Dec. 2, 2020

It’s Over: Florida Fairly Lucky as 2020 Hurricane Season Ends

The most active season on record ended at midnight. Strong storm activity, notably in the latter half, still sent storms largely away from Sunshine State shores.

TALLAHASSEE – The most-active hurricane season on record ended yesterday, and Florida overall has been relatively lucky.

The 2020 Atlantic season, which on the calendar ended Monday, has put up 30 named storms – requiring the use of the auxiliary Greek alphabet for the second time ever. It included 13 hurricanes, of which six were categorized as “major” storms, with winds over 111 mph. That included one with 160 mph winds before Hurricane Iota made landfall Nov. 16 in Nicaragua.

However, in a season that overlapped the coronavirus pandemic, most storms spun away from Florida.

“I’d say it’s luck,” National Weather Service meteorologist Mark Wool said. “There really isn’t any one particular thing that we can hang our hat on and say, ‘Well, this is what protected Florida this year.’ It just happened to be the positioning of the steering currents.” Various systems developed, but the currents “continuously steered them into the Gulf of Mexico as opposed to approaching from the east.”

But just because the season officially ended, don’t expect the tropics to be quiet.

“I would not be at all surprised if we have another one or maybe even two named systems that develop between now and when we are finally said and done,” Wool, who works in Tallahassee, said. “We have already established all sorts of records for this season, including the most named storms on record.”

Four of the named storms touched Florida, but only what had been Hurricane Eta made direct landfall in the state. In fact, Eta technically twice made landfall, south of Islamorada in Monroe County on Nov. 9 and near Cedar Key in Levy County on Nov. 12. In each instance, Eta hit the state with tropical-storm force winds.

The most memorable of this year’s storms for Florida was Hurricane Sally, which crossed the southern end of the peninsula as a depression before making landfall Sept. 15 near Gulf Shores, Ala. Sally brought massive storm surge and flooding to the western Panhandle, including in Pensacola. Among other things, the storm led to damage on the Pensacola Bay Bridge after a barge broke loose because of heavy surf.

Sally also was responsible for three deaths in Florida, while crop, livestock and aquaculture losses have been estimated between $55 million and $100 million by University of Florida economists.

Also this season, a disturbance crossed the Panhandle in July that later grew into Tropical Storm Fay off the coast of Georgia. And August opened with Isaias running north off Florida’s East Coast as a strong tropical storm.

But none of this year’s storms brought the tension Hurricane Dorian created along the East Coast in 2019, the carnage Hurricane Michael inflicted on the Panhandle in 2018 or the sweeping damage Hurricane Irma left across much of the state in 2017.

Meanwhile, Louisiana had five landfalls this year, and this year’s season was so active that the National Hurricane Center issued storm watches and warnings at some point for all but one county or parish along the Gulf and Atlantic coasts, from the Mexico border to Maine. The one county without a watch or warning? Wakulla, part of the Big Bend region south of Tallahassee.

Wool called that simply an “astounding coincidence.” The Big Bend also was the least storm-impacted region along the Atlantic and Gulf coasts, according to the National Weather Service.

The six-month hurricane season officially started June 1, but there had already been two named storms – both off the Carolinas – before that date.

Florida disaster-management workers had been at an elevated level of preparedness for three months before the hurricane season because of the coronavirus pandemic. They also had to modify hurricane plans on issues such as evacuations, shelters and arrangements for relief crews because of the pandemic.

Wool said some of those changes are expected to carry over whenever the pandemic is eventually considered under control.

“We were really trying to get people to think critically about, ‘Do you really need to evacuate?’” Wool said. “And if you do, try to seek out family or friends versus a public shelter, because those shelters were not going to be able to hold as many people due to social distancing concerns.”

Nov. 24, 2020

Demand for Second Homes Up 100% Year-to-Year

The number of people who locked-in mortgage rates for second homes – in spite of a pandemic-caused economic dip – suggests a K-shaped recovery.

SEATTLE – Sales of vacation homes are soaring, even as millions of Americans grapple with financial devastation triggered by the coronavirus pandemic. In October, demand for second homes skyrocketed 100% from a year earlier – the fourth triple-digit increase in the last five months, according to a new report from Redfin.

