For the third week in a row, rates have dropped and the experts over at Freddie Mac say the signals all point to home purchase demand continuing to rise over the next few months. Rates are currently at 3.45% with .7% in fees and points for a thirty-year fixed rate mortgage.
The lowest on record was the week ending on November 21, 2012 when interest rates for a 30-year mortgage were at 3.31%.
One theory on what’s driving mortgage rates lower is, believe it or not, the coronavirus. How? Well, experts predict the coronavirus will begin to slow economic growth in China. That uncertainty brought down the 10-year treasury yield, which then brought down interest rates.
Mortgage applications increased from the week before by 5% and they’re up 11% from this time a year ago. Applications are currently at their highest levels since May 2013.
In other mortgage news, credit availability decreased in January. It wasn’t by much but the Mortgage Credit Availability Index fell by 2 basis points in January. This means that lending standards are getting stricter. This decline came from the reduction of low credit score, high-LTV programs.
The Texas Real Estate Center at Texas A&M University released their Texas Housing Insight Report. The big takeaways from the report are:
The numbers from 2019 show, at least to me, that growth was pretty controlled last year. I’d predict this year builds on that growth a little more since there was a lot of hesitation last year with buyers due to economic uncertainty. Rates appear to be a good driver of getting buyers back in the game for purchasing a home this year.
Jennifer Shannon is a Texas real estate agent and broker, licensed since 2006.