Housing Market Strong Due To Declining Mortgage Interest Rates
This BLOG On Housing Market Strong Due To Declining Mortgage Interest Rates Was PUBLISHED On March 25th, 2019
Many economists and housing experts are expecting Housing Market Strong in 2019 due to the FED announcing of an interest rate freeze for the remaining year.
- In 2018, mortgage rates shot up to an all-time high since the 2008 Housing Bubble Crash
- The Federal Reserve Board raised interest rates quarter after quarter in 2018
- Due to FED raising interest rates, it had an impact on mortgage rates
- With the highest mortgage rates since 2008, we had a housing market strong due to the demand for housing
- With a strong housing market, home prices kept on increasing that both FHFA and HUD had to raise conventional and FHA Loan Limits
- Both FHFA and HUD raised
conventionaland FHA Loan Limits for three years in a row
- FHFA raised conforming loan limits for 2019 to $484,350
- HUD raised FHA Loan Limits for 2019 to $314,827
- Mortgage rates have been sliding since the beginning of the year
- Several weeks ago, the FED announced they will not raise interest rates for the 1st Quarter 2019
On March 20th, 2019, mortgage rates hit a 13 month low. In this blog, we will discuss the housing market strong due to declining mortgage rates in 2019.
Reasoning For Housing Market Strong For 2019
Reason for expected housing market strong for 2019 is due to decreasing mortgage rates.
- Other factors such as increasing wages and the great economy
isexpected to fuel home buyers to pull the trigger in 2019
- The Dow Jones Industrial Average is approaching 26,000
- Consumer’s 401k’s are at an all-time high
- Using 401k for home purchase down payment and closing costs
- Many industry experts and economists are expecting a strong housing market than originally expected
- Mortgage interest rates have been steadily declining since the beginning of the year
Mortgage rates hit a 13 month low to 4.23%. It is expected to go lower in the weeks and months to come.
What Experts Are Saying About The 2019 Housing Market
According to Massimo Ressa, Chief Executive Officer at Gustan Cho Associates at Loan Cabin Inc., a national direct lender, he issued the following statement:
The last three months have been kind to potential homebuyers. While mortgage rates increased throughout most of 2018, they began to trend downward in December and have continued to fall since then. All the while, average household income has trended up, boosting house-buying power. These lower rates don’t just increase purchasing for buyers, but they also encourage existing homeowners to join the market. These owners were “rate locked-in” when mortgage rates were rising. Now that they’ve dropped, homeowners might consider purchasing a new house at a lower rate, creating more housing inventory in the process. There is also the Millennial factor here to consider. Many Millennials have been priced out the market historically, and today’s lower rates are inching the door to homeownership back open. The increase in house-buying power directly contributed to a gain of nearly 131,000 potential home sales in the last three months, by far the strongest driver of market potential. An extra boost in new construction is also likely to help the housing market as we head further into 2019. The recent increase in housing starts means home builders are pushing through new construction projects, which should help alleviate the supply shortage in the future,” he said. The net effect? We expect the spring home-buying season to be stronger than anticipated just a few months ago.
Alternative NON-QM Loan Programs
Adding fuel to the fire is the launch of many