The second-home demand outpaced the 50% increase in demand for primary homes.

For its report, Redfin analyzed mortgage-rate lock data from real estate analytics firm Optimal Blue. When homebuyers lock in a mortgage rate for a certain period of time, they’re assured that rate won’t change. And when applying, they must specify whether they plan to use the money for a primary home, secondary home or investment property. Of all rate locks, about 80% result in a property purchase.

Home sales are rising across the board due to record-low mortgage rates and a wave of relocations during the pandemic, but demand for second homes is particularly strong as affluent Americans work remotely, no longer need to send their kids to school in person and face travel restrictions, says lead economist Taylor Marr.

“With mortgage rates at all-time lows and offices shut down across the country, the dream of having a second home outside of the city is becoming a reality for many wealthy Americans,” Marr said. “Unfortunately, at the same time, millions of less-fortunate families are behind on their mortgage or rent payments due to financial hardship brought on by the coronavirus pandemic.”

Some of the second homes purchased this year will ultimately turn into primary homes, since it’s common for a buyer to close a deal on a second home before putting their current house on the market, Marr says.

As second-home purchases soar during the pandemic, resort towns report increased sales and demand. Melissa Killham, a Redfin agent in Wisconsin, said that she’s seen demand surge in Lake Geneva – a popular resort town about an hour southwest of Milwaukee.

“The home-tour rate in Lake Geneva has doubled – people from the city can’t travel for vacation so they’re looking for second homes,” she says. “The Lake Geneva school district is also still offering in-person learning, so a lot of families are buying second homes in the area so they can work remotely and send their kids to school.”

The median sale price in seasonal towns grew 21% year-over-year in October to $420,000, outpacing the 14% growth in non-seasonal towns. Redfin defines a seasonal town as a town where more than 30% of housing stock is used for seasonal, recreational or occasional purposes.

“Even when offices reopen, folks will be able to spend more time than ever before in their second homes because many employers will continue to offer flexible remote-work policies,” Marr says. “With workers still commuting in one or two days a week, resort towns that are near major cities will likely continue to heat up.”

 

Nov. 20, 2020

Florida's Housing Market: Sales, Median Prices, New Listings Up in October

Florida Realtors’ data: Single-family home sales up 26.9% year-over-year, median sales price up 15.6%; condo sales up 30.3%, median price up 15.9%. Chief Economist O’Connor: Strong and persistent demand, coupled with worsening inventory shortages, continued to drive up home values.

ORLANDO, Fla. – Florida’s housing market continued to be a bright spot for the state’s economy in October, even as the coronavirus pandemic showed no signs of easing. More closed sales, more new pending sales, higher median prices and more new listings were recorded statewide last month compared to October 2019, according to Florida Realtors® latest housing data. Single-family existing home sales rose 26.9% compared to a year ago.

“Housing is an essential need, and there is strong demand from buyers despite the ongoing pandemic – and perhaps even sparked by the fact that our homes have become more important than ever this year,” says 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “But increasing constraints on the inventory of for-sale homes in Florida is making it more and more difficult for buyers, and putting pressure on rising prices, which in turn impacts affordability. In October, the statewide inventory for single-family existing homes was at the record low of a 2.1-months’ supply, while the inventory for existing condos dropped to a record low of a 4.9-months’ supply.”

In October, closed sales of single-family homes statewide totaled 29,659, up 26.9% year-over-year, while existing condo-townhouse sales totaled 12,110, up 30.3% over October 2019. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in October for 106 consecutive months. The statewide median sales price for single-family existing homes was $305,000, up 15.6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $221,000, up 15.9% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to Florida Realtors Chief Economist Dr. Brad O’Connor, “the strong and persistent level of demand seen throughout the state, coupled with worsening inventory shortages, continued to drive up home values in October.”

He added, “This is probably a good time to remember, however, that while rising median sale prices are almost always indicative of general home price appreciation, they can also be driven upward by a change in the mix of homes that are selling. For example, if starter homes made up a larger share of the homes that sold last year, while luxury homes made up a larger share of those sold this year instead, then of course we’d expect the median – or middle – sale price out of those sales to be pulled upward from last year to this year. And something like this is definitely happening this year, as luxury homes have been selling in abundance relative to last year.”

