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The 30-year fixed-rate mortgage (FRM) averaged 3.05%, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac. This marks a peak in rates not seen since April.

Mortgage details:

– 30-year fixed-rate mortgage averaged 3.05% with an average 0.7 point for the week ending Oct. 14, 2021, up from last week when it averaged 2.99%. Last year, the 30-year FRM averaged 2.81%.

– 15-year fixed-rate mortgage averaged 2.30% with an average 0.7 point, up from last week when it averaged 2.23%. Last year, the 15-year FRM averaged 2.35%.

– 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.55% with an average 0.2 point, up from last week when it averaged 2.52%. Last year, the 5-year ARM averaged 2.90%.

How the industry is responding:

“The 30-year fixed-rate mortgage rose to its highest point since April. As inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing.”

“Historically speaking, rates are still low, but many potential homebuyers are staying on the sidelines due to high home price growth. Rising mortgage rates combined with growing home prices make affordability more challenging for potential homebuyers.” — Sam Khater, Freddie Mac Chief Economist

“A question that pops up for millions of homeowners is whether it is a good time to sell their home. Homeowners typically sell their home after 16 years, according to the U.S. Census Bureau. Meanwhile, there are about 20.2 million homeowners that purchased their home in the last 10 to 19 years. Thus, many of these homeowners may wonder if they should sell their home now or wait.

“Here are a couple of big reasons why it’s a good time to sell. First of all, there is no doubt that it’s a seller’s market. Although the market typically slows down in fall, there is still stiff competition among buyers, with multiple offers for each home due to low inventory. As a result, sellers continue to have strong negotiating power as most of them can sell their home for higher than the asking price.

“Comparing sales volume with current inventory, we are also seeing that home-buying activity is very strong. Specifically, more than half of the inventory was sold in August since the sales to inventory ratio was 0.51. Nevertheless, the sales to inventory ratio was only 0.07 back in 2009. Remember that a higher ratio implies a seller’s market, while a lower ratio implies a buyer’s market.” — Nadia Evangelou, National Association of REALTORS ® Senior Economist and Director of Forecasting

“The Freddie Mac fixed rate for a 30-year loan rose this week, despite the downward trajectory of the 10-year Treasury yield. The rate rose 6 basis points to 3.05%, as investors reacted to higher-than-expected inflation and more than 10 million unfilled job openings. Investors are conflicted about the economic momentum, with clear signs of growth on one hand, and the unknown of an expected monetary tightening on the other. With inflation at a 30-year high and holding, mortgage rates are expected to continue rising.

“For real estate markets, financing costs remain favorable, offering first-time buyers a strong incentive to keep looking. Halfway through October, the number of homes for sale has improved compared to the overheated first half of this year, leading to slower price growth. It seems that buyers and sellers are finally taking a step back from the pandemic-induced stampede of the past year to regain their footing and reassess their next steps. Today’s buyers should evaluate the impact that spending an extra $125 a month on a median home mortgage will have on their monthly budgets and longer-term finances.” — George Ratiu, realtor.com® Manager of Economic Research

Existing-home sales backed up in August, after two consecutive months of increases, according to the National Association of REALTORS® (NAR). Each of the four major U.S. regions experienced declines on both a MoM and YoY basis.

Total existing-home sales decreased by 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. Year-over-year, sales dropped 1.5% from last year (5.97 million in August 2020).

Single-family home sales decreased to a seasonally adjusted annual rate of 5.19 million in August, down 1.9% from 5.29 million in July and down 2.8% from last year.

Existing condo and co-op sales recorded at a seasonally adjusted annual rate of 690,000 units in August, down 2.8% from 710,000 in July but up 9.5% from last year.

By Region:

Midwest
Existing-Home Sales: 1.37 million (-2.1% YoY) Median Price: $272,200 (+10.5% YoY)

Northeast
Existing-Home Sales: 730,000 (-2.7% YoY) Median Price: $407,800 (+16.8% YoY)

South
Existing-Home Sales: 2.55 million (-0.8% YoY) Median Price: $303,200 (+12.8% YoY)

West
Existing-Home Sales: 1.23 million (-1.6% YoY) Median Price: $507,900 (+11.4% YoY)

What the industry is saying:

“Sales slipped a bit in August as prices rose nationwide. Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory. High home prices make for an unbalanced market, but prices would normalize with more supply. Securing a home is still a major challenge for many prospective buyers. A number of potential buyers have merely paused their search, but their desire and need for a home remain.” — Lawrence Yun, Chief Economist, NAR

