43% delay home improvement

https://www.cnbc.com/2022/06/17/homeowners-delay-big-purchases-improvement-projects-due-to-inflation.html 

43% of homeowners have delayed home improvements and maintenance due to inflation. Here’s why that’s risky

KEY POINTS

• Inflationary pressures have caused some homeowners to delay big projects related to home ownership, a new study shows.
• The cost of financing renovations or improvements is also getting more expensive, with interest rates on consumer loans expected to continue ticking upward.
• Homeowners spent an average of about $4,000 on repairs last year, according to the research.

• For homeowners, big projects and purchases may be another casualty of rampant inflation, new research suggests.

  Overall, 60% of homeowners in a recent survey are less comfortable making large purchases for their home or household because of rising prices, according to Hippo Insurance’s 2022 Homeowner Preparedness Report. And nearly 43% either strongly (14.4%) or somewhat (28.4%) agree that inflation has caused them to delay planned home improvement or maintenance projects.

• The poll used to generate the study was conducted April 29 to May 1 among 1,915 U.S. adults, by Ipsos on behalf of Hippo.

  More from Personal Finance:
  Cost to finance a new car hits a record $656 per month
  How to get started building credit as a young adult
  Here’s what the Fed’s interest rate hike means for you

  With inflation up 8.6% year over year in May — more than expected and the fastest pace since 1981 — households are facing price increases in everything from groceries and gas to rent and clothes, according to the latest data from the U.S. Bureau of Labor Statistics. Generally speaking, demand continues to outstrip supply, which is hampered in many cases by supply-chain issues.

  Residential housing construction costs are up 19% from a year ago, according to the National Association of Home Builders. This can translate into higher costs for home improvement projects, depending on the specifics. The housing market appears to be cooling amid higher interest rates and skyrocketing home prices, however; the median list price of a home in the U.S. is $447,000, up 17.6% from a year ago, according to Realtor.com.

Federal Reserve incresed rates by 0.75%

 In a historic move the Federal Reserves increased rates by 0.75% :

https://apnews.com/article/stock-market-updates-today-june-15-927c4420702d69f1fde6d07b3678e61a

Inflation reaches 40 year high

 

US Inflation Quickens to 40-Year High, Pressuring Fed and Biden

Olivia Rockeman

(Bloomberg) -- US inflation accelerated to a fresh 40-year high in May, a sign that price pressures are becoming entrenched in the economy. That will likely push the Federal Reserve to extend an aggressive series of interest-rate hikes and adds to political problems for the White House and Democrats.

The consumer price index increased 8.6% from a year earlier in a broad-based advance, Labor Department data showed Friday. The widely followed inflation gauge rose 1% from a month earlier, topping all estimates. Shelter, food and gas were the largest contributors.

https://www.bloomberg.com/news/articles/2022-06-10/us-inflation-unexpectedly-accelerates-to-40-year-high-of-8-6

Interest rate status

 You can't go a day without hearing that interest rates have risen this year and these higher rates are making it harder on the average consumer. 

Yet, there are some positive sides of higher interest rates.  #economy

 https://t.co/NDZEp6jkHv

Bobby Darvish 

Fixed mortgage rates reverse course for the first time this year

A Freddie Mac sign stands outside the company's headquarters in McLean, Virginia, U.S., on Tuesday, April 8, 2014. Senator Sherrod Brown, an Ohio Democrat and a member of the Senate Banking Committee, said a bipartisan bill to replace Fannie Mae and Freddie Mac is too complicated and doesn't do enough to address too-big-to-fail concerns or provide assistance for affordable housing. The panel will consider the measure on April 29. Photographer: Andrew Harrer/Bloomberg (Andrew Harrer/Bloomberg News)

Fixed mortgage rates moved lower for first time in 2018.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.44 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.46 percent a week ago and 4.3 percent a year ago.

The 15-year fixed-rate average fell to 3.9 percent with an average 0.5 point. It was 3.94 percent a week ago and 3.5 percent a year ago. The five-year adjustable rate average rose to 3.67 percent with an average 0.4 point. It was 3.63 percent a week ago and 3.28 percent a year ago.

[ Financial planning can help reduce anxiety of buying a home ]

“After holding steady for much of the week — even through Friday’s exceptionally strong jobs report — rates fell for the first time this year after inflation data reported Tuesday were weaker than anticipated, and news of the firing of Secretary of State Rex Tillerson prompted some financial market flight to safety,” said Aaron Terrazas, senior economist at Zillow. “Beyond the continued risk of geopolitical developments, the Fed is expected to raise short-term interest rates at next Wednesday’s [Federal Open Market Committee] meeting. The press conference following the meeting will be Chairman [Jerome] Powell’s first since taking over in mid-February and markets will study the FOMC’s quarterly forecasts for signals about the committee’s unspoken monetary policy leanings.”

Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly two-thirds of the experts it surveyed say rates will remain relatively stable in the coming week. Shashank Shekhar, the chief executive of Arcus Lending, is one who expects rates to hold steady.

“Rates went up too quickly at the beginning of the year and are now simply taking a pause,” Shekhar said. “Mortgage-backed securities, the trading of which directly influences the rate, seems to be agnostic even to big personnel changes in the White House and Britain’s action against Russia. It would take something even more dramatic and unexpected for the mortgage rates to move by a big margin either way, up or down.”

