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Mortgage and Real Estate News For Wednesday December 25th 2024
Mortgage and Real Estate Update for Wednesday, December 25th, 2024Mortgage Rates Remain Constant As The Holidays Are Upon Us.
30-Year Fixed Rate Mortgage:
- Average fixed mortgage rate continues to remain at 6.75 %.
- Analysts don’t anticipate any compelling changes this week.
15-Year Fixed Rate Mortgage:
- The average rate on the 15-year is 6.15, which is also a good option for homeowners willing to refinance.
ARM:
- Similar to the 5/1 ARM, rates have remained stable at 6.50 percent while buyers consider the risk of a rate change.
Analysis:
- Towards the end of the year, we usually see a drop in the amount of mortgage applications as people are less likely to look to buy a new home.
- However lenders do suspect that they may see a increase in the early months of 2025 as rates begin to normalise.
Housing Still In Demand During The Winter Season
Lack of Supply:
- The active listing has dropped by 18% year on year which further lowers the options for the buyers in many locations.
Prices:
- Price of homes rose by 4.1% in November 2024 when compared with the last year during the same period.
- This is indicitive of demand in high growth areas.
Top Buy Markets:
- Austin and Orlando are hot places to buy homes while less accessibly prices areas such as Wisconsin and Pittsburgh are more stable.
Trends in the Rental Market
Rents Rates Slowing Down:
- The rental rates for 2024 have seen a rise by 2.3 percent lower than the 5.7 percent rent witnessed in the year 2023.
- This stagnation is due to an increased availability of multi-family houses.
Continued Movement to Suburbs:
- Renters are shifting from apartments to suburban areas due to affordability issues, especially in areas just outside big cities such as Phoenix and Denver.
Increased Costs Affect Builder Confidence
Commencement of New Homes:
- In comparison to last year there has been an increase of 9 percent during November of single family house starts while multi-family starts have remained constant.
Excess Inventory in Some Parts:
- In Texas and Florida, builders are recording high inventories of unsold homes, especially in the luxury sector.
2025 Predictions:
- The builders are not very optimistic but cautious, which is why they want to build affordable housing for most people so that eager entry-level home buyers will choose it.
An Increase in The Rate Of Foreclosure and Bankruptcy
Foreclosure:
- An Increasing economic stress and inflation is leading to a growth in US foreclosure filing and as a result between Q3 to Q4 of two thousand twenty-three there was a 13 percent increase.
Bankruptcies:
- There has been a year over year increase of 18 percent in the filing of personal bankruptcies showing the financial stress faced by the middle-class households.
Areas With the Highest Growth:
States like New Jersey, Illinois, and Nevada need the most scrutiny as they had the highest amount of foreclosure activity.
Broader Trends in Commercial Real Estate Portfolio Looking at the Bigger Picture
Retail Decline:
- The e commerce business has taken over which is why the rates have increased to 12 .8 percent which is causing the brick-and-mortar business to struggle.
Shifting the Office Network:
- Suburbs are seeing an increase in preferences for office spaces.
- Whereas cities are facing higher offices than ever before.
- SFF and NYC are quoted to have a very high vacancy rate cross country comparison shows a significant increase in demand.
E-commerce digitalization effect:
- The E-commerce and improvements in supply chain are the two most key drivers for a growth in demand for logistics and warehouse spaces.
Changes In Policy Affecting Housing
Inspection Report for FHA Loan Limits 2025:
- Prevalent headlines include the federal housing administration loan limits amendment.
- This will see the loan limits in high-cost regions increased to 1.2 million dollars.
- This development allows more buyers to take up markets with expensive places, including New York and California.
Tax Incentives for Affordable Housing:
- Integracare in Hexcel has prepared to lobby Congress and vote to extend the tax incentives for builders seeking to construct affordable housing projects, which is liable to solve the looming shortage of inventory.
Climate Change Effects on Real Estate
Flood Zones:
- The New FEMA flood maps, which will be published in early 2025, will likely categorise additional regions as high-risk, which will lead to an enhancement in the price of flood insurance for homeowners.
Wildfire Areas:
- Wildfires are a reality whose aftermath California, Colorado and other states are adjusting to.
- Wildfires have alternative real estate impacts, such as A
- advancing premiums of insurance and reducing property expenses of affected regions.
Real Estate Investment Trends
- Over time, the popularity of real estate properties designed for short-term rentals has not seemed to drop.
- However, in the bigger cities such as Miami and Los Angeles, some measures are being put in place that control who can purchase these properties.
As for communities made specifically for renters, investors are gradually moving in that direction as there is plenty of demand for such buildings since many people can’t afford to own a house.
Tech in Real Estate
There is a rise in people utilizing remote services to buy houses. People can now talk over platforms and do virtual tours, which reduces the waiting time and makes it more efficient.
When lending, companies have been leaning towards utilizing AI as part of the approving process. It speeds up the process significantly and lowers the amount of time spent on underwriting.
