RETURNING TO THE 60S. THANKS, DYLAN. WELL, A NEW FEDERAL REGULATION GOES INTO EFFECT TOMORROW. THAT COULD IMPACT HOW MUCH MONEY YOU’RE SPENDING ON A NEW HOME. AND IT REALLY ALL COMES DOWN TO YOUR CREDIT SCORE. JOINING US LIVE THIS MORNING WITH MORE IS BRANCH MANAGER AND ATLANTIC COAST MORTGAGE SCOTT ESCROW. THANKS FOR BEING HERE THIS MORNING. THANKS FOR HAVING ME. HUGELY CONTROVERSIAL. TELL US WHAT’S GOING ON. SO WHAT WHAT’S HAPPENED IS FANNIE MAE AND FREDDIE MAC HAVE MADE SOME ADJUSTMENTS TO THE CREDIT SCORES. NOW, THIS ONLY AFFECTS CONVENTIONAL LOANS, WHICH IS FANNIE AND FREDDIE, FHA, VA, CONVENTIONAL, NOT CONVENTIONAL. FHA, VA JUMBO LOANS AREN’T AFFECTED BY THIS. SO WHAT THEY DID IS THEY MADE CHANGES TO THEIR LOAN LEVEL PRICING ADJUSTMENTS. AND AT THE TOP END, THEY ADDED TWO ADDITIONAL CREDIT SCORE TIERS. SO NOW YOU HAVE A 760 AND A 780 SCORE WHERE BEFORE ANYONE OVER A 740 WAS GOLDEN, RIGHT? SO NOW YOUR SEVEN 40S, TIER THREE, OKAY. BUT LET’S TALK ABOUT WHAT THIS MEANS, BECAUSE IF YOU’RE GOING TO BE PENALIZED, LET’S LET’S BARE BARE BOTTOM, THEN YOU’RE PENALIZED FOR GOOD CREDIT AND YOU ARE REWARDED FOR HAVING BAD CREDIT WITH THIS NEW SYSTEM. WELL, IT SEEMS THAT WAY. YES. SO WHAT THEY DID IS THEY TOOK TIER ONE AND MADE IT TIER THREE. RIGHT. AND THEN ON THE LOW END, THEY GAVE YOU A DISCOUNT. RIGHT. IT’S LESS EXPENSIVE NOW ON THE LOW END TO BUY A HOUSE. BUT IT’S STILL NOT NEARLY AS GOOD AS IF YOU HAD GOOD CREDIT. SO SO IF WE TOOK AN EXAMPLE OF A $400,000 HOME OR $400,000 LOAN, SOMEONE WITH A 740 CREDIT SCORE NOW WILL PAY ABOUT $1,500 MORE IF THEY PUT 5% DOWN ON THAT HOUSE. NOW, WITH THE 760 SCORE, THEY’RE PAYING ABOUT $1,000 MORE. SO THE DOWN PAYMENT ALSO CHANGES. IT’S A PART OF THAT FORMULA. CORRECT. SO DIFFERENT DOWN PAYMENT LEVELS WILL AFFECT HOW MUCH THAT DIFFERENCE IS. SO ON THE SURFACE, THIS IS DEFINITELY A GOOD DEAL FOR PEOPLE WHO DON’T HAVE AS GOOD OF CREDIT SCORES BECAUSE THEY ARE GETTING A BREAK. THEY ARE GETTING A BREAK FROM WHAT THEY WOULD HAVE PAID. RIGHT. SO IN THAT $400,000 EXAMPLE, SOMEONE WITH NOT SUCH GREAT CREDIT, MAYBE A 640 SCORE WOULD PAY WOULD SAVE $3,700. OKAY. BUT BUT THEY’RE STILL PAYING $7,500. SO SOMEONE IS PAYING THEY’RE PAYING $1,500 MORE AT THE TOP END WITH THAT. 740. BUT ON THE LOW END, THAT BUYER IS PAYING $7,500 TO KEEP THAT SAME RATE. BUT BOTTOM LINE, IT FEELS LIKE PEOPLE ARE BEING PENALIZED FOR DOING THE RIGHT THINGS AND HAVING A GOOD CREDIT SCORE. HOW IS THAT OKAY? WELL, THAT’S BEYOND ME. SO, YOU KNOW, I DON’T CONTROL THE AGENCIES OR WHAT THE GOVERNMENT DOES, WHAT THEY’RE TRYING TO DO IS PROMOTE AFFORDABLE HOMEOWNERSHIP. SO AT THE BOTTOM END, YOU KNOW, PEOPLE WHO HAD TO PAY $11,000 IN POINTS AND FEES ON TOP OF THEIR REGULAR CLOSING COSTS NOW ARE PAYING $7,500. SO ARE YOU GOING TO GET PEOPLE THAT ARE COMING IN NOW WHEN THEY’RE GETTING A MORTGAGE AND THEY WANT TO KNOW IF IT’S BACKED BY FREDDIE MAC OR FANNIE MAE BECAUSE THEY DON’T WANT TO HAVE TO PAY THAT EXTRA 1%, RIGHT? SURE. NOW, WHEN AN SOMEONE COMES TO ME, I REALLY WANT THEM TO COME TO ME WITH AN OPEN MIND OR ANY LENDER WITH AN OPEN MIND BECAUSE IT’S OUR JOB TO GO THROUGH THEIR ENTIRE SITUATION AND FIGURE OUT WHAT WOULD BE THE BEST OPTION OR THE BEST 2 OR 3 OPTIONS, AND THEN BE ABLE TO PRESENT IT TO THE BUYER TO SEE WHAT WOULD BE BEST FOR THEM. ALL RIGHT. IF SOMEONE WANTS MORE INFORMATION OR THEY WANT TO SEEK YOU OUT, HOW DO THEY DO THAT? OH, THEY CAN REACH ME. SCOTT. AT LOW RATE LOAN OR THEY CAN GO TO LOW RATE LOAN. THAT’S MY PERSONAL WEB PAGE. OR THEY CAN CALL ME AND I JUST WANT TO MAKE SURE THAT, YOU KNOW, YOU ARE NOT ON TRIAL FOR THIS. THIS IS A DECISION THAT WE DIDN’T MAKE, YOU DIDN’T MAKE. BUT A LOT OF PEOPLE HAVE A LOT OF QUESTIONS ABOUT IT. SO WE APPRECIATE YOU BEING HERE TO ANSWER SOME O
Mortgage rates for June 7: Rates moderate, homebuying demand falls
After rocketing to 6-month highs last week, mortgage rates even out back below 7%
Updated: 6:00 AM EDT Jun 7, 2023
PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlX3ZpZXdwb3J0X2RldGVjdGlvbi5qcyI+PC9zY3JpcHQ+PHNjcmlwdCBhc3luYyB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiPm15ZmlXYXRjaFdpZGdldCgnbXlmaVdpZGdldF8wJyk7PC9zY3JpcHQ+Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at [email protected] Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.BALTIMORE — The wild mortgage rate rollercoaster continues to hurtle potential homebuyers up and down: Rates dipped back below 7% last week after zooming on May 26 to their highest levels since November. The average for a 30-year fixed-rate mortgage dropped to 6.89% on June 6, down from 7.14% a little more than a week ago, according to Mortgage News Daily. Video above: New mortgage rule may increase cost due to good creditMortgage rates closely track 10-year Treasury yields, which rose in recent weeks in response to the debt ceiling standoff in Congress. Once lawmakers cut a deal, however, rates began to decline as the likelihood that the U.S. would go into default faded.Don’t get too comfortable with the current rates, however. More volatility is expected over the next few weeks amid the release of key economic reports, as well as the upcoming meeting of the Federal Open Market Committee. Fed officials appear split about whether to hike the federal funds rate another quarter point or pause its campaign at the June meeting. While a pause could provide some relief for homebuyers, another hike could nudge mortgage rates higher.If you can afford the higher monthly payments on a 15-year mortgage, they’re offering the best rates these days, averaging 6.29%. For example, if you take out a $250,000 mortgage, you’d pay $69,408 in interest over the first five years of the 15-year loan, compared to $83,740 in interest over the first five years of the 30-year loan — a savings of about $14,300. (The average rate on a 30-year jumbo mortgage, meanwhile, is 6.66% and the average for a 5/1 ARM sits at 6.85%.)Mortgage rate trendsThirty-year fixed-rate mortgage rates have more than doubled from the historically low rates of 2020 and 2021, when rates plummeted below 3%. One reason: the Fed’s 10 consecutive rate hikes, aimed at tamping down inflation. The central bank raised the benchmark borrowing rate yet again May 3, bringing the range to 5%-5.25%. (While the Fed doesn’t set mortgage rates, its actions affect them — and have had an even greater influence during this economic cycle than usual.)At the time of the May meeting, Fed officials indicated a pause in the rate-hiking campaign was possible at the June meeting. Since then, however, officials have been publicly split on the next best action. Fed Governor and vice chair elect Philip Jefferson said in remarks on May 31 that a pause would “allow (Fed committee members) to see more data before making decisions.” Meanwhile, Cleveland Fed President Loretta Mester struck a hawkish tone in an interview with the Financial Times. “I don’t really see a compelling reason to pause — meaning wait until you get more evidence to decide what to do,” she said. “I would see more of a compelling case for bringing (rates) up.”While inflation seemed to be slowing during the first few months of the year, data for April is more discouraging. Consumer expenditures increased 0.4% in April and 4.7% on an annual basis, 0.1% higher than expected, according to the commerce department. The May jobs report, released June 2, also came in stronger than expected, with 339,000 new jobs added.The Fed’s goal for the rate-hiking campaign is to slow the economy enough to temper inflation. Economists continue to predict a recession in 2023, and once the economy finally cools, mortgage rates will likely fall, though it’s hard to say exactly when that will happen. Homebuyers this spring have been sensitive to rate fluctuations, coming and going from the housing market as rates fall and rise. As rates skyrocketed over the week ending May 26, mortgage applications fell 3.7%, according to the Mortgage Bankers Association.”Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” said Mike Fratantoni, MBA’s senior vice president and chief economist.Baltimore housing market trendsThe housing market in Baltimore remains somewhat competitive, even as it comes down from the pandemic-era peak. In April, the median home sale price was $211,000, down 4.1% from this time last year, according to Redfin. (Nationally, the median sale price is down 1.9%.) Homeowners remain reluctant to give up the low mortgage rates they got during the past two years, resulting in low inventory. Consequently, bidding wars in some of the most desirable areas of the city have pushed the average sale price 2% above listing. Nationally, new listings remain at some of the lowest levels in memory, even during what’s normally the busiest homebuying season of the year. Pending home sales fell 17% on an annual basis for the four weeks ending May 28, one of the biggest declines since January, according to Redfin. Homebuyers watching mortgage rates and waiting for the perfect moment to strike might not want to wait too long. Many economists predict an incoming credit crunch — when banks restrict borrowing to steady their finances — which would make it harder over the coming months to get a mortgage. That means potential homebuyers could have a window of opportunity right now to lock in a satisfactory rate. Comparing rates between multiple lenders will help you find the best loan for your situation. 