Even with the coronavirus taking a wrench to the economy, many San Diego housing analysts have said low mortgage rates and demand will continue to drive the housing market.
But, what happens when mortgage rates go up?
In the past few weeks, rates for a 30-year, fixed-rate mortgage have fluctuated wildly — making monthly payments on an expensive San Diego County home go up or down by hundreds of dollars.
The rate was 3.37 percent Monday morning, said Mortgage News Daily, but was up to 4.15 percent two weeks ago.
For now, it appears unlikely that millions of sheltered Americans are going to be shopping much for homes. Also, many have lost jobs. Still, for those trying to purchase, navigating interest rates will take some work.
Tucker also said lenders don’t have as much incentive to try and fight for customers with lower rates when customers are calling them nonstop.
Mortgage rates usually follow the yields on mortgage-backed securities. These bonds typically track the yield on the U.S. 10-year Treasury.
Tucker said if the 10-year Treasury yield remains under 1 percent, the secondary market for mortgages stays healthy and the backlog of applications gets processed, it is possible mortgage rates will drop again to historic lows.
read more at: https://www.sandiegouniontribune.com/business/real-estate/story/2020-03-31/mortgage-rates-are-all-over-the-place-what-it-means-for-san-diego-real-estate
The average 30-year fixed mortgage rate started 2019 at 4.68% and steadily declined before closing out the year at 3.93 percent. In 2020, rates are expected to remain mostly stable, not straying too much higher or lower from the 4% mark.
Here are responses from a range of experts predicting what will happen to mortgage rates in 2020.
Expect mortgage rates to remain low
Greg McBride, CFA, Bankrate chief financial analyst, predicts mortgage rates will stay relatively stable around 4% in 2020.
“The benchmark 30-year fixed rate mortgage will hopscotch back and forth over the 4% mark for much of 2020, remaining low enough to facilitate homebuying and providing ample refinancing opportunities on those trips below 4 percent,” he says.
Since the end of June 2019, interest rates for the 30-year fixed-rate mortgage have stayed south of the 4% mark. They hit their lowest point on Sept. 4, dropping to 3.74 percent, according to Bankrate data. These historically low rates have helped homeowners save money by refinancing and made it easier for folks to afford to buy a house.
read more at: https://www.bakersfield.com/ap/news/natalie-campisi-mortgage-rate-forecast-for-experts-predict-low-rates/article_e8d24523-a035-5686-9c25-fb91cc46de5e.html
Mortgage debt has increased to $9.44 trillion according to the latest Quarterly Report on Household Debt and Credit from the New York Federal Reserve. Household debt in total increased by $92 billion (0.7%) to $13.95 trillion in Q3 2019. This is the 21st consecutive quarter with an increase, and the total is now $1.3 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008.
Mortgage balances—the largest component of household debt—rose by $31 billion in the third quarter to $9.44 trillion. Balances on home equity lines of credit (HELOC), which have been declining since 2009, fell by $3 billion this quarter, bringing the aggregate outstanding balance to $396 billion.
“New credit extensions were strong in the third quarter of 2019, with auto loan originations reaching near-record highs and mortgage originations increasing significantly year-over-year,” said Donghoon Lee, research officer at the New York Fed. “The data suggest that households are taking advantage of a low-interest rate environment to secure credit.”
Credit standards tightened slightly in the third quarter of 2019, with the median credit score of newly originating mortgage borrowers rising to 765, a 6-point increase from the previous quarter.
The New York Fed also notes that flows into delinquency among mortgage loans were mostly unchanged from the previous quarter, and foreclosures remain very low by historical standards. Approximately 65,000 individuals had a new foreclosure notation added to their credit reports between July 1- September 30, 2019. As of June 2018, CoreLogic notes that the national share of mortgages that were in some stage of delinquency was 4% in June 2019—a 0.3 percentage point decline, compared to last year’s 4.3%.
The share of mortgages that are delinquent more than 90 days fell from 1.2% to 0.9%, and the percentage of mortgages that were more than 120 days delinquent dropped to 1% from 1.4% in June 2018.
read at: https://dsnews.com/daily-dose/11-14-2019/mortgage-debt-hits-new-highs