International Buyers Return
Luxury Properties across the United States have been catching the eye of international investors, especially those in New York, Miami & Los Angeles, Canada, Europe & China overseas investors seem to be returning in large numbers.
Make sure to keep an eye open for further updates as there is plenty more room to monitor these trends going into the new year.
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2 Replies
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Like to congratulate President Donald J. Trump for getting elected. I have no doubt the new Trump Administration will do great to fix the broken economy Joe Biden and Kamala Harris has cause. How about the mortgage and housing markets? What can President Trump do to fix the housing and mortgage markets? Inflation through the roof, home prices doubled and tripled, mortgage rates nearing 8%. Most would be first-time homebuyers are priced out of the housing market. The economy is experiencing a flood of business and corporate bankruptcies, record foreclosure, skyrocketing unemployment, and the dollar does not go far. This is a major concern among Americans. Can the economy, housing markets, and mortgage markets even be fixed?
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Congratulations to President Donald J. Trump on His Election Victory
With the transition of power to the Trump Administration, many Americans are looking toward his leadership to address the challenges facing the U.S. economy, housing market, and mortgage industry. Here’s a comprehensive look at the current state of these sectors and potential solutions under the new administration.
Current State of the Economy, Housing, and Mortgage MarketsEconomic Challenges
Inflation:
- Consumer prices remain high, with inflation stubbornly hovering around 3.9%, straining household budgets.
- Unemployment rates are climbing as businesses face financial strain, resulting in mass layoffs.
Corporate Bankruptcies:
- A surge in business and corporate bankruptcies highlights economic instability.
Housing Market Woes
- Median home prices have doubled or tripled in many markets since 2020, pushing affordability out of reach for most first-time homebuyers.
- Mortgage Rates: Fixed 30-year mortgage rates are nearing 8%, adding significant costs to homeownership.
- Foreclosures: The foreclosure rate is at a record high, with many homeowners unable to keep up with mortgage payments.
Mortgage Market Stagnation
- High interest rates reduce mortgage application volumes, impacting lenders and the housing market.
- Strict lending standards constrain borrowing, especially for low- and middle-income buyers.
What Can the Trump Administration Do? Immediate Steps to Address Inflation and Economic Instability
Monetary Policy Collaboration:
- Work closely with the Federal Reserve to control inflation through targeted interest rate adjustments and fiscal policies.
Energy Independence Initiatives:
- Promote domestic energy production to reduce energy costs, a key driver of inflation.
Tax Cuts:
- Propose tax reductions for individuals and businesses to increase disposable income and stimulate spending.
Reforms for the Housing Market
Boost Housing Supply
- Incentivize homebuilders to construct affordable housing through tax credits and reduced regulatory burdens.
Federal Land Usage:
- Open federal land for housing development to increase supply and stabilize prices.
Expand Down Payment Assistance:
Provide financial support for first-time homebuyers, including grants and zero-interest loans.
Mortgage Market Interventions
Lower Borrowing Costs:
- Offer government-backed subsidies or incentives for lenders to reduce mortgage rates.
Streamlined Regulations:
- Simplify mortgage qualification processes for low-income and first-time buyers.
Revive Programs Like HARP:
- Introduce refinancing programs to help homeowners with underwater mortgages lower their payments.
Long-Term Economic and Housing Solutions Economic Growth Policies
Infrastructure Investment:
- Launch large-scale infrastructure projects to create jobs and stimulate local economies.
Manufacturing Resurgence:
- Promote “Made in America” initiatives to strengthen domestic industries and reduce import reliance.
Debt Management:
- Focus on reducing national debt to stabilize the economy and restore investor confidence.
Affordable Housing Strategy
Public-Private Partnerships:
- Collaborate with private developers to create affordable housing communities.
Rental Market Support:
- Expand rental assistance programs for families unable to afford homeownership.
Zoning Reforms:
- Encourage local governments to adopt changes that support higher-density, mixed-use developments.
Addressing Foreclosures
Foreclosure Prevention Programs:
- Implement financial literacy campaigns and mortgage forbearance programs for struggling homeowners.
Community Revitalization:
- Use foreclosed properties to create affordable housing units or community development projects.
Can the Economy and Housing Markets Be Fixed?
Yes, but it will require a multi-faceted approach involving:
Collaborative Leadership:
- Effective coordination between federal, state, and local governments.
Policy Precision:
- Tailored policies targeting the root causes of economic and housing challenges.
Patience and Adaptability:
- Economic recovery takes time, and adjustments will be necessary.
Challenges Ahead
Global Economic Conditions:
- Global inflationary pressures and supply chain issues may hinder progress.
Political Divisions:
- Bipartisanship will be critical to passing reforms and implementing effective solutions.
Market Resistance:
- Rising interest rates and high home prices may take time to stabilize, requiring persistent intervention.
President Trump’s administration has a significant opportunity to address the nation’s economic and housing crises. While the challenges are daunting, a combination of innovative policies, targeted reforms, and collaboration can pave the way for recovery. The key will be to balance immediate relief measures with long-term strategies to ensure all Americans’ economic and housing market stability.
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