30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on June 6 was 6.89%, down from 6.95% on May 30.15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on June 6 was 6.29%, down from 6.40% on May 30.Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on June 6 was 6.66%, down from 6.68% on May 30.5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on June 6 was 6.85%, down from 6.92% on May 30.What determines mortgage rates?Mortgage rates are influenced by a variety of factors, including:Your credit scoreDown paymentYour debt-to-income ratio (DTI)The type of loan you’re gettingLoan termInterest rate type (fixed vs. adjustable)Inflation and the overall economyThe Federal Reserve (which doesn’t set mortgage rates, but it certainly influences them)Should you lock in your mortgage rate?Locking in your mortgage rate fixes the interest rate for a specific period of time, typically 30, 45 or 60 days. If the lender hasn’t processed your loan within the set timeframe, you can either negotiate for an extension of the lock or go with the current mortgage rate. Once you lock in the rate, it will stay the same unless there are changes to your application, including:Switching to a different type of loanChanging the amount of your down paymentChanging the amount of the loan The home appraisal differs significantly from the estimateYour credit score goes downYour income can’t be verifiedMortgage rates have been especially volatile recently, so it’s hard to say whether it makes sense to lock in your rate. If they go up again, locking in your rate will protect you. But if they go down, you could miss out on a lower rate. Here are some scenarios where it makes sense to lock in your rate:You feel you’re already getting the best possible rate for now from your lenderYou’re worried about rates going back upYou have enough time to close before the rate lock expiresYou want peace of mind around your mortgage rateYou don’t want anything unexpected happening related to the mortgage rate at closing Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor for the Hearst E-Commerce team. Email her at [email protected].
Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at [email protected].
Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.BALTIMORE — The wild mortgage rate rollercoaster continues to hurtle potential homebuyers up and down: Rates dipped back below 7% last week after zooming on May 26 to their highest levels since November. The average for a 30-year fixed-rate mortgage dropped to 6.89% on June 6, down from 7.14% a little more than a week ago, according to Mortgage News Daily. Video above: New mortgage rule may increase cost due to good credit
Mortgage rates closely track 10-year Treasury yields, which rose in recent weeks in response to the debt ceiling standoff in Congress. Once lawmakers cut a deal, however, rates began to decline as the likelihood that the U.S. would go into default faded.
Don’t get too comfortable with the current rates, however. More volatility is expected over the next few weeks amid the release of key economic reports, as well as the upcoming meeting of the Federal Open Market Committee. Fed officials appear split about whether to hike the federal funds rate another quarter point or pause its campaign at the June meeting. While a pause could provide some relief for homebuyers, another hike could nudge mortgage rates higher.If you can afford the higher monthly payments on a 15-year mortgage, they’re offering the best rates these days, averaging 6.29%. For example, if you take out a $250,000 mortgage, you’d pay $69,408 in interest over the first five years of the 15-year loan, compared to $83,740 in interest over the first five years of the 30-year loan — a savings of about $14,300. (The average rate on a 30-year jumbo mortgage, meanwhile, is 6.66% and the average for a 5/1 ARM sits at 6.85%.)
