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U.S Mortgage Rates Surge in Response to U.S Inflation Figures for December.

By Al_Sharpton_for_President follow Al_Sharpton_for_President   2022 Jan 16, 6:05am 1,080 views   55 comments   watch   nsfw   quote   share      


Mortgage rates have surged at the turn of the year and Freddie Mac expects demand to weaken as home prices continue to rise.

Mortgage rates were on the rise once more in the second week of 2022.

In the week ending 13th January, 30-year fixed rates surged by 23 basis points to 3.45%. 30-year fixed rates had risen by 11 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 9th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 80 basis points.

30-year fixed rates were still down by 149 basis points, however, since November 2018’s last peak of 4.94%.

Freddie Mac Rates

The weekly average rates for new mortgages as of 13th January were quoted by Freddie Mac to be:

30-year fixed rates jumped by 23 basis points to 3.45% in the week. This time last year, rates had stood at 2.65%. The average fee remained unchanged at 0.7 points.

15-year fixed rose by 19 basis points to 2.62% in the week. Rates were up by 46 basis points from 2.16% a year ago. The average fee rose from 0.6 points to 0.7 points.

5-year fixed rates increased by 16 basis points to 2.57%. Rates were down by 18 basis points from 2.75% a year ago. The average fee fell from 0.5 points to 0.3 points.

According to Freddie Mac,

All mortgage types saw rates rise, driven by the prospect of a faster than expected tightening of monetary policy.

The shift in sentiment was driven by a continued pickup in inflation exacerbated by uncertainty in labor and supply chains.

In spite of the rise in mortgage rates this year, purchase demand has yet to reflect the jump in rates.

Given the fast pace of home price growth, however, it will likely dampen demand in the near future.

Mortgage Bankers’ Association Rates

For the week ending 7th January, the rates were:

Average interest rates for 30-year fixed with conforming loan balances rose from 3.33% to 3.52%. Points decreased from 0.48 to 0.45 (incl. origination fee) for 80% LTV loans.

Average 30-year fixed mortgage rates backed by FHA increased from 3.40% to 3.50%. Points increased from 0.42 to 0.45 (incl. origination fee) for 80% LTV loans.

Average 30-year rates for jumbo loan balances increased from 3.31% to 3.42%. Points fell from 0.38 to 0.36 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by 1.4% from a week earlier. The Index had fallen by 2.7% from 2-weeks earlier.

The Refinance Index slipped by 0.1% in the week ending 7th January and was 50 basis points lower than the same week a year ago. The index had declined by 2% from 2-weeks ago. The refinance share of mortgage activity decreased from 65.4% to 64.1% in the week ending 7th January. The share had risen from 63.9% to 65.4% in the 2-weeks prior.

According to the MBA,

Mortgage rates increased significantly as the FED signaled tighter policy ahead, pushing yields higher.

30-year fixed hit 3.52%, its highest level since March 2020.

Rates at these levels are quickly closing the door on refinance opportunities for many borrowers.

Applications remained at their lowest level in over a month.

The housing market started 2022 on a strong note. However, the strength in growth will be dependent upon a more rapid growth in housing inventory to meet demand.

https://www.fxempire.com/news/article/u-s-mortgage-rates-surge-in-response-to-u-s-inflation-figures-for-december-867127?source=patrick.net



Comments 1 - 40 of 55   Next »    Last »

1   HunterTits   ignore (6)   2022 Jan 16, 6:51am     ↓ dislike (0)   quote          

I repeat:

HunterTits says
B.A.C.A.H. says
These folks signed up for about $30k/year in property taxes.


..to be only fucked up the ass even more.

The ONE thing that is guaranteed to crash housing prices in the Bay Area is rising interest rates.

And mortgage rates will be 4% to 4.5% by EOY. Trust me.

https://patrick.net/post/1343293/2022-01-11-mortgage-rates-spiking-at-fastest-pace-
2   Al_Sharpton_for_President   ignore (6)   2022 Jan 16, 6:55am     ↓ dislike (0)   quote          

Some folks think there will be a rush to buy to lock in lower rates. And so rising prices until sellers realize its about to hit the fan.



