What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.
From Freddie Mac’s weekly survey, the 30-year fixed rate moved higher, to 3.83 percent from last week’s 3.80 percent. The 15-year fixed moved up 1 basis point to 3.10 percent from last week’s 3.09 percent.
The Mortgage Bankers Association reports less than a 1 percent increase in loan application volume from last week.
BOTTOM LINE: Assuming a borrower gets the average 30-year conforming fixed rate on a $417,000 loan, last year’s rate of 4.48 percent and payment of $2,107 is $157 more than this week’s payment of $1,950.
WHAT I SEE: From rate sheets hitting my desk that are not part of Freddie Mac’s survey: Locally, well-qualified borrowers can get loans for 1 point at 3.625 percent on a 30-year fixed rate, 2.875 percent on a 15-year fixed and 3.75 percent on a Fannie Mae high balance loan ($417,001 to $625,500). True jumbo loans (over $625,500) are available at 4.125 percent and 1 point.
WHAT I THINK: Here are my 2015 predictions:
1) The 30-year fixed rate is going to stay around 4 percent (or lower) in 2015. I was very close to predicting the interest rates for both 2013 and 2014, the first years I provided forecasting.
2) Orange County’s median home price will go up 5 percent. The Orange County economy is very healthy and balanced, reason number 1 for this improvement.
3) Orange County residential home sales volume will increase between 5 and 10 percent. Whenever you have a balance of buyers and sellers and good inventory levels, you have a winner.
4) FHA will reduce its outrageously and ridiculously expensive mortgage insurance premium.
5) Mortgage loan volume will increase nationally to 1.4 trillion dollars from an estimated 1.1 trillion in 2014.
6) Short-term interest rates will go up between ¼ and ½ percent. Prime rate is currently at 3.25 percent. If you have a home equity line of credit, expect it to go up just a bit.
7) Regulation rollback is coming. Congressional budget cuts are coming to the Consumer Financial Protection Bureau. Political pressure from industry trade groups will provide a pathway for lenders to have more underwriting discretion, resulting in more loans being made.
8) Fannie Mae and Freddie Mac are not going away. They may get merged into one. The banksters are opportunists. Americans cannot afford any possibility of restricted access to mortgage money.
9) Real estate agents are going to see more of their market share slip away to real estate auction companies. Auction companies will be responsible for nearly 5 percent of residential sales. That said, detail-oriented full-service realty agents that provide perfect service on a platter will have banner years.
10) Regulators will finally get rid of the two-tiered system that requires no thorough background checks, standardized testing or continuing education of bank and credit union loan officers.