Tag: portland housing market

Home loan rates at two month lows

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

What do you call a cow with a twitch?….beef jerky……Happy National Craft Beef Jerky Day!  

US Stocks & Interest Rates

Economic uncertainty is taking a toll on the stock market and helping mortgage rates improve.

In an interview with the Wall Street Journal President Trump said it was “highly unlikely” that the US would accept a request from China to hold off on additional trade tariffs as the two countries head into a trade summit.

Furthermore, investors are less certain about the Fed’s future monetary policy as US interest rates head closer to a “neutral” level.  

Economic uncertainty tends to discourage investment in the stock market and encourage capital to flow into safe-havens which helps US mortgage rates.

US interest rates are currently at two-month lows.

Housing Prices

As interest rates decline so do appreciation rates for homes.  Home prices are still increasing year-over-year but not as rapidly as they have over the past few years.  

The Case-Shiller Home Price index for Portland released earlier today shows that homes are 5.1% more expensive than they were 12 months ago.  For a homebuyer who puts 10% down that is still a great cash-on-cash return.  

Josh Lehner of the Oregon Bureau of Economic Analysis recently wrote THIS PIECE which explains how the housing market is re-balancing after years of under supply and strong demand.

The Week Ahead

This week’s economic calendar is busy.  On Wednesday we’ll see new home sales and Fed Chairman Jerome Powell is scheduled to speak.   On Thursday we’ll get minutes from the last Fed meeting and their favorite gauge of inflation (PCE price index).  

Given that mortgage rates are at recent lows I recommend locking in.

Current Outlook: locking

Season’s Greetings & A Quick Portand Housing Update

Posted on by Evan in Swanson Home Loans Blog - Mortgage Rate Updates and More

There is so much that I feel gratitude for.  Thank you for all of you who support our business and lives.  With sincere thanks we want you to know that we appreciate you.

The housing market here in Portland is shifting and I wanted to offer a candid and honest assessment of how I see things.  Please take a moment to watch this short video where I explain and provide some data.

Have a warm and safe Turkey Day!  As always we are here to help anyone seeking home loan services without surprises!  Thanks!

Follow Up: Housing Affordability In Portland

Posted on by Evan in Housing & Real Estate, Swanson Home Loans Blog - Mortgage Rate Updates and More

Last week I posted an article which highlighted the (welcome) perspective from the state of Oregon’s Office of Economic Analysis that housing affordability will reach an inflection point this year.

It turns out that the chief economist for the aforementioned office delivered a talk to the City Club of Portland a couple weeks ago. His talk can be seen in the you tube video below. 

His comments on housing start at the 9:00 mark and last for approximately 10 minutes.

Do you agree with Mark’s comments on the housing market? What is your perspective? Please feel free to add your thoughts in the comment section.

The impact of rising mortgage rates on purchasing power

Posted on by Evan in General Mortgage Info., Housing & Real Estate, Swanson Home Loans Blog - Mortgage Rate Updates and More

As many prospective homebuyers are painfully aware mortgage rates have taken an acute shift higher since the election back in November.  Mortgage rates have increased by .50%-1.00% depending the loan program and down payment.  Depending on a prospective homebuyers approach this will impact people in different ways.

Lets look at an example of a homebuyer who is committed to a specific monthly payment of $1,600 per month for principal & interest or approximately $2,000 including property taxes and homeowner’s insurance (not an uncommon budget for the Portland-metro area).

The chart below shows the maximum purchase price that buyer would need to look within assuming a 20% down payment.

As you can see throughout the summer of 2016, when mortgage rates were in the 3.50% range, a homebuyer with this budget could look for a home in the ~$445,390 price range and maintain payments within their target budget.

However, as mortgage rates have increased closer to 4.50% today their maximum purchase price has declined by ~$50,000 to ~$394,722.  Effectively, a 1% increase in interest rates for a 30-year fixed rate mortgage reduces a homebuyers purchasing power by ~11%.

We do not know what the future holds for mortgage rates.  As I have written repeatedly as of late in my ‘rate update‘ category I happen to believe interest rates have overreacted to the results of the election.  If I am right then rates will reverse modestly lower and purchasing power will increase.

However, if I am wrong rates may continue to trend higher and homebuyers will need to either be willing to spend more per month or settle for less house.

Are you a prospective homebuyer?  If so, I would love to be a resource for you.  Please contact me for an initial phone conversation.