3   NDrLoR   ignore (1)   2022 Jan 16, 7:44am     ↓ dislike (0)   quote          

Al_Sharpton_for_President says
As a result, 30-year fixed rates held above the 3%
What a difference 40 years makes! On January 10, 1981, I closed on my condo with a fixed rate of 12-3/4%, $50K financed for 20 years. I considered myself lucky because it was fixed. A lot of people had to get adjustable rate mortgages and by the time it adjusted, it would cost them $100 or more a month. I lived there 24 years.
4   Blue   ignore (0)   2022 Jan 16, 9:45am     ↓ dislike (0)   quote          

Even after four(unlikely) .25% hikes still there is a wide gap of artificially low rate at 3.1+1% in the midst of raising inflation of 7+. Its scary but still cheap to barrow under the fed's fin engineering plan. I watched long enough that all the govs are corrupt and loot the savers and middle class.
5   FJB   ignore (8)   2022 Jan 16, 11:45am     ↓ dislike (0)   quote          

NDrLoR says
What a difference 40 years makes! On January 10, 1981, I closed on my condo with a fixed rate of 12-3/4%, $50K financed for 20 years.


Did you refinance when rates dropped?
6   Al_Sharpton_for_President   ignore (6)   2022 Jan 16, 2:43pm     ↓ dislike (0)   quote          

January is shaping up to be the most competitive month in housing history.

The median home sale price surged 16% year over year during the week ending January 9 to an all-time high of $365,000. Prices keep climbing because the supply drought keeps deepening while demand increases. The number of homes for sale fell to a new low as listings hit the market at a slower rate than they did early last year. Yet homebuyer activity–as measured by the Redfin Homebuyer Demand Index–jumped 9%. Mortgage rates rose to 3.45% during the seven days ending January 13, making homebuying more expensive as overall inflation hit a 40-year high.

“The stage is now set for the most competitive January housing market in recorded history,” said Redfin Chief Economist Daryl Fairweather. “Buyers are pouring into the market to claim a home before mortgage rates rise further as new listings slow to a trickle. The conditions are becoming increasingly challenging for first-time homebuyers, who will have to compete against more experienced buyers who are willing to do whatever it takes to win. But I expect that by the time mortgage rates increase to 3.6%, competition will settle down quickly to levels similar to late-2018.”

“Homebuyers are touring nearly every home that comes on the market, waiving every contingency, offering $100,000 over asking price, and still losing out to 9+ other offers,” said Portland Redfin real estate agent Jennifer Ciacci. “As competitive as the market is right now, I advise buyers not to write an offer on a home they don’t really like. The home needs to work for what they want and need, and if it checks off those boxes, that’s when you go all-in and take your best shot. But protect your heart; this isn’t an easy market.”

Key housing market takeaways for 400+ U.S. metro areas:

Unless otherwise noted, the data in this report covers the four-week period ending January 9. Redfin’s housing market data goes back through 2012.

Data based on homes listed and/or sold during the period:

The median home-sale price increased 14% year over year to $358,801. For the seven-day period ending January 9, the median price hit $365,000, up 16% from a year earlier and an all-time high.

The median asking price of newly listed homes increased 12% year over year to $344,190.

Pending home sales were up 2.5% year over year.

New listings of homes for sale were down 11% from a year earlier.

Active listings (the number of homes listed for sale at any point during the period) fell 28% year over year, dropping to an all-time low of 461,000.

The share of homes that went under contract that had an accepted offer within the first two weeks on the market was 39%, above the 34% rate of a year earlier.
29% of homes that went under contract had an accepted offer within one week of hitting the market, up from 25% during the same period a year earlier.

Homes that sold were on the market for a median of 27 days, down from 35 days a year earlier.

41% of homes sold above list price, up from 33% a year earlier.

On average, 2.4% of homes for sale each week had a price drop, up 0.4 percentage points from the same time in 2021.

The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, was 100.3%. In other words, the average home sold for 0.3% above its asking price.

Other leading indicators of homebuying activity:

Mortgage purchase applications increased 2% week over week (seasonally adjusted) during the week ending December 31. For the week ending January 13, 30-year mortgage rates rose to 3.45%, the highest level since March 2020.

The Redfin Homebuyer Demand Index rose 9% during the week ending January 9 and was up 22% from a year earlier. The seasonally adjusted Redfin Homebuyer Demand Index is a measure of requests for home tours and other home-buying services from Redfin agents.

