Mortgage Rates Top 7% of Homeowners React to Climate Change…

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/ Pixabay Table of Contents On the mortgage front

Freddie Mac (OTCMKTS:FMCC) averaged 7.08% on Oct. 27, up from last week when it averaged 6.94%. The 15-year fixed rate mortgage is up 6.36% on average from last week when it averaged 6.23%.

And the 5-year Treasury-indexed adjustable rate hybrid mortgage averaged 5.96%, up from last week when it averaged 5.71%.

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“The 30-year fixed-rate mortgage fell 7 percent for the first time since April 2002, leading to major stagnation in the US dollar,” said Sam Khater, Freddie Mac’s chief economist. leading to a further decline in consumer confidence this month.

In fact, many potential homebuyers are choosing to wait and see where the housing market will end, further depressing demand and house prices.”

As mortgage rates rose for the tenth straight week, mortgage applications fell to another 25-year low. The Mortgage Bankers Association (MBA) Market Composite Index declined a seasonally adjusted 1.7% from the previous week; the unadjusted index fell by 2%.

The purchasing index fell 2% and the refinancing index rose 0.1%, although it was also 86% lower than the same week a year ago.

“The ongoing trend of rising mortgage rates continues to dampen mortgage application activity, which has remained at its slowest pace since 1997,” said MBA Vice President and Associate Chief Economist Joel Kan.

“Refinance requests were essentially flat, but purchase requests fell 2% to the slowest pace since 2015 — more than 40% off last year’s pace. Despite higher interest rates and overall lower application activity, there was a slight increase in FHA purchase applications as FHA interest rates remained lower than traditional loan rates.”

On the home ownership front

More than half (58%) of U.S. homeowners have invested to make their homes more resilient to climate threats, according to a new report from Redfin (NASADQ:RDFN).

In a survey of 1,000 homeowners across the country, about a quarter (26%) said they’ve spent money making their homes more resilient to extreme heat. Other risks that spurred homeowners on include extreme cold (22%), flooding (16%), hurricanes and major tropical storms (14%), poor air quality (13%), tornadoes (12%), earthquakes (11% ) and forest fires (11%).

In Florida, nearly three-quarters (71%) of homeowners have spent money protecting their homes from climate risks, with 40% focusing on increased resilience to hurricanes or other tropical storms.

“Americans are spending to protect their homes against natural disasters as they increasingly move to vulnerable areas despite worsening climate change. Unfortunately, their investments aren’t always enough – a reality made clear when Hurricane Ian destroyed scores of homes, many of which lacked flood insurance,” said Redfin chief economist Daryl Fairweather.

“Homeowners should be aware that if their area becomes uninsurable and/or uninhabitable due to climate change, their property value could decline over time.”

However, some homeowners face risks based on gross bias. A new report released by the National Community Reinvestment Coalition (NCRC) reveals real estate appraisers’ prejudice against black homeowners.

The report used a “mystery shopper” approach, with NCRC recruiting several multiracial couples who own homes in the Baltimore area as test subjects. Two appraisers were hired to appraise the multiracial couples’ homes.

“When a surveyor arrived at the home to conduct an inspection, only the black homeowner was present,” the NCRC report said. “When the other appraiser arrived at the home to conduct an inspection, only the white homeowner was present.

The decor of the home has also been modified to represent the race of the homeowner who meets the appraiser. When the white homeowner met with the appraiser, all evidence that a black person lived in the home was removed. The opposite happened when the black homeowner met with an appraiser.”

The result of the test, according to the NCRC, was that the white testers received ratings that averaged nearly $7,000 higher.

“The most notable examples were a home that was rated 12.9% higher when the white spouse presented the home (a $40,000 difference) and a home that was rated 9.1% higher than the white spouse presented that house (a difference of $46,000). “, says the report.

“The discrimination we found in the rating system undermines black wealth accumulation and is almost certainly against the law,” said NCRC President and CEO Jesse Van Tol.

“Evidence of systematic bias in the appraisal business has been mounting for some time, but NCRC’s new tests have shown that multiracial couples in Baltimore receive far better treatment and appraisal when the appraiser believes the homeowner and their family are white. “

On the home buying front

New sales in September were at a seasonally adjusted annual rate of 603,000, according to estimates by the US Census Bureau and the Department of Housing and Urban Development. This is 10.9% below the revised August rate of 677,000 and 17.6% below the September 2021 estimate of 732,000.

The median selling price of new homes sold in September was $470,600, while the median selling price was $517,700. The seasonally adjusted estimate of new homes for sale at the end of September was 462,000, which translates to 9.2 months of supply at the current sales rate.

Separately, a new report found that 80% of wealthy consumers in the U.S. consider real estate a safe investment, and more than a third believed it to be a safer investment than stocks, bonds, cryptocurrencies and annuities.

According to The Trend Report, published by Coldwell Banker Real Estate LLC, an Anywhere (NYSE:HOUS) brand, and the Coldwell Banker Global Luxury program, the top reasons high net worth individuals bought real estate as an investment was portfolio diversification (46.7%), long-term investment (46.1%), financial gain from rental income (45.9%) and inheritance for their children (45.3%).

The top five types of homes that respondents own as an investment property were multi-family (39%), single-family homes (34%), apartments and condos (34%), townhouses and semi-detached homes (33%), and fractional ownership (28%). ).

In terms of buying, the report found that over half of luxury consumers plan to finance their next home purchase through cash offers (51%) or with a personal asset mortgage (48.1%).

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