For the fifth week, fixed-rate mortgages reached new all-time lows. The 15-year fixed-rate mortgage dipped below 3 percent, settling into uncharted territory, according to Freddie Mac’s weekly mortgage market survey. Thirty-year fixed-rate mortgages also reached new record lows, continuing to stay under 4 percent and pushing home buyer affordability even higher.
“Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower, which translates into nearly $1,200 less in annual payments on a $200,000 loan,” says Frank Nothaft, Freddie Mac’s chief economist.
Here’s a closer look at rates for the week ending May 31.
- 30-year fixed-rate mortgages: averaged 3.75 percent, with an average 0.8 point, dropping from last week’s previous all-time low of 3.78 percent. A year ago, 30-year rates averaged 4.55 percent.
- 15-year fixed-rate mortgages: averaged 2.97 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.04 percent. Last year at this time, 15-year rates averaged 3.74 percent.
- 5-year adjustable-rate mortgages: averaged 2.84 percent, with an average 0.6 point, rising slightly from last week’s 2.83 percent average. A year ago at this time, 5-year ARMs averaged 3.41 percent.
- 1-year ARMs: averaged 2.75 percent, with an average 0.4 point, holding steady at last week’s average. A year ago, 1-year ARMs averaged 3.13 percent.
Source: Freddie Mac
The graphic depicts pricing of all homes from their ‘peak through current declines’ as per Case Shiller. This index looks at prices in 20 major metropolitan areas. Keep in mind that for what is categorized as “Seattle” is comprised of Snohomish, King and Pierce Counties.
Each market peaked at different times. Therefore, the InfoGraphic doesn’t cover one segment of time. Here is a site where you can see when each market actually peaked:
A report on the Housing Affordability Index (HAI) for third quarter 2011 showed a statewide index of 160.7, which means a median income family had 60.7 percent more income than the minimum needed to qualify to purchase a $225,300 home (the estimated median-price).
Comparing counties, the HAI ranged from a low of 96.4 in San Juan County, where the median priced home sold for $345,000, to a high of 459.4 in Wahkiakum County, where the median price for third quarter sales was estimated to be $62,500.
The index, prepared by the Washington Center for Real Estate Research, assumes a 20 percent down payment and a 30-year mortgage.
The HAI for counties served by Northwest Multiple Listing Service shows a range of 96.4 (San Juan County) to a high of 243.4 in Pacific County. As revealed in the chart, first-time buyers remain challenged, with the statewide index pegged at 87.4.
WCRER’s report shows a three-year downward trend in prices, including a 9.5 percent drop in the statewide median sales price for Q3 compared to same period in 2010. Prices range from King County’s high of $350,000 to a low of $62,500 in Wahkiakum County.
The WCRER was created in 1989 by the WSU Board of Regents to achieve the university’s tripartite mission of education, research and service in real estate. The Center strives to provide a wide range of useful and understandable information, analysis and knowledge using academic methods in practical context while reporting findings in common language.
HOUSING MARKET SNAPSHOT
State of Washington and Northwest MLS Counties - Third Quarter 2011
- Home Resales are WCRER estimates based on MLS reports or deed recording (Real Market Data LLC)
- SAAR means data presented at Seasonally Adjusted Annual Rates allowing quarter-to-quarter comparison.
- Building permits (total) are from the U.S. Department of Commerce, Bureau of the Census
- Median prices are WCRER estimates. Half the homes sold at higher prices, half lower
- Affordability index measures the ability of a typical family to make payments on median price resale home. It assumes 20% downpayment and 30-year amortizing mortgage. First-time buyer affordability index assumes a less expensive home, lower downpayment and lower income.
Ultra-low interest rates mixed with stabilizing home prices continued to push housing affordability in the third quarter near its highest levels in more than two decades, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.
For the third quarter, 72.9 percent of all homes sold were affordable to families earning the national median income of $64,200, according to the index. This marks the 11th consecutive quarter that the affordability measure was above 70 percent; prior to this it rarely was above 60 percent.
"With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households than it has been for nearly two decades," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, tough economic conditions — particularly in markets that experienced major changes in house prices and production — as well as extremely tight credit conditions confronting home buyers and builders continue to remain significant obstacles to many potential home sales."
The most affordable major housing market nationwide? Lakeland-Winter Haven, Fla., in which 92.5 percent of all homes sold were found to be affordable to households earning the median family income of $53,800 for the area. Other affordable major markets included Toledo, Ohio; Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; and Ogden-Clearfield, Utah. For smaller housing markets, Fairbanks, Alaska, ranked the highest, in which 97.8 percent of homes sold during the third quarter were found to be affordable to families earning the median income of $91,700.
Meanwhile, the least affordable major housing market continues to be New York-White Plains-Wayne, N.Y.-N.J., in which 23.3 percent of all homes sold were affordable to those earning the area’s median income of $67,400.