ARAMCO Report - The Mother of ALL Mortgage Blogs!

Millennials want to own – they just can’t afford it

Posted by Mehran Aram on Sat, Sep 7, 2019 @ 07:09 AM

Although an increasing number of young adults say home ownership is among their top goals, data shows that unaffordable prices and mounting student loan debt is making this goal harder to achieve. In a survey conducted jointly by CoreLogic and RTi Research shows that more than a quarter of millennials are interested in purchasing a home within the next year.

The increase in Millennial home buyers entering the market putting increased pressure on home prices as well.

“A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,” said Frank Martell, president and CEO of CoreLogic. “But with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Millennials, home purchase, Housing Market, CoreLogic, home ownership, Mortgage rates, Housing Affordability, Millennial Homeowners, Affordability, Young Adults

Home affordability improving thanks to low rates

Posted by Mehran Aram on Wed, Aug 7, 2019 @ 06:08 AM

Recent declines in mortgage rates has created millions more potential home buyers. In a new edition of Black Knight’s Mortgage Monitor report, the drop in rates has made home affordability the best it has been in 18 months.

Although home prices continue to increase, less expensive borrowing costs can be an offset. Even small drops in mortgage rates can make a monthly mortgage payment more affordable for home buyers. Black Knight reports that while the average home price has increased by $12,000 since interest rates peaked last November, monthly payments have declined $108 as rates began to retreat.

Lower mortgage rates could spur an increase in home sales as house hunters have more buying power.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home prices, Interest Rates, Black Knight, Mortgage rates, home affordability, home buyers, Affordability, Borrowing Costs, Monthly Mortgage Payments

Home prices beyond affordable

Posted by Mehran Aram on Mon, Jul 8, 2019 @ 09:07 AM

The gap between what homebuyers want to pay for a home and what a home costs appears to be growing. A study conducted by Realtor.com found that, nationally, half of today’s house-hunters are looking to purchase a property for under $288,000. But that’s a 9.1 percent gap or $27,000 less than the median national home price.

Experts boil the dilemma down to the basic economic principle of supply and demand. There simply aren’t enough homes on the market that the average American can afford to buy. Although inventory is growing, it’s doing as at the top of the market – home's priced above $750,000.

“Entry-level homes continue to be difficult to come by as the inventory composition shifts more and more toward higher prices homes,” said Danielle Hale, chief economist for Realtor.com. “This is causing smaller and more affordable homes to appreciate rapidly, resulting in a mismatch between what buyers are able to spend and what sellers expect to receive.”

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home prices, home purchase, homebuyers, Mortgage rates, Realtor.com, Realtors, median home price, Affordability, home inventory

Calif. home sales enter spring in slump

Posted by Mehran Aram on Wed, May 29, 2019 @ 17:05 PM

Home sales in California failed to enter the spring home buying season with any momentum as buyer demand continues to be met with affordability challenges. The California Association of Realtors reported that closed escrow sales of existing, single-family detached homes in the state were 4.8 percent lower in April than they were last year.

“Weak buyer demand, largely prompted by elevated home prices, is playing a role in the softening housing market,” said C.A.R. President Jared Martin. “However, with low interest rates, cooling competition and an increase in homes to choose from, buyers can take advantage of a more balanced housing market.”

The seasonally adjusted annualized rate of home sales was 396,760. This is what would be the total number of homes sold during 2019 if sales maintained their current pace throughout the year. Last month’s sales figures are the ninth consecutive month under 400,000.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home sales, California Association of Realtors, California Home Sales, Affordability, Affordability Challenges, Low Interest Rates

Homelessness rising faster in high-rent markets

Posted by Mehran Aram on Fri, May 3, 2019 @ 05:05 AM

More than half a million people were homeless in the U.S. in 2017 according to the Department of Housing, although some reports place this figure much higher. Still, this is the first increase in homelessness since 2010. Income growth not keeping pace with rising rent prices has caused an affordability crisis that has put more people on the streets.

According to a report from Zillow, communities where people spend more than 32 percent of their income on rent can expect a more rapid increase in homelessness. The median rent price nationwide has risen 11 percent over the past five years although in West Coast markets like San Diego, the increase has been much more pronounced.

The report admits that rising rent prices are just a statistical starting off point and that other factors, like a shortage of housing also contribute to rising homeless populations.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Zillow, Mortgage rates, Affordability, Department of Housing and Urban Development, Homeless, Affordability Crisis, Homelessness

Home builder confidence remains flat

Posted by Mehran Aram on Fri, Apr 19, 2019 @ 05:04 AM

The confidence level among homebuilders in the U.S. appears to be holding steady even in the aftermath of the government shutdown that kicked off the year and the lackluster pace of home sales that followed.

The National Association of Home Builders/Wells Fargo Housing Market Index rose by one point to a reading of 63 in April, bolstered by low mortgage rates. Builder confidence has held steady in the low 60s for three consecutive months.

“Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots,” said NAHB Chairman Greg Ugalde. “Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term.”

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, National Association of Home Builders, Home Builders, single family homes, Mortgage rates, Housing Affordability, housing shortage, Affordability, Home Builder Confidence

Housing affordability issues affecting more Americans

Posted by Mehran Aram on Sun, Mar 31, 2019 @ 09:03 AM

Home prices are currently less affordable than the historic average in 71 percent of U.S. housing markets. This unsurprising yet concerning revelation comes from ATTOM Data Solutions Q1 2019 U.S. Home Affordability Report. The report analyzed 473 U.S. counties and found that the median home price in 335 were not affordable for the average wage earner.

The report determined affordability for average wage earners by calculating the percent of monthly take-home income needed to pay for a mortgage, property taxes and insurance on a median-priced home assuming a three percent down payment.

San Diego County was among several other California markets deemed the most unaffordable, including Los Angeles and Orange counties.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego County, Mortgage rates, home affordability, Housing Affordability, California Housing Market, median home price, ATTOM Data Solutions, Affordability