The average rate for a 30-year fixed mortgage is 2.98%, down from 3.03% last week, Freddie Mac says
Less inventory and low mortgage rates fueling competition for homes
The most competitive markets? Boston, San Diego and Salt Lake City.
Boston had the highest bidding war rate in June, of 72.4%, staying on top after 67.2% of offers had a bidding war in May. San Diego and Salt Lake City closely followed – 65.7% and 63.8% of offers in those markets faced competition, respectively.
Thirty-two percent of Americans did not make a full, on-time housing payment in July, according to Apartment List. This is up slightly from 30% in June.
The report added that missed payments are concentrated among renters, young and low-income households, and residents of dense urban areas.
Credit tightening is becoming more evident according to the Mortgage Bankers Association (MBA). Its Mortgage Credit Availability Index fell to a reading of 125.0 in June, a loss of 3.3 percent. A decline in the index indicates stricter lending standards.
A new survey by the National Association of Realtors® (NAR) has found that the vast majority of its members feel as though their businesses are back on track. NAR says, “After enduring months of setbacks brought on by the coronavirus pandemic…more than nine in 10 members believe they are in the process of recovering as many states start to reopen their economies.”
-Wells Fargo is now requiring new customers to bring at least $1 million in balances if they want to refinance a jumbo mortgage, up from a previous level of $250,000, according to people with knowledge of the policy.
-The change came in a July 1 overhaul of lending guidelines that broadly lowered barriers to the product for existing customers, while making it far harder for new ones to qualify, said the people, who declined to be identified speaking about the move.
-“They don’t want to take somebody else’s balance sheet and put it in on theirs,” said one of the sources. “We’re very busy and they wanted to slow down the number of loans coming in.”
-The bank also tightened lending standards in its mortgage business in the July 1 overhaul, which impacts everyone applying for a home loan, not just jumbo refinancings, according to one of the people. For primary and secondary home mortgages, the bank lowered by 5% the size of loans it would approve relative to a property’s value.
States across the U.S. expediting RON legislation amid emergency orders
The reopening of the economy in several states from the COVID-19 shutdowns has moved Fannie Mae’s Economic and Strategic Research (ESR) Group to raise its estimate for the 2020 full year GDP from the 5.4 percent decline it predicted in June to a 4.2 percent downturn. The economists say this improvement is almost entirely due to a stronger pace of recovery than they had anticipated.
The Mortgage Bankers Association (MBA) is expecting new home sales to spike again in June, based on results of its Builder Application Survey (BAS). That survey shows that mortgage applications for new home purchases were up 20 percent from May and 54.1 percent compared to a year ago.
Thanks for reading, and be well.