Refer to our metrics definition page for explanations of all the metrics used in this report.

https://www.redfin.com/news/housing-market-update-new-high-home-price-january/?source=patrick.net
7   NDrLoR   ignore (1)   2022 Jan 16, 8:26pm     ↓ dislike (0)   quote          

just_passing_through says
Did you refinance when rates dropped?
No, I didn't want to fool with all the hassle.
8   Eman   ignore (0)   2022 Jan 16, 9:22pm     ↓ dislike (0)   quote          

Just checked with my Credit Union. 2.875% for 30 years fixed with no points. If the Fed is raising rates this year, I guess 30-year fixed mortgage will likely stay below 4%. Probably around 3.5-3.75% at the most.

9   Eman   ignore (0)   2022 Jan 16, 9:31pm     ↓ dislike (0)   quote          

I’m in the process of refinance a 4-plex in San Jose, and these are the terms that were offered to me.

7/1 ARM IO (interest only) loan for 3.05%
10/1 ARM IO loan for 3.25%
No points.

Money is really cheap. I can see why people are paying stupid prices for real estate, but I wouldn’t. These prices don’t make any sense to me.

I already said this before. Retail buyers are the ones who drive up real estate prices, not investors. We investors want cheap real estate prices so don’t bark on the wrong tree.

10   FJB   ignore (8)   2022 Jan 17, 10:22am     ↓ dislike (0)   quote          

NDrLoR says
No, I didn't want to fool with all the hassle.


You and my baby sis.
11   joshuatrio   ignore (0)   2022 Jan 17, 10:52am     ↓ dislike (0)   quote          

The areas we've been looking at in Florida have pretty much stalled.

I've seen a surge in listings in St Augustine as well.

I don't know if it'll collapse per say, but I think it's Flatlined for sure. I think July was peak.
12   Booger   ignore (8)   2022 Jan 17, 11:06am     ↓ dislike (0)   quote          

joshuatrio says
I've seen a surge in listings in St Augustine as well.


There is a shitload of buildable land in St John's and Flagler county. And lots of building going on in the area as well. Any seasoned real estate investor will tell you to not buy in an area where there is lots of building.
13   NDrLoR   ignore (1)   2022 Jan 17, 2:22pm     ↓ dislike (0)   quote          

just_passing_through says
Did you refinance when rates dropped?
I had only financed $25K since I'd put 50% down. It was 6463 Bordeaux, 75209. The last time it sold it went for over $200K, 1027 square feet. https://www.zillow.com/homes/6463-bordeaux-75209_rb/26904170_zpid/?source=patrick.net
14   Shaman   ignore (2)   2022 Jan 17, 3:56pm     ↓ dislike (0)   quote          

NDrLoR says
Al_Sharpton_for_President says
As a result, 30-year fixed rates held above the 3%
What a difference 40 years makes! On January 10, 1981, I closed on my condo with a fixed rate of 12-3/4%, $50K financed for 20 years. I considered myself lucky because it was fixed. A lot of people had to get adjustable rate mortgages and by the time it adjusted, it would cost them $100 or more a month. I lived there 24 years.


Inflation adjusted, in real current dollars your condo was bought for $200k. At 12% interest, PITI would be about $2300/month. Can you TOUCH any real estate in California for $200k? It was a different time and people who bought houses back then were incredibly fortunate. Today that same condo would be $650k if not more. And the payment would be $3500 with 20% down.

Given that this condo was in Texas which still has normal housing prices, but anyway. California sucks
Things are so much worse now.
15   EBGuy   ignore (1)   2022 Jan 17, 7:35pm     ↓ dislike (0)   quote          

Eman says
These prices don’t make any sense to me.

A duplex in my hood sold for over $800 /sq.ft. I imagine they'll put an ADU in the backyard, but still... seems kinda crazy.
16   Eman   ignore (0)   2022 Jan 17, 8:58pm     ↓ dislike (0)   quote          

If we thought the 2006-2007 housing bubble was big, check out this one.
17   Blue   ignore (0)   2022 Jan 17, 9:28pm     ↓ dislike (0)   quote          

Eman says
If we thought the 2006-2007 housing bubble was big, check out this one.