But that factor is only responsible for part of the rise in median prices, according to O’Connor.

“A good share of these increases is still being driven by good, old-fashioned price appreciation – especially among single-family starter homes, which are increasingly difficult to find on the market,” he said.

New listings statewide increased year-over-year in both property type categories in October, up by 1.6% for single-family existing homes and 3.4% for condo and townhouse units.

On the supply side of the market, inventory (active listings) tightened even more in October.

“Active listings of single-family homes continued to fall throughout October, although the rate of decline was not as steep as we’ve seen in previous months, going back to April,” said O’Connor. “Still, at the end of the October, the statewide inventory of single-family homes was sitting at a multi-year low, close to 39.4% below where it was at the same point in time last year. Condo and townhouse inventory, by contrast, was only down by about 11.8% year-over-year at the end of the month.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.83% in October 2020, down from the 3.69% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to the Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

Nov. 19, 2020

Home Construction Increased 4.9% in October

The increase follows a more modest 1.9% increase in Sept. Building permits – a sign of future activity – remained steady in Oct. but are still up 2.8% year-to-year.

CHARLOTTE, N.C. (AP) – Home construction rose 4.9% in October as home building remains as one of the bright spots of the economy.

The increase pushed home construction to a seasonally adjusted annual rate of 1.53 million homes and apartments and followed a more modest gain of 1.9% in September.

Building permits, a good barometer of future activity, remained at a seasonally adjusted rate of 1.55 million annualized units, effectively unchanged from September. The figure remains up 2.8% from a year earlier, showing how strong the housing market was over the summer despite the pandemic.

Several reports over the last two months have shown the housing market cooling off after a tremendous summer, but that is not surprising. The fall and winter are typically slow times for home buying and home construction, mostly due to the weather.

Nov. 18, 2020

Builder Confidence at Record High, 6% Above Previous Record

Builders are almost giddy. An Index of 50 suggests a balance between optimism and pessimism, but Nov.’s confidence number hit 90 after a record-breaking 85 in Oct.

WASHINGTON – Calling it “another sign that housing continues to lead the economy forward,” builder market confidence for newly-built single-family homes increased five points to 90 in November. It shattered the previous record of 85 set in October, according to the latest NAHB/Wells Fargo Housing Market Index (HMI).

Builder confidence levels hit successive all-time highs in each of the past three months.

“Historically low mortgage rates, favorable demographics and an ongoing suburban shift for homebuyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a year-to-date basis,” says NAHB Chairman Chuck Fowke. “Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”

“Another record high for the HMI reflects that housing is a bright spot for the economy,” adds NAHB Chief Economist Robert Dietz. “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front. In the short run, the shift of housing demand to lower density markets such as suburbs and exurbs with ongoing low resale inventory levels is supporting demand for home building.”

NAHB adds one caveat to the November report: 69% of the builders’ responses for this survey arrived before the media called the election for president on Nov. 7. Attitudes about the election results will be more fully reflected in December’s HMI report.

All HMI indices posted their highest readings ever in November. The HMI index gauging current sales conditions rose six points to 96, the component measuring sales expectations in the next six months increased one point to 89, and the measure charting traffic of prospective buyers rose three points to 77.

Looking at the three-month moving averages for regional HMI scores, the Northeast increased two points to 83, the Midwest jumped six points to 80, the South rose four points to 86 and the West increased four points to 94.

Derived from a monthly survey that NAHB has been conducting for 35 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Nov. 13, 2020

Florida's Housing Market in 3Q 2020 Shows Strength Amid Pandemic

Florida Realtors’ data: Single-family home sales up 13.7% year-over-year, condo sales up 13.5%; 3Q median sales price up 13.2% in both categories. Chief Economist O’Connor cites pent-up buyer demand and record-low mortgage rates as “driving factors.”

