An In-Depth Look at Recent Trends and Changes Affecting Homebuyers and Homeowners
"Mortgage rates continue to fall, performance improves, and fees change. Stay informed on the latest developments in the mortgage market."
Latest Developments in the Mortgage Market
The mortgage market is constantly evolving, with new policies and trends emerging on a regular basis. Here are some of the latest developments in the mortgage market that you should be aware of.
Mortgage Rates Continue to Fall
U.S. mortgage rates fell yet again this week. Since dropping from their 2023 high of 7.13% back in March, 30-year fixed-rate loans are now hovering around 6.85% after sliding 7 percentage points to 6. This trend of falling mortgage rates is good news for homebuyers and homeowners looking to refinance.
Lower mortgage rates can make homeownership more affordable by reducing the monthly cost of borrowing. For homeowners looking to refinance, lower rates can mean significant savings over the life of the loan.
It’s not yet clear how long mortgage rates will continue to fall. However, if you’re in the market for a new home or considering refinancing your current mortgage, now may be a good time to lock in a low rate.
Mortgage Performance Improves
Mortgage performance has improved as the COVID-19 national emergency ends. Mortgage forbearance rates continue to drop, indicating that fewer homeowners are struggling to make their mortgage payments. This is a positive sign for the overall health of the housing market.
Mortgage forbearance is a temporary suspension or reduction of mortgage payments that can help homeowners who are experiencing financial hardship. As forbearance rates drop, it suggests that fewer homeowners are in need of this assistance.
The improvement in mortgage performance is likely due to a combination of factors, including government relief programs and an improving economy. As more people return to work and regain financial stability, it’s likely that mortgage performance will continue to improve.
Changes to Mortgage Fees
Starting May 1, upfront fees for loans backed by Fannie Mae and Freddie Mac were adjusted because of changes in the Loan Level Price Adjustments (LLPAs), the fees that vary from borrower to borrower based on their credit scores, down payments, types of home, and more. In some cases, people with higher credit scores may end up paying more while those with lower credit scores will pay less.
These changes are part of the Federal Housing Finance Agency’s (FHFA) broader examination of fees to provide “equitable and sustainable access to homeownership” and shore up capital at Freddie Mac and Fannie Mae.
If you’re considering applying for a mortgage backed by Fannie Mae or Freddie Mac, it’s important to understand how these changes may affect your upfront fees. Be sure to carefully review your loan documents and ask your lender any questions you may have.
These are just a few of the latest developments in the mortgage market. It’s important to stay up-to-date on these trends and changes in order to make informed decisions about your mortgage.