“After months of barely budging, mortgage rates rose significantly in early January at their strongest pace since the spring,” said Matthew Speakman, a Zillow economist. “But that upward momentum has since dissipated, and it appears that fears of an extended, more substantial spike in rates have diminished — at least for now.”
For the moment, according to The Washington Post, the mortgage market appears to be in a holding pattern, watching to see what President Biden’s administration does. Before taking office, Biden announced a $1.9 trillion economic and health-care relief proposal.
Biden’s homebuyer and builder boost
Many people looking to buy a home are frustrated by slim-pickings and rising prices. As reported by CNBC, President Biden aims to ease those issues as he implements his plans for the housing market.
Overall, President Biden’s plans are focused on affordability. Here are some of the policies experts predict he’ll push for:
- $15,000 first-time homebuyer tax credit
- Urging big banks to get back into FHA lending
- Encouraging new construction of both single and multifamily housing
Strengthening the Community Reinvestment Act, which is intended to help low and moderate income areas.
Housing stays tight as homeowners stay put
Americans are holding on to their homes longer, and it is costing would-be home buyers, according to The Wall Street Journal.
The length of time U.S. homeowners stay put has been rising steadily, a big reason why the inventory of homes for sale is at record lows and prices are near all-time highs. The typical homeowner in 2020 had remained in place for 13 years, well ahead of 2010’s metric of 8.7 years, according to a new analysis by real-estate brokerage Redfin Corp. About one in four U.S. homeowners has lived in the same home for more than 20 years, the study showed.
Home sales soared last year, reaching their highest level in 14 years, as the coronavirus pandemic sent many buyers in pursuit of larger homes where they could work remotely more easily. But concerns about Covid-19 had the opposite effect among potential sellers. A fear of strangers entering their homes during the pandemic prompted some people to cancel or delay their plans to list their homes, real-estate agents say.
Weekly mortgage rate update
Mortgage rates have hovered near historic lows for almost a year, fueling purchase and refinance activity amid a global health crisis. And according to Freddie Mac, now we’re seeing rates fluctuate a bit as political and economic factors drive Treasury yields higher. However, rates are forecast to remain relatively low this year as the Federal Reserve keeps interest rates anchored near zero for a longer period of time, if needed until the economy rebounds.
The Freddie Mac weekly survey shows the average rate for a 30-year fixed mortgage is 2.77%, which is down 0.02 points from last week, and down 0.83 points from this time last year.