CNBC Archives

The Cost Of Renting Continues To Climb

Naturally, affordability is a concern for anyone deciding whether they’ll rent or buy their next home. Buying a house is a significant undertaking and involves a number of costs and responsibilities that renters don’t have to worry about. That, however, doesn’t necessarily mean that renting is always going to be the more affordable option. In fact, rent has been climbing for years and continues to increase, according to a recent analysis from ABODO. The analysis determined that the average renter last year paid $1,001 per month for a one-bedroom home and the average month-over-month increase was .67 percent. In short, the average rent rose about $85 from where it was at the beginning of last year to where it ended up at the end of the year. Still, when looked at on a state-by-state basis, rental prices vary greatly. For example, the average rent in states like Georgia, Tennessee, and North Carolina is far lower than it is in areas like the District of Columbia, California, and New York. However, that doesn’t mean rents aren’t rising in metropolitan areas within states with lower overall averages. A look at the cities with the largest average monthly increase in rental costs shows Columbus, GA, Raleigh, NC, and Nashville, TN among the top 10, while San Francisco, Oakland, and Las Vegas experienced some of the largest declines in monthly rent. More here.

Mortgage Rates Fall Over Holiday Season

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell over the two-week holiday season. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances, as well as 15-year fixed-rate loans. Rates for mortgages backed by the Federal Housing Administration were unchanged. But despite the fact that it was the first time in weeks that rates moved lower, demand for mortgage applications still fell. In fact, refinance activity was down 22 percent and the seasonally adjusted Purchase Index dropped 2 percent from two weeks earlier. Naturally, the numbers are adjusted to account for the Christmas holiday but, according to the MBA’s chief economist Michael Fratantoni, the slowdown was even more than is usual for the holidays. “Mortgage application volume typically drops sharply over the holidays,” Fratantoni told CNBC. “However, this year, as mortgage rates continued their upward climb reaching the highest levels in more than two years, overall application volume fell even more than the holiday slowdown would suggest.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

The Top Spots For Buying A Second Home

Buying a second home is a common dream. Whether you want a place at your favorite vacation spot or a getaway close to home, it’s fun to imagine the possibilities. And, according to recent estimates from the National Association of Home Builders, millions of Americans are doing more than imagining them. There are 7.5 million houses that are being used as second homes across the country. That’s 5.6 percent of the nation’s housing stock. But where are the most popular locations for people looking to buy a second home? Well, not surprisingly, the counties that contain the largest share of second homes are mostly rural and scenic with low populations. Hamilton County, NY topped the list with 79.3 percent of homes classified as second residences. Forest County, PA, Rich County, UT, Alpine County, CA, and Daggett County, UT rounded out the five counties with the highest share of second homes. However, when you break down the data based on the number of second homes in any given county – rather than the percentage – the top 10 follows a less rugged path. In fact, warm weather counties near metro areas lead the list, which includes Maricopa County, AZ, Palm Beach County, FL, Lee County, FL, Los Angeles County, CA, Broward County, FL, and Riverside County, CA among the top 10. More here.

Rising Mortgage Rates Still Low Historically

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose again last week. Rates moved up for all loan types except those backed by the Federal Housing Administration. Still, despite steadily increasing over the past month, mortgage rates remain low by historical standards. In fact, since 1980, mortgage rates have been as high as 18 percent – though they spent most of the past 40 years somewhere between 7 and 10 percent. In other words, mortgage rates are up from their all-time lows but remain far lower than they’ve typically been. The increases, however, have had an impact on refinance activity, which is more sensitive to rate fluctuations. “Refinances are almost entirely driven by mortgage rates, while purchase activity is a function of a broader set of variables including the state of the job market, demographics, and consumer confidence,” Michael Fratantoni, chief economist for the MBA, told CNBC. As proof, Fratantoni points to the fact that purchase application demand has actually risen 12 percent over the past month, while the group’s refinance index has fallen over the same period. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rates Increased Again Last Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up again last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increase brought rates to their highest level in over a year. As a result, refinance demand fell sharply. In fact, refinance activity was down 16 percent from the week before. Demand for loans to buy homes, on the other hand, was relatively flat – though the trend toward higher-balance loans may be an indication that younger buyers are being deterred by rising rates. “The mix continues to shift towards higher balance loans, as the average purchase loan size reached a new survey record,” Michael Fratantoni, MBA’s chief economist, told CNBC. “First-time buyers and buyers of lower priced units may have stepped away from the market to some extent given the jump in rates.” The week’s results include an adjustment for the Thanksgiving holiday. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Positive Economic News Takes Rates Higher