Mortgage rate trendsThirty-year fixed-rate mortgage rates have more than doubled from the historically low rates of 2020 and 2021, when rates plummeted below 3%. One reason: the Fed’s 10 consecutive rate hikes, aimed at tamping down inflation. The central bank raised the benchmark borrowing rate yet again May 3, bringing the range to 5%-5.25%. (While the Fed doesn’t set mortgage rates, its actions affect them — and have had an even greater influence during this economic cycle than usual.)At the time of the May meeting, Fed officials indicated a pause in the rate-hiking campaign was possible at the June meeting. Since then, however, officials have been publicly split on the next best action. Fed Governor and vice chair elect Philip Jefferson said in remarks on May 31 that a pause would “allow (Fed committee members) to see more data before making decisions.” Meanwhile, Cleveland Fed President Loretta Mester struck a hawkish tone in an interview with the Financial Times. “I don’t really see a compelling reason to pause — meaning wait until you get more evidence to decide what to do,” she said. “I would see more of a compelling case for bringing (rates) up.”While inflation seemed to be slowing during the first few months of the year, data for April is more discouraging. Consumer expenditures increased 0.4% in April and 4.7% on an annual basis, 0.1% higher than expected, according to the commerce department. The May jobs report, released June 2, also came in stronger than expected, with 339,000 new jobs added.The Fed’s goal for the rate-hiking campaign is to slow the economy enough to temper inflation. Economists continue to predict a recession in 2023, and once the economy finally cools, mortgage rates will likely fall, though it’s hard to say exactly when that will happen. Homebuyers this spring have been sensitive to rate fluctuations, coming and going from the housing market as rates fall and rise. As rates skyrocketed over the week ending May 26, mortgage applications fell 3.7%, according to the Mortgage Bankers Association.”Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” said Mike Fratantoni, MBA’s senior vice president and chief economist.Baltimore housing market trendsThe housing market in Baltimore remains somewhat competitive, even as it comes down from the pandemic-era peak. In April, the median home sale price was $211,000, down 4.1% from this time last year, according to Redfin. (Nationally, the median sale price is down 1.9%.) Homeowners remain reluctant to give up the low mortgage rates they got during the past two years, resulting in low inventory. Consequently, bidding wars in some of the most desirable areas of the city have pushed the average sale price 2% above listing. Nationally, new listings remain at some of the lowest levels in memory, even during what’s normally the busiest homebuying season of the year. Pending home sales fell 17% on an annual basis for the four weeks ending May 28, one of the biggest declines since January, according to Redfin. Homebuyers watching mortgage rates and waiting for the perfect moment to strike might not want to wait too long. Many economists predict an incoming credit crunch — when banks restrict borrowing to steady their finances — which would make it harder over the coming months to get a mortgage. That means potential homebuyers could have a window of opportunity right now to lock in a satisfactory rate. Comparing rates between multiple lenders will help you find the best loan for your situation.
30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on June 6 was 6.89%, down from 6.95% on May 30.15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on June 6 was 6.29%, down from 6.40% on May 30.Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on June 6 was 6.66%, down from 6.68% on May 30.5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on June 6 was 6.85%, down from 6.92% on May 30.What determines mortgage rates?Mortgage rates are influenced by a variety of factors, including:Your credit scoreDown paymentYour debt-to-income ratio (DTI)The type of loan you’re gettingLoan termInterest rate type (fixed vs. adjustable)Inflation and the overall economyThe Federal Reserve (which doesn’t set mortgage rates, but it certainly influences them)Should you lock in your mortgage rate?Locking in your mortgage rate fixes the interest rate for a specific period of time, typically 30, 45 or 60 days. If the lender hasn’t processed your loan within the set timeframe, you can either negotiate for an extension of the lock or go with the current mortgage rate. Once you lock in the rate, it will stay the same unless there are changes to your application, including:Switching to a different type of loanChanging the amount of your down paymentChanging the amount of the loan The home appraisal differs significantly from the estimateYour credit score goes downYour income can’t be verifiedMortgage rates have been especially volatile recently, so it’s hard to say whether it makes sense to lock in your rate. If they go up again, locking in your rate will protect you. But if they go down, you could miss out on a lower rate. Here are some scenarios where it makes sense to lock in your rate:You feel you’re already getting the best possible rate for now from your lenderYou’re worried about rates going back upYou have enough time to close before the rate lock expiresYou want peace of mind around your mortgage rateYou don’t want anything unexpected happening related to the mortgage rate at closing
Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor for the Hearst E-Commerce team. Email her at [email protected].
https://www.wbaltv.com/article/mortgage-rates-june-7-baltimore-housing-market/44108762
