.
In a separate report, Freddie Mac explained that improvements to the U.S. housing market are continuing, but at a slow pace. On a local basis, many smaller economies are gaining ground much faster, with 13 of the 50 states considered "stable."
"As we see the economy slowly normalizing we're starting to see its effects in the housing market as well, albeit very slowly," said Frank Nothaft, chief economist at Freddie Mac. "The good news is the big housing markets, of which some were also the hardest hit, continue to improve."
Overall, the U.S. housing market is getting better and mortgage rates are still relatively affordable. Hopefully, these trends will continue, and more people will be motivated to buy and sell homes.