Not sure how this works out but I thought printing $nT is to cover up all the bubbles.
19   Bitcoin   ignore (18)   2022 Jan 26, 2:09pm     ↓ dislike (0)   quote          

after Powell's comments today, do the people who hope for 10% mortgage rates still think this we happen in our lifetime?

I'll ask the same question after each future FED meeting :)
20   Booger   ignore (8)   2022 Jan 26, 2:24pm     ↓ dislike (0)   quote          

Bitcoin says
after Powell's comments today, do the people who hope for 10% mortgage rates still think this we happen in our lifetime?



No. But it would be nice if we had normal rates instead of near zero rates.
21   Tenpoundbass   ignore (15)   2022 Jan 26, 2:24pm     ↓ dislike (0)   quote          

Eman says
If we thought the 2006-2007 housing bubble was big, check out this one.


I can't wait for this bubble to pop, because they all do. Also all of these RE investors, that are over leveraged with every SF home they could by to rent out. Many paid retail prices, unlike the folks that got the exclusive secret deals on the 2008-2010 Ghost inventory. For the last 10 years, it's been the investors driving the bidding wars against the first time home buyers.
22   WineHorror1   ignore (1)   2022 Jan 26, 2:50pm     ↓ dislike (0)   quote          

Booger says
joshuatrio says
I've seen a surge in listings in St Augustine as well.


There is a shitload of buildable land in St John's and Flagler county. And lots of building going on in the area as well. Any seasoned real estate investor will tell you to not buy in an area where there is lots of building.

Why not?
23   Bitcoin   ignore (18)   2022 Jan 26, 3:01pm     ↓ dislike (0)   quote          

WineHorror1 says
Any seasoned real estate investor will tell you to not buy in an area where there is lots of building


Why?
Many cities cant keep up building enough homes due to a severe shortage. Who knows how long this trend will last?
24   Bitcoin   ignore (18)   2022 Jan 26, 5:47pm     ↓ dislike (0)   quote          

Booger says
No. But it would be nice if we had normal rates instead of near zero rates.


In Europe they have 1 - 1.75% mortgage rates. What's normal nowadays?
25   Patrick   ignore (0)   2022 Feb 4, 5:40pm     ↓ dislike (0)   quote          

https://palaceintrigue.substack.com/p/low-interest-rates-are-the-root-of?source=patrick.net


Low Interest Rates Are the Root of All Economic Evil
And YOU are about to pay the price.
26   HunterTits   ignore (6)   2022 Feb 4, 7:17pm     ↓ dislike (0)   quote          

Patrick says
Low Interest Rates Are the Root of All Economic Evil
And YOU are about to pay the price.


He gets a lot wrong. Like how we must begin immediately reshoring manufacturing. We have been. First under Trump and now accelerated because of COVID. And the collapse of the globalist world order will make this permanent. America is in a period of reindustrialization not seen since WW2.

But he's right about the debt.
27   WineHorror1   ignore (1)   2022 Feb 4, 7:56pm     ↓ dislike (0)   quote          

HunterTits says
Patrick says
Low Interest Rates Are the Root of All Economic Evil
And YOU are about to pay the price.


He gets a lot wrong. Like how we must begin immediately reshoring manufacturing. We have been. First under Trump and now accelerated because of COVID. And the collapse of the globalist world order will make this permanent. America is in a period of reindustrialization not seen since WW2.

But he's right about the debt.

The globalist world order is in collapse?
28   Ceffer   ignore (6)   2022 Feb 4, 7:56pm     ↓ dislike (0)   quote          

No more fwapping to my fiat appreciation? NOOOOOOOOOOOoooooooooo!
29   HunterTits   ignore (6)   2022 Feb 4, 8:34pm     ↓ dislike (0)   quote          

WineHorror1 says
The globalist world order is in collapse?


Yup. Going to take 5 years. Covid accelerated the process.

