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Mortgage Interest Rates as of Today! – The JK-Team
Current Real Estate Mortgage Interest Rates as of September 12, 2024
Navigating the world of real estate can be challenging, especially when it comes to understanding mortgage interest rates. As of September 12, 2024, the landscape of mortgage rates presents both opportunities and considerations for potential homebuyers.
Current Rates Overview
The median interest rate for a 30-year fixed-rate mortgage is currently at 5.990%. This rate, while slightly higher than earlier in the year, remains competitive and offers a stable option for those looking to spread their payments over a longer period. On the other hand, the 15-year fixed-rate mortgage stands at 5.250%, providing a lower rate but requiring higher monthly payments. This option is ideal for buyers who can afford the increased monthly cost and wish to pay off their mortgage faster.
Factors Influencing Rates
Several factors influence these rates, including economic indicators such as inflation, employment rates, and the Federal Reserve’s monetary policy. Recently, the Federal Reserve’s decisions to adjust interest rates in response to inflationary pressures have played a significant role in the current mortgage rate environment.
Impact on Homebuyers
For potential homebuyers, these rates mean different things depending on their financial situation and long-term goals. A higher interest rate can increase the overall cost of a mortgage, but it also reflects the broader economic conditions that can affect property values and investment returns. Buyers should consider their budget, the stability of their income, and their long-term plans when choosing between a 30-year and a 15-year mortgage.
Tips for Homebuyers
- Shop Around: Different lenders offer varying rates and terms, so it’s crucial to compare offers.
- Improve Your Credit Score: A higher credit score can help you secure a lower interest rate.
- Consider a Larger Down Payment: This can reduce the loan amount and potentially lower your interest rate.
- Lock in Your Rate: If you find a favorable rate, consider locking it in to protect against future increases.
Conclusion
Staying informed about current mortgage interest rates is essential for making sound financial decisions in the real estate market. As of September 12, 2024, the rates offer both challenges and opportunities. By understanding the factors that influence these rates and considering your financial situation, you can make a more informed decision about your home purchase.
Home | John Griffin (thejk-team.com)
Real estate Market Report for Southeast PA 9-11-24 – The JK Team
Market Overview (Summer 2024)
- Home Sales: There has been a notable increase in home sales, with a 9.6% rise compared to the same period last year1.
- Median Sales Price: The median sales price for homes in Southeast Pennsylvania is approximately $307,7501.
- Inventory: The inventory of homes available for sale has seen a slight decrease, contributing to a competitive market1.
Key Trends
- Increased Demand: The demand for homes remains strong, driven by low interest rates and a growing population in the region2.
- Price Adjustments: While there is an overall increase in home prices, some areas have seen slight price adjustments due to varying local market conditions2.
- New Listings: There has been a steady flow of new listings, although not enough to meet the high demand, leading to a seller’s market2.
Local Insights
- Philadelphia Suburbs: Areas like Chester, Montgomery, and Bucks counties are particularly popular, with many buyers seeking suburban homes with more space2.
- Urban Areas: Philadelphia itself continues to attract buyers, especially in neighborhoods undergoing revitalization2.
Market Update 9-10-24 The JK Team
New home sales were UP in August from July and above the seasonal norm. Lower rates, even in the 6’s, spawns buyers. (John Burns)
Donald Trump says, if elected, he plans to cut the cost of a new home “in half” by slashing regulations so “young people can buy a home again.”
Many cumbersome building regulations are at the local level but it’s estimated that 30% of the cost of a new home is regulatory costs.
The typical homebuyer’s down payment was 18 percent of the purchase price in June, the highest level in over a decade and up from 15 percent a year earlier.
Remember that extreme controversy bill that would allow illegal immigrants to be eligible for down payment assistance programs up to $150,000 in California? Governor Newsom vetoed the bill.
The average American spends over $330,000 on rent before becoming a homeowner. (Fortune)
Market Update 9-7-24 / The JK Team
A Look Into the Markets
This past week interest rates improved slightly from concerns of an economic slowdown. Let’s discuss what happened and look into the important news items next week.
“Ba-dee-ya, say, do you remember? Ba-dee-ya, dancin’ in September Ba-dee-ya, never was a cloudy day” – September by Earth, Wind and Fire.
Labor Market
“We do not seek or welcome further cooling in the labor market.
We do not seek or welcome further cooling in the labor market” – Fed Chair Powell.
This past Wednesday, the JOLTs Report was released, confirming that the labor market is cooling. The headline number, which shows the number of jobs available, declined more than expectations and fell to the lowest level since January 2020, before the pandemic.