ORLANDO, Fla. – Florida’s housing market reported strong gains in the third quarter of 2020 even as the coronavirus pandemic continued, with more closed sales, rising median prices, more new listings and more new pending sales compared to 3Q 2019, according to the latest housing data from Florida Realtors®.

Closed sales of single-family homes statewide totaled 89,562 in 3Q 2020, up 13.7% from the 3Q 2019 level; closed sales of condo-townhouse properties totaled 33,523, up 13.5% compared to 3Q 2019. Closed sales typically occur 30 to 90 days after sales contracts are written.

Quarterly data figures normally offer a good look into prevailing economic and market trends, according to Florida Realtors Chief Economist Dr. Brad O’Connor.

On the heels of a weak spring buying season brought about by the COVID-19 pandemic, closed sales of existing homes surged throughout the U.S. in the third quarter of 2020, and Florida was no exception,” he says. “And while the release of pent-up demand from spring certainly played a major role in this resurgence, it’s likely that the most important driving factor has been the record-low mortgage rates we’ve been experiencing.”

O’Connor pointed out that closed sales of Florida single-family homes were up 13.7% year-over-year overall in the third quarter, but all-cash sales were only up 1.7%.

“It appears that owner-occupant buyers and investors alike seem to be taking advantage of these low mortgage rates,” he says. “Condos and townhouse sales, which were hit particularly hard in spring, made a strong recovery in the third quarter as well, rising by 13.5% year-over-year. Across the state, single-family closings were up year-over-year in all 22 Florida metro areas, while condo and townhouse sales only failed to rise in two metros.”

The statewide median sales price for single-family existing homes in 3Q 2020 was $299,900, up 13.2% from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $215,000, also up 13.2% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Supply and demand impacted home prices across the state, O’Connor notes. He explained, “Because new construction and new listings of existing homes are not keeping pace with the current rate of sales, we observed a substantial amount of home price appreciation in the third quarter.”

In 3Q 2020, the median time to a contract (the midpoint of the number of days it took for a property to receive a sales contract during that time) was 29 days for single-family homes and 46 days for condo-townhouse properties.

Inventory was at a 2.2-months’ supply in the third quarter for single-family homes and at a 5.1-months’ supply for condo-townhouse properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.95% for 3Q 2020, significantly lower than the 3.67% average reported during the same quarter a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

Nov. 12, 2020

FHA Proposes Private Flood Insurance Option

It would allow lenders to accept private flood insurance policies for single-family mortgages instead of NFIP insurance if coverage is required for FHA loan approval.

WASHINGTON – The Federal Housing Administration (FHA) has published a proposed rule on its website – a proposal to allow a private flood insurance option instead of insurance through the National Flood Insurance Program (NFIP), when FHA requires flood insurance.

The proposed changes would allow lenders to begin accepting private flood insurance policies for single family insured loans for homes located in Federal Emergency Management Agency-designated Special Flood Hazard Areas (SFHAs), consistent with similar provisions in use by other industry participants.

“Our proposal would expand the options for obtaining flood insurance, rather than continuing to lock in borrowers to one federal option without any ability to comparison shop,” says Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade. “We are also proposing important safeguards that will help protect borrowers, so their homes will have flood insurance coverage at a level at or above the level available through the National Flood Insurance Program.”

FHA is seeking public comment on a proposal to institute a compliance aid for private flood insurance policies that would allow lenders to rely on the compliance aid to determine if a private flood insurance policy meets FHA’s requirements. FHA anticipates between 3% and 5% of FHA borrowers could obtain a private flood insurance policy for their FHA-insured mortgage if this option becomes available.

“This proposal will remove yet another unnecessary regulatory barrier to doing business with FHA and can also reduce costs to the federal government-costs that are ultimately born by the taxpayer,” said Deputy Assistant Secretary for Single Family Housing Joe Gormley. “Allowing participation by private insurers should generate the competition needed to ultimately reduce costs for consumers.”

The proposed rule will be published in the Federal Register in the coming days and provide for a 60-day public comment period following publication. Comments should be submitted to FHA only through the methods specified in the notice to be published in the Federal Register.

Since this still only a proposal, FHA’s current flood insurance policies remain unchanged at this time, including the requirement that minimum flood insurance be obtained through NFIP.