“We will continue working with federal policymakers and stakeholders from across the industry in an effort to increase housing supply and ensure the American Dream of homeownership remains accessible to as many people as possible.” — Charlie Oppler, President, NAR

“While housing activity has clearly cooled from its frenzy during the midst of the pandemic, home sales remain well-above the pre-pandemic pace and the median sales price continues to grow, albeit at a slower pace. A still-large number of young households are driving housing market activity, and leveraging the boost in purchasing power provided by low mortgage rates. Despite this, rising home prices mean that today’s buyers are spending larger shares of their paychecks to buy the typical home, and that trend could eventually cause some buyers to put home searches on hold, especially if mortgage rates begin to rise in response to expected tapering of asset purchases by the Fed later this year.

“Those who continue their home searches in the cooler months ahead are likely to be pleasantly surprised. Not only do we expect to see the usual seasonal respite from the competitiveness of the spring and summer home-buying season—making early fall the best time to buy a home—the return of sellers to the housing market driven by the improving economy and diminishing health risks could accentuate this trend.

“Additionally, recent construction figures show that builders continued to ramp up production in August and their outlook remained high in September, even as supply-chain challenges continue. These modest improvements are welcome, but haven’t changed the big-picture state: there are not enough homes for sale. Despite the recent improvement, single-family construction would still need to double to close the gap with household formation that accumulated over the last decade within the next five to six years.” — Danielle Hale, Chief Economist, realtor.com®

“Moving into the fall we continue to expect to see year-over-year declines in home sales related primarily to a return to normal seasonal patterns. This is a result of the base-effect created by the abnormal surge in home sales we saw in late Q3 and Q4 of 2020. The economy has continued to strengthen despite the recent surge in the Delta variant and we see the fundamentals behind housing demand remain strong looking at the rest of 2021 and into 2022.

“Home prices remain our primary source of concern as affordability becomes an increasing challenge, particularly for first time homebuyers who have not had the opportunity to benefit from the wealth created from recent surges in home equity. We expect that the Federal Reserve will likely give further indication on timing this week on reductions in Mortgage Backed Securities purchases.

“In multiple meetings, the Fed has pointed to trends in home prices as potential justification for reducing asset purchases, implying the upward pressure on mortgage rates would be useful in helping slow the pace of home price appreciation. Overall we think home sales will remain strong going into next year, but we should see inventory levels continue to slowly trend toward more normal levels and home price appreciation begin to slow over time.” — Ruben Gonzalez, Chief Economist, Keller Williams

For more information, please visit www.nar.realtor.

When you want a new home, the last thing you want is for the process to drag on for months. While you could spend hours online, you will get much better results by working with a REALTOR® who knows the local area, what type of home you are looking for and how much you’re willing to spend. If you’re ready to get that new home you’ve always wanted, here’s how using an agent can make the process much easier:

Avoid Problems at Closing

When you have gone through the process of buying your home, you don’t want any problems at closing to throw your purchase into chaos. By placing your trust in a REALTOR®, it lowers the chances of that happening significantly. From making sure the title to the property is clear to ensuring the lender has met all deadlines on financing, an agent will help you ease through closing and get you your new home much faster.

Practice With Negotiations

When you find the home you and your family want, you may let your emotions do the talking for you when it comes to negotiating. As a result, it may take longer to get a deal finalized. By having your real estate agent handle all negotiations, your deal will more than likely get done much faster and at a better price than you probably could have negotiated yourself.

Know the Local Area

When you find a home in which you may be interested, you may not stop to think about its location. However, a smart REALTOR® will already have a thorough knowledge of the local area and neighborhoods, and can perhaps steer you in the right direction. For example, if you want a home with plenty of privacy, an agent may know that a home you’re interested in is near a spot where a new road will soon be built or a shopping center will be under construction. In these situations, they can help you locate other similar homes that offer the privacy you desire.

Handle the Paperwork

Finally, any real estate transaction involves tons of paperwork. If you try to handle this on your own, mistakes will be made and the transaction may never get completed. By letting your REALTOR® take charge of the paperwork, your purchase can be done quicker and with no mistakes being made along the way.

Rather than let months go by only to see a home of your dreams slip away, allow an agent to take charge of the situation and help you find your new home quickly and easily!