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved up last week across most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. It was the second consecutive week rates increased and follows a general trend upward over the past month. Joel Kan, an MBA economist, told CNBC positive economic news has been pushing rates higher. “Economic news in recent weeks has been mostly positive, especially in terms of GDP growth and increasing wages,” Kan said. “This raises the likelihood of the Fed raising rates at its December meeting, but also indicates stronger domestic economic fundamentals, which pushes rates higher.” As usual, rising rates had a negative effect on refinance activity, which is more sensitive to rate fluctuations than home purchase activity. Refinance demand dipped 3 percent last week from the week before, while demand for loans to buy homes was actually up 1 percent and is now 11 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rate Bump Leads To Slower Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. The increase brought rates to their highest level since June and caused a slight dip in overall demand for mortgage loans. Refinance activity – which is generally more sensitive to rate fluctuations – fell 2 percent, while demand for loans to buy homes was down less than 1 percent from the week before. Michael Fratantoni, MBA’s chief economist, told CNBC there are several factors that point to more rate increases in the near future. “Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response,” Fratantoni said. “Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating the Fed is likely to hike in December and will continue increasing rates next year.” But, though rate increases are expected in the coming months, they are also expected to be gradual – likely keeping rates low by historical standards, at least in the near term. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rate Increase Slows Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased across all loan categories last week, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increase brought rates to their highest level in a month and caused a decline in demand for home loan applications. Michael Fratantoni, MBA’s chief economist, told CNBC economic optimism led to the spike in mortgage rates. “As incoming economic data reassured investors regarding U.S. growth, and financial markets returned to viewing a December Fed hike as increasingly likely, mortgage rates rose to their highest level in a month last week,” Fratantoni said. “Total and refinance application volume dropped to their lowest levels since June as a result.” In fact, refinance demand – which is generally more sensitive to rate fluctuations – dropped 8 percent from the week before, while demand for loans to buy homes fell 3 percent. The MBA’s weekly applications survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Average Mortgage Rate Drops Again

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The drop marked the second consecutive week of declines and brought rates to their lowest level since July. But, though the decrease stirred up refinance activity, purchase application demand was flat from the week before and down 14 percent from last year’s level. Michael Fratantoni, MBA’s chief economist, told CNBC the numbers may not tell the whole story. “The mortgage industry is celebrating the one year anniversary of the TRID/KBYO regulatory implementation date this week,” Fratantoni said. “Purchase application volume last week was almost 14 percent below the same week a year ago. That was the last week for mortgage applications to be covered by the prior disclosure regulations and as a result there was a spike in application activity.” In other words, though this week’s results show year-over-year purchase activity down significantly, it should return to normal with next week’s survey. The MBA has conducted their weekly survey since 1990. It covers 75 percent of all retail residential mortgage applications. More here.

Average Mortgage Rates Up Over Week Before

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. Rates increased to levels last seen in June, though they remain low by historical standards. Michael Fratantoni, MBA’s chief economist, told CNBC the jump was spurred, in part, by speculation that the Federal Reserve may raise interest rates this week. “Mortgage rates increased to their highest level since June last week as comments by some Fed officials made it appear that the Federal Reserve is closer to raising rates,” Fratantoni said. “The average refi loan size fell to its lowest level in three months as more jumbo borrowers left the market.” But while refinance and purchase application demand did fall from one week earlier, they both remain up from last year, with refinance activity 26 percent higher than at the same time one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.