© 2020 Florida Realtors®

Nov. 11, 2020

Record Year for VA Loans Creates Opportunities for Realtors

Florida Realtors’ economist: Florida celebrates Veteran’s Day today and all year. In 2020 so far, Fla. moved up a spot in VA loan rankings (to No. 2) after passing Texas. Across the U.S., the number of VA-backed loans has nearly doubled, with refinances leading the surge.

ORLANDO, Fla – Lending terms can make or break one’s ability to purchase a home. Realtors who understand the process are better equipped to handle any consumer who needs guidance.

One option for service members and veterans is the Veterans Administration (VA) home loan guaranty program. The Department of Veteran Affairs released a preliminary tally of their fiscal year 2020 data, starting Oct.1, 2019, and ending Sept. 30, 2020. Like most aspects of this year, the findings were unprecedented.

Loan volume doubled in 2020

Nationwide, total VA guaranteed loans nearly doubled. Florida shares a similar story, increasing from over 56,000 in 2019 to around 106,000 in 2020. The home loan guaranty program provides a range of opportunities, helping veterans with new and existing home purchases, refinancing and cashing-out equity to use for other expenses. The notable growth in both the number of loans and dollar volume varied greatly among categories. 

Refinances surge, mirroring conventional mortgages

It comes as no surprise to anyone hearing yet another announcement of mortgage rates continuing at record-low levels that consumers are pursuing the refinance option to save on their monthly mortgage payments. Doubling pales in comparison to the six-fold increase seen nationwide in the Interest Rate Reduction Refinancing Loan (IRRRL) category, used for refinancing existing VA guaranteed loans at a lower interest rate.

Florida gains were likewise fueled by a 650% increase in refinancing. To provide a different perspective, the IRRRL category generally represents a quarter or less of Florida’s total VA-backed loans each year – yet in 2020 it nearly accounted for half of them.

Purchase loans grew strongly

Not to be left out, total purchase loans used to buy, build or improve a newly bought home were up over 11% nationally. According to available state-level data, purchase loans have steadily increased each year since 2015 in Florida. The trend continued in 2020 with a nearly 12% increase.

Florida’s popularity and what it means

Florida tends to rank third: third most populous state, third most military bases and the third most popular state for veterans to reside in, following California and Texas. This year, the state pushed ahead of Texas with the second-highest number of VA guaranteed loans.

Five Florida counties had over 2,000 purchase loans this year:

  1. Hillsborough: 3,626 (up 34% year-over-year)
  2. Duval: 3,292 (up 12%)
  3. Okaloosa: 2,787 (up 14%)
  4. Santa Rosa: 2,131 (up 21%)
  5. Brevard: 2,126 (up 7%)

The popularity of VA loans isn’t limited to those counties. Florida strives to be a military-friendly state and will continue attracting veterans here to live and work. For Realtors, it is important to understand which buyers are eligible and how to guide them through the process.

Florida Realtors® Professional Development team offers continuing education (CE) credit for Navigating the VA Sales Process, or consider obtaining the National Association of Realtors® Military Relocation Professional designation to open doors to new customers.

Nov. 10, 2020

The Refinancing Boom Goes On As Rates Remain Low

Homeowners often save hundreds of dollars a month by refinancing at today’s record-low rates, and a new fee that kicks in on Dec. 1 won’t make a big difference.

NEW YORK – Hard to imagine, but all the noise in 2020 actually might have blocked out the sound of the refinancing boom for many people.

But homeowners who dragged their feet and have yet to refinance a mortgage might even snag a lower rate now than if they acted in January or February. The 30-year fixed-rate mortgage fell to another record low for the week that ended Nov. 5, hitting 2.78%, according to Freddie Mac. That’s down significantly from 3.69% for the same time a year ago.

The uncertainty relating to the election – as well as the coronavirus pandemic – have helped to drive down rates to new lows.

Mortgage rates began to significantly fall beginning in April after the Federal Reserve started buying mortgage-backed bonds as a way to offer relief during the COVID-19 recession.

Consumers who refinance can save money on their monthly mortgage payments, freeing up cash to cover other bills.