[ Know your mortgage options when searching for a new home ]

Meanwhile, mortgage applications were flat again last week, according to the latest data from the Mortgage Bankers Association. The market composite index — a measure of total loan application volume — increased 0.9 percent from a week earlier. The refinance index fell 2 percent, while the purchase index rose 3 percent.

The refinance share of mortgage activity accounted for 40.1 percent of all applications, its lowest level since September 2008.

“Although the purchase market continues to be constrained by a lack of supply, applications for home purchase loans increased 3 percent last week to the highest level in over a month, as demographic and economic conditions remain favorable for housing demand,” said Joel Kan, an MBA economist. “Refinance activity remains weak as rates have increased in essentially every week of 2018 thus far, reducing the benefit of a refinance for those borrowers currently in the market.”

Robert Bobby Darvish Platinum Lending Solutions Orange County California

Mortgage applications jump 4.5% as buyers rush to beat higher rates

• Mortgage applications rose 4.5 percent last week from the previous week, the Mortgage Bankers Association says.
• Application volume was 6.1 percent higher than one year ago.

Mortgage applications are up 4.5%   3 Hours Ago | 00:39

Spring has sprung early in this housing market. Buyers, seeing a new trend toward higher interest rates, are rushing in before the first buds appear.
Mortgage applications rose 4.5 percent last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted report. Application volume was 6.1 percent higher than the same week one year ago.
Applications to purchase a home led the charge, rising 6 percent for the week to the highest level since April 2010. These loan applications are now 7 percent higher than the same week one year ago.
"A combination of being left on the sideline last summer due to a lack of inventory for sale and the prospect of slowly rising interest rates over the near term appears to have buyers in a hurry to start the spring buying season," said Lynn Fisher, MBA's vice president of research and economics.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $453,100 or less increased to 4.36 percent, its highest level since March. That's up from 4.33 percent, with points remaining unchanged at 0.54, including the origination fee, for 80 percent loan-to-value ratio loans. The 15-year fixed rate climbed to its highest level since September 2013.
Mortgage applications to refinance a home loan also rose, up 1 percent for the week, despite higher rates. Refinance volume usually moves in the opposite direction of interest rates, but borrowers are clearly worried that the direction now is only going to be higher, and they may miss an opportunity with rates still near multiyear lows. Mortgage rates loosely follow the yield on the 10-year Treasury.
"Last week, 10-year Treasury yields increased by 10 basis points over the course of holiday-shortened week, due to a mixed bag of economic and political headlines," Fisher said, referring to Martin Luther King Day.
Not only are homebuyers facing higher mortgage rates, they are looking at a spring season with precious few homes for sale, especially in the starter and mid-level categories. Inventory has been falling for more than two years and homebuilders are not even close to meeting today's strong demand. That means higher home prices even amid higher mortgage rates.
"The increases that we've seen so far have only gotten people off the couch and into the market," Glenn Kelman, CEO of Redfin, told CNBC's "Power Lunch" on Tuesday. "People are worrying that they need to hurry and buy a house now before rates go up further."

Mortgage applications shoot up 8.3% to start the year

• Homebuyers this year are facing a new landscape on the tax front.
• Total mortgage application volume rose 8.3 percent during the first week of the year.
• Refinance applications led the charge, rising 11 percent from the previous week.

Ty Wright | Bloomberg | Getty Images

Potential home buyers walk past an 'Open House' sign displayed in the front yard of a property for sale in Columbus, Ohio, on Sunday, Dec. 3, 2017.

Pent-up demand from the holidays likely fueled the solid jump in mortgage applications last week.
Total application volume rose 8.3 percent during the first week of the year from the previous week, as mortgage rates held below year-ago levels, according to the seasonally adjusted Mortgage Bankers Association report.

Refinance applications led the charge, rising 11 percent from the previous week. Homeowners may be taking advantage of lower rates now, concerned that rates will move higher this year. Rates were higher at the start of 2017 than they are now. Homeowners also saw big gains in home equity last year and may be taking advantage of that in cash-out refinances.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $453,100 or less was basically unchanged during the week, increasing just 1 basis point to 4.23 percent, with points decreasing to 0.35 from 0.37, including the origination fee, for 80 percent loan-to-value ratio loans.

Economic news was mixed during the week, which kept interest rates in check.

"For example, the ISM's nonmanufacturing index showed that growth in the services sector was down for the second month, and the BLS' December jobs report was weaker than expected," said Joel Kan, an MBA economist. "However, these were partially offset by slightly stronger factory orders for November and continued optimism of positive impacts from the tax reform plan."

Homebuyers also came back to the market after the holiday break. Mortgage applications to purchase a home rose 5 percent for the week but were 1 percent lower than the same week one year ago.

"This was likely a catch-up week for potential borrowers as we head into the new year," Kan said.

Homebuyers this year are facing a new landscape on the tax front. The Republican tax plan reduced the deductions that homeowners can take for property taxes and mortgage interest. In higher-priced housing markets and in states with high property-tax rates, that makes homebuying more expensive than it was just a few weeks ago.

Buyers are also facing higher prices due to a severe lack of supply. More homes should begin to come on the market this month and next, with sellers hoping to get the jump on the spring market, especially those who are selling in order to buy another home. Unfortunately for buyers, there is so much demand for housing right now that any new supply will likely be swallowed up quickly with competition and prices remaining high.

Robert Bobby Darvish Platinum Lending Solutions Orange County california