Seeing less help wanted signs is the first step to elevated unemployment. If you think about how the labor market cycle works, first you stop hiring, then you may trim hours for some of your employees and if conditions persist then you start reducing headcount. We are moving through this cycle rapidly right now as the unemployment rate has ticked up sharply over the last year.
Adding to the headwind for the labor market are both hires and quits, which are also both at pre-pandemic levels. On the quit side, people are not readily quitting because it’s tougher to find a job. This highlights the softening conditions in the labor market.
Manufacturing Recession
Another sign of economic conditions slowing was our manufacturing index which continues to show contraction. This news would normally be bond-friendly as bonds like bad economic news – but this was offset by a higher price paid component, which is inflationary and bonds don’t like.
2/10 Yield Curve
In the middle of last week and in response to all the bond friendly news, the 2-year Note yield disinverted or moved beneath the 10-year Note yield for the first time since 2022. If this disinversion or positive yield curve remains, there is a rising fear of recession ahead. Currently there seems to be no recession but things can change quickly as we have seen in the labor market.
September Stocks
September has been historically a bad month for stocks, and they are off on the wrong foot again this year as prices crumbled when we returned from the Labor Day holiday on Tuesday. Again, this is from fears of a softening labor market and the reality that the Fed is cutting rates because economic conditions are warranted. It seems that bad news is finally bad news.
It is also important to remember that each of the last two Septembers were also rough ones for the bond markets and interest rates. So, while things are looking pretty good right now, stay in touch with your mortgage professional as this can change quickly.
Bottom line: The trend is our friend as rates are at the lowest levels of 2024 and are threatening to touch the best levels since early 2023. Moreover, the Fed is going to cut rates in a couple weeks and will likely do so again in November and December, if the labor market continues to soften.
Looking Ahead
Next week is the Blackout or Quiet Period for the Fed. This means there are no speeches or comments on monetary policy. That is a good thing. We do have the Consumer Price Index (CPI) inflation reading which has been the biggest market mover for interest rates over the past couple of years. Markets are expecting CPI to come in at 2.6% year-over-year, the lowest since March 2021. We are also going to have another round of Treasury auctions that can move rates sharply.
The latest Market Update 8-22-24 – The JK Team
We’re are at a 50-year high of building multi family apartments. As a result, median asking rent prices for apartments were LOWER in July, the first time lower rents have occurred since 2020. (Redfin) Custom home building is at a two-year HIGH. (NAHB)
There are 135,000 homeowners currently in forbearance. That’s only around a quarter of one percent of all homes. There were around 8 million forebearences during the pandemic. (MBA)
Some economists are calling on Fannie Mae and Freddie Mac to introduce a 40-year mortgage to help combat affordability. (CNBC) Home affordability in the early 1980’s was worse than today.
Mortgage rates were higher, there was more inventory and we were in a recession but home prices didn’t fall. Rates eventually fell and never went higher and sales grew. (Bloomberg)
Labor/Employment stats impact mortgage rates, sometimes with more significance than Inflation data. I know, I’m a broken record on this topic. Yesterday, the Bureau of Labor Statistics reported the actual job growth in the 12 month period through March 2024 was 30% lower than originally reported. That means the U.S. economy created 818,000 fewer jobs than in that 12 month period than previously reported. Enter Conspiracy theorists? This report could be seen as an indication that the labor market isn’t as strong as the Bureau of Labor Statistics made it out to be.
All of this data increases the likelihood of that Fed Rate cut in September. Will it be 0.25% or 0.50%? That Fed rate cut should give consumers more confidence.
Market Update 8-20-24 – The JK Team
Hello Friends,
- The NAR Settlement is here. I thought this was interesting and good information…
- President and CEO of Anywhere Brands: “I don’t have a crystal ball on how every NAR-affiliated MLS or state association will interpret the legal language in NAR’s settlement. But what I do know is that we all have a choice: You can either seize this moment, or you can be a witness to it. I encourage you to choose the former.”
- Folks looking to buy homes in the next 12 months aren’t big fans of paying the buyer’s agent themselves. Only 10 percent of said they would be open to paying their agent’s fee out of their own pocket.
- 32 percent said they would be open to countering at a higher price if that means the seller covers their buyer’s agent fee.
- Investor purchases of single-family homes rose nearly 7 percent in the second quarter, the biggest increase in two years. Investors bought 1 of every 6 homes that sold and 1 of every 4 low-priced homes that sold. Investor home purchases rose most in San Jose and Las Vegas. Zillow expects home prices to rise around one percent over the next 12 months. Not a ton but much better than DEPRECIATION.
- Housing starts and permits hit lowest levels since June 2020. (CNBC). New homes won’t likely be as available when lower rates start to come.