The Order requires ongoing active US support. That's no longer happening notwithstanding the goons running the Biden shit show.
30   PeopleUnited   ignore (3)   2022 Feb 4, 10:02pm     ↓ dislike (0)   quote          

Don’t get cocky, what if the globalists eliminate or severely cripple the US and move on with their plans unhindered by American Exceptionalism.
31   clambo   ignore (4)   2022 Feb 5, 8:12am     ↓ dislike (0)   quote          

The Fed lending rate and stock margin % can be controlled by the Federal Reserve.
However, to “control” the prices of US Government debt in the worldwide auction called the “bond market” requires the Federal Reserve to buy a ton of it.

They cannot do this forever, they own a lot of it already.

Mortgage rates rising will slow down the rise of house prices, which rose quickly lately.

Low interest rates are not a bad thing, neither are a low price of oil or low taxes.
32   HeadSet   ignore (2)   2022 Feb 5, 8:53am     ↓ dislike (0)   quote          

clambo says
Low interest rates are not a bad thing

Yes, low interest rates are a bad thing. Easy credit has bid up the price of housing and education, and has devastated savers. Responsible consumers must compete with irresponsible adolescent types who do not care about taking on absurd debts, just so long as they can have it now.
33   Bitcoin   ignore (18)   2022 Feb 5, 9:03am     ↓ dislike (0)   quote          

clambo says
Mortgage rates rising will slow down the rise of house prices, which rose quickly lately.

Low interest rates are not a bad thing


yep, housing bears hope that a rate increases will reduce RE prices. However, RE prices will continue to rise but the growth rate slows which is healthy for the market.
First time home buyers are f'ed as the increase in rates and the increase in prices will continue to crush their affordability.

I know a guy who sold his house before covid and rented since then because he thought he can time the market. Worst decision in his life time. The house he sold exploded in price since covid while his rent went up as well. Now he cant afford to buy the same house he sold 3 years ago. He lost big time by sitting on cash. It hurts him so much that he cant even talk about it anymore. Some people only learn the hard way:

>>Time in the market beats timing the market<<
34   clambo   ignore (4)   2022 Feb 5, 10:01am     ↓ dislike (0)   quote          

Sitting on cash is about as useless as it can get.
35   AmericanKulak   ignore (1)   2022 Feb 5, 10:10am     ↓ dislike (0)   quote          

Bitcoin says

yep, housing bears hope that a rate increases will reduce RE prices. However, RE prices will continue to rise but the growth rate slows which is healthy for the market.
First time home buyers are f'ed as the increase in rates and the increase in prices will continue to crush their affordability.


Most people, and almost all first time buyers, buy the monthly payment, not the total price.
36   RedStar   ignore (0)   2022 Feb 5, 10:11am     ↓ dislike (0)   quote          

The lower end of RE will never drop in our lifetime. You simply can't build the lower end homes anymore because the construction costs are too high. I see no end to that.
The Bay area however could definitely take a nosedive. All real estate is locaL
37   HunterTits   ignore (6)   2022 Feb 5, 10:22am     ↓ dislike (0)   quote          

PeopleUnited says
Don’t get cocky, what if the globalists eliminate or severely cripple the US and move on with their plans unhindered by American Exceptionalism.


They can not maintain the world order let alone expand it w/o the US.
38   PeopleUnited   ignore (3)   2022 Feb 5, 12:06pm     ↓ dislike (0)   quote          

HunterTits says
PeopleUnited says
Don’t get cocky, what if the globalists eliminate or severely cripple the US and move on with their plans unhindered by American Exceptionalism.


They can not maintain the world order let alone expand it w/o the US.




When you start to think you are all powerful and irreplaceable...


39   WineHorror1   ignore (1)   2022 Feb 5, 12:18pm     ↓ dislike (0)   quote          

HunterTits says
WineHorror1 says
The globalist world order is in collapse?


Yup. Going to take 5 years. Covid accelerated the process.

The Order requires ongoing active US support. That's no longer happening notwithstanding the goons running the Biden shit show.

Why would the globalists bring about the Covid scam if it didn't play into their plans?
40   WineHorror1   ignore (1)   2022 Feb 5, 12:20pm     ↓ dislike (0)   quote          

HeadSet says
clambo says
Low interest rates are not a bad thing

Yes, low interest rates are a bad thing. Easy credit has bid up the price of housing and education, and has devastated savers. Responsible consumers must compete with irresponsible adolescent types who do not care about taking on absurd debts, just so long as they can have it now.

Yeah, aren't low rates currency devaluation?

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