You must verify your income to qualify, so refinancing is not an option if you’ve lost a job. Retirees, though, may be able to refinance a mortgage if they can point to a steady pension or annuities that can be used to repay the debt.

In general, homeowners can be a good candidate for refinancing if they have built up equity in their home, are able to refinance their existing mortgage rate to one that is at least 0.75 percentage points lower, and plan to stay in their home for at least three years to five years, according to Adam DeSanctis, a spokesperson for the Mortgage Bankers Association.

Refinancing activity is expected to soar by nearly 71% this year, compared with a year ago, according to the Mortgage Bankers Association.

Overall in 2020, the mortgage industry expects to hit $1.78 trillion in refinancing originations – the highest level since 2003. But forecasts call for originations to slow next year, dropping by an estimated 46% to $946 billion.

As interest rates fell during the pandemic, the opportunity to lock in a low rate grew in 2020.

United Wholesale Mortgage CEO Mat Ishbia said homeowners will want to shop around for the best rates, especially since there is a significant disparity in rates being offered by lenders. Some lenders, he said, are pricing themselves so they’re no longer competitive because they’re already overwhelmed with a glut of refinancing applications given the ultra-low mortgage rates.

“It’s never been this low and that’s part of the capacity issue,” Ishbia said.

A large segment of homeowners could still benefit from refinancing, Ishbia said. Homeowners should be able to get a better than average refinancing rate in the 2% range, if they shop around.

United Wholesale Mortgage reported that its closed on $54.2 billion in loans in the third quarter, up 81% from its $29.9 billion loan volume closed in the third quarter of 2019. That includes refinanced loans and mortgages for new purchases.

Ishbia said between 65% to 75% of the loan volume involved refinancing for the third quarter.

New refinance fee debuts Dec. 1

The Federal Housing Finance Agency is imposing a 0.5% refinancing fee that kicks in Dec. 1 on most mortgages. If your refinanced mortgage is under $125,000, you will not be hit by this fee. On a $200,000 mortgage, the fee would add another $1,000. But not all lenders are passing all of the extra cost directly to consumers.

Ishbia said that’s yet another reason for homeowners to shop around and do some research by working with a mortgage broker. He recommends going to findamortgagebroker.com – a site that’s powered by United Wholesale Mortgage, a division of United Shore Financial Services.

“Every lender is so different,” he said.

Experts say homeowners shouldn’t think they need to rush in November to refinance before the Dec. 1 kickoff for the extra free. First, you might not close that loan in time to avoid the fee. Second, the fee might already be baked into your loan offer.

Phil Shoemaker, president of originations at Ann Arbor, Michigan-based Home Point Financial, a mortgage lender and servicer, said many lenders across the country have already included the new 0.5% surcharge in their pricing before that fee officially goes into place.

“It’s still a favorable time to refinance compared to where rates have been in previous years, but there isn’t any kind of a mad dash to beat the buzzer, so to speak, before the fee goes into effect,” Shoemaker said in a statement.

Right now, mortgage rates remain well below where they were at the beginning of 2020 and during the early days of the COVID-19 pandemic, says Matthew Speakman, an economist at Zillow.

“Uncertainty pertaining to the pandemic has continued to place downward pressure on rates into the fall,” Speakman said.

But if we start to see signs of improvement in the jobs picture or other positive gains for the economy, experts say, rates could move upward at some point. We’re not there quite yet.

The “uncertain outcome of the election appears to have led to a spike in demand for government bonds, placing downward pressure on mortgage rates,” Speakman said.

“Bond market investors appear to be interpreting the uncertain election results as a sign that more economic stimulus is unlikely in the near term.”

“The development helped push mortgage rates notably downward. Given the still-uncertain election results, more sharp movements in mortgage rates in either direction may be on tap in the coming days and weeks,” Speakman wrote in a report Wednesday.

Consumers need to recognize that their own situation will influence the mortgage rate that they’re able to snag.

Before you attempt to refinance, you should check your credit score. Also go to annualcreditreport.com to review your credit report for any errors that could be driving down your score.