- American workers haven’t been this worried about losing their jobs in a decade. (Marketwatch) Strangely, that’s good news for mortgage rates.
- Despite lower rates, nearly 60,000 home-purchase agreements were canceled in July. That’s 16 percent of homes that went under contract. Highest percentage of any July on record. High home prices and political uncertainty were part of the reason. (Redfin) So…you weren’t the only one that had a buyer cancel in July.
Interest Rates Market Update 8-17-24 from the JK Team
Interest rates continue to hover just beneath the best levels of the year. This past week an important inflation reading was delivered and bonds breathed a sigh of relief. Let’s discuss what happened and look at the events to watch for next week.
“I’m going to Jackson; I’m going to mess around”… – Jackson by Johnny Cash and June Carter
Inflation Cooling
This past week, the July Consumer Price Index (CPI) was reported. The year-over-year number came in at 2.9%, the lowest reading since March 2021. After stripping out food and energy, the Core CPI annual reading came in at 3.2% the lowest reading since April 2021. This is welcome news.
The numbers brought a sigh of relief to the bond market as bonds hate inflation. This news could likely prompt the Fed to cut rates at the September Fed meeting and by as much as .50%.
Gimme Shelter
Shelter makes up any enormous amount of the inflation reading. In fact, it makes up 90% of the 2.9% CPI figure and 70% of the Core CPI figure.
What is Included in Shelter?
The shelter component of the CPI includes:
Rent of Primary Residence: The actual rent paid by tenants for their main housing.
Owners’ Equivalent Rent (OER): The estimated rent that homeowners would pay if they were renting their homes. This is a hypothetical cost, not based on actual rental payments, but rather on rental values of similar properties.
Lodging Away from Home: Costs of staying in hotels, motels, and other temporary lodgings.
How is Shelter Computed?
Data Collection: The Bureau of Labor Statistics (BLS) collects data on rent and owners’ equivalent rent from thousands of households across different geographic areas.
Rent Index Calculation:
For Rent, they collect data on the price of rent for a variety of rental properties over time.
For OER, they ask homeowners what they think their home would rent for and use data from comparable rental properties.
Weighting and Averaging:
Each type of housing has a different weight in the overall shelter component. Weights are determined based on how much of the average consumer’s budget is spent on each type.
The BLS calculates an index for each type, taking into account the relative importance of different types of housing in different regions.
Price Change Calculation: The BLS then computes the average change in prices over time for all shelter components.
Aggregation: Finally, these changes are aggregated to form the shelter component of the CPI.
Importance of Owners’ Equivalent Rent
Why OER?: Most Americans are homeowners, not renters. If the CPI only used actual rents, it would not accurately reflect the housing costs experienced by the majority of the population.
How OER is Estimated: OER is based on the idea that homeowners have an opportunity cost for living in their own homes, equivalent to what they could earn by renting it out.
Example:
Let’s say the BLS collects the following data:
Rent for a typical two-bedroom apartment increased from $1,000 to $1,050 over a year.
OER for a similar property went from an estimated $1,200 to $1,250.
The BLS would calculate the percentage change in both rent and OER and then combine them based on their relative weights to get the overall change in the shelter component.
Why Shelter is Important in CPI
Shelter is a large part of most people’s budgets and makes up a significant portion of the CPI. Therefore, changes in shelter costs can significantly impact the overall CPI, influencing economic policy, wage negotiations, and cost-of-living adjustments.
Summary
In summary, the shelter component of the CPI measures the cost of housing by combining data on actual rents and estimated costs for homeowners, weighted to reflect the spending patterns of the average consumer. This helps provide a comprehensive view of how housing costs are changing over time.
3.80%
The 10-yr Note which ebbs and flows alongside home loan rates was at 3.80% late last week, near the lowest levels in over a year. The lowest level for the 10-yr Note this year was 3.66%.
Refinance Activity Soaring
The decline in home loan rates did more than spike purchase activity. Refinances were at 35% on the week as folks look to take advantage of the lowest rates of 2024.
Bottom line: Rates continue to gradually improve as the economy slows, inflation declines, and the unemployment rate edges higher.
Next week doesn’t have a lot of economic news, but there are a couple potential big market moving events. On Wednesday, the Minutes from the last Fed Meeting will be released. This was the Meeting where they decided not to cut, which was just hours before the weak July Jobs Report which has since elevated recession fears and talks of a .50% cut next month. Then on Friday, Fed Chair Jerome Powell will be speaking at the Jackson Hole Symposium. We have seen many big market moving comments come from this gathering…stay tuned.