“It’s a big range in interest rates depending on where your credit score is,” said Tendayi Kapfidze, chief economist for Lending Tree. “Get actual quotes for your actual situation.”

A homeowner with a credit score in the range of 620 to 639 might be looking at an annual percentage rate of 3.8% when refinancing. But someone who has a score of 760 or higher might be able to qualify for an APR around 3%, he said. The APR would reflect fees and offer you a look at the effective interest rate over the life of the loan.

If you have more equity built up in your home, you’d typically qualify for a better rate, as well.

Kapfidze said refinancing activity is very high compared with earlier in the year. He noted that the average Freddie Mac rate for a 30-year mortgage was 2.81% last week – down from 4.94% in 2018 and down from 3.69% a year ago.

A borrower who took out a $300,000 loan in September 2015 at 3.91%, according to Lending Tree, could save about $300 per month on their payment and more than $19,000 in lifetime interest by refinancing at 2.87%.

In a study this fall, Lending Tree noted that about 86% of mortgage refinance applications are approved across the country. Homeowners with higher credit scores and increased home values are more likely to be approved.

According to Lending Tree, South Dakota, Utah, North Dakota and Nebraska have the highest rates of approval, at 90% or more. Florida and New York are the states with the lowest approval rates.

Greg McBride, chief financial analyst for Bankrate.com, said mortgage rates remain near record lows and refinancing is a way to generate a steady stream of monthly savings on a mortgage, and potentially tens of thousands of dollars in savings over the life of the loan, depending on how long you stay in that home.

As of Nov. 4, according to Bankrate’s latest survey of the nation’s largest refinance lenders, the benchmark 30-year fixed refinance rate was an average 3.03%. The average rate for refinancing was 2.68% for a 15-year fixed rate; and 3.25% for the 5/1 adjustable-rate refinance.

In general, he noted, refinancing rates have tended to be running higher than mortgage rates for new purchases.

“Moral of the story: Shop around, because there are plenty of sub-3% rates still out there,” McBride said.

Copyright 2020, USATODAY.com, USA TODAY

Nov. 9, 2020

Homes Usually Sell for Less in December – but Not This Year

The pandemic tossed traditional “best time of year to buy a home” advice out the window. This year, low inventory and strong demand continue to drive the market.

CHICAGO – With low housing inventories and high buyer demand, home sellers are expected to continue to command higher home prices this winter – an unseasonable trend in the housing market.

“Sellers will have the ball in their court, so to speak, as there are more buyers than sellers,” says Danielle Hale, realtor.com’s chief economist. “This means seller-friendly trends like rising home prices and quick-selling homes.”

In September, home inventory was 39% lower compared to a year ago, but buyers are out in force trying to lock in record-low mortgage rates to help them save on financing costs. Seventy-one percent of homes sold in September were on the market for less than a month, according to NAR data. Properties typically stayed on the market for just 21 days in September – an all-time low. That is down from 32 days a year ago. The median existing-home price for all housing types sold in September was $311,800, a 14.8% increase compared to a year ago.

And home prices are on the rise. The national median home listing price climbed 11.1% in September compared to a year earlier. It’s now $350,000. Price per square foot has increased 13.9%, realtor.com data shows.

Hot housing market likely won’t cool in winter

“Prices are high,” says Simon Isaacs, broker-owner of Simon Isaacs Real Estate in Palm Beach, Fla. “People are getting what they’re asking.”

Move-in-ready homes tend to have the highest demand, real estate professionals say. Homes that don’t require repairs, as well as homes that show off in-demand amenities – such as extra space, outdoor areas, privacy and rooms that can double as home offices or learning areas – likely will sell the fastest, real estate pros say. Homes for sale that offer virtual tours, which buyers can peruse from the safety of their own homes, have also grown in appeal during the pandemic.

Home sellers need to be ready for possible multiple offers for their home. Real estate pros are suggesting to buyers that they don’t rush to accept offers too quickly. Sellers usually have 24 to 48 hours to accept an offer.

“Literally eight hours of sleep could net you an extra $30,000,” Matt Curtis, owner of Matt Curtis Real Estate in Huntsville, Ala., told realtor.com.