Anica Oaks is a freelance writer who hails from San Francisco. When she’s not writing, she’s enjoying her time outside with her dogs. Oaks recommends working with the Deborah Sumey Team if you’re looking to work with an agent in the Ocala, Florida, area. Keep up with her on Twitter @anicaoaks.

With the real estate market experiencing surging prices, scant inventories and a backlog of new home construction, many consumers are wondering if what’s gone up must come back down—in other words, are we headed for another housing market crash? Let’s take a closer look.

Think Back to the Great Recession

The unforeseen housing market crash 15 years ago ignited a worldwide recession. Fueled by low interest rates, loose mortgage-lending standards and the nation’s unshakeable faith in homeownership, home values rose at record rates year-after-year. When the housing bubble burst, roughly nine million families lost their homes to foreclosure or short sale between 2006 and 2014. Housing values plunged 30% or more, homeowners lost a collective $7 trillion and it took nearly a decade for most markets to recover. Even today, several real estate markets have not fully recovered.

With the robust market activity we’ve seen lately, could there be a market crash in the near future? The short answer is “not likely.” Today’s market book cannot be sustained completely, but a crash as serious as the one from 15 years ago is unlikely because of a few important factors.

Factor No. 1: More Stringent Lending Standards

Loose mortgage lending practices ultimately brought down some of the nation’s largest banks and mortgage companies. The fallout forced Congress and federal regulators to make significant adjustments that have fundamentally changed how mortgage lending is regulated.

Since then, standards have been raised and the process of obtaining a mortgage is now more transparent. The “anyone can get one” loans of the past are illegal; now borrowers undergo stricter income, credit and asset checks. An entirely new regulatory agency, the Consumer Financial Protection Bureau, was created to enforce this new regulatory framework. Lenders who do not comply with these standards may face heavy penalties.

As a result, the housing finance marketplace is now more robust and safer than it was 15 years ago. Any dip in the housing market will be cushioned by these stricter regulations.

Factor No. 2: Pandemic Mortgage Forbearance

When the housing market crashed in 2007, the influx of foreclosures pumped housing supply into areas with falling prices and weak labor markets, while also preventing recently foreclosed borrowers from re-entering the market as buyers. According to the Federal Reserve, foreclosures during a time of high unemployment could depress prices, plunging homeowners across the country deeper into negative equity.

However, in the pandemic era, the effects of mass unemployment bear little resemblance to the Great Recession, thanks in large part to forbearance programs that have allowed homeowners to postpone their monthly mortgage payments without suffering penalties.

As of early March 2021, 2.6 million homeowners’ mortgages were in such forbearance plans. As the pandemic economy has slowly recovered, many homeowners have resumed their employment, and thus their home payments. According to CoreLogic, by the end of 2020, overall mortgage delinquencies declined 5.8% due to the forbearance program. The share of mortgages 60 to 89 days past due declined to 0.5%, lower than 0.6% in December 2019.

Housing Market Crash

It’s worth noting that serious delinquencies—defined as 90 days or more past due, including loans in foreclosure—increased when owners who owed large amounts left forbearance. By year end 2020, the serious delinquency rate was 3.9%, up from 1.2% in December 2019.

Factor No. 3: Most Homeowner’s Cushion—Equity

Equity is the difference between the current market value of your home and the amount you owe on it. In other words, it’s the portion of your home’s value that you actually own. Equity can be an incentive to stay in your home longer; if prices rise—something we’ve seen almost universally across the country in recent months—your equity increases, too.

Why does this matter? Simply put, higher levels of equity cushion homeowners from default when home values fall.

Over the past decade, American homeowners have enjoyed housing stability and growth, building up large home equity reserves. In the third quarter of 2020, the average family with a mortgage had $194,000 in home equity, and the average homeowner gained approximately $26,300 in equity over the course of the year. In contrast, 2009 saw nearly a quarter of the nation’s mortgaged homes valued for less than the amount their owners actually owed on those mortgages.

Factor No. 4: Price Growth Will Slow Down, but Continue

The sales boom followed the outbreak of the COVID-19 and surprised many real estate economists. Like most other business sectors, real estate was expected (if not required in many locations) to lock down. But by mid-April, sales were soaring as buyers, many of them millennials, took advantage of record-low mortgage interest rates. Through the remainder of 2020, rates remained below 3%, and existing home sales reached their highest level in 14 years.

A Moving Target

While no one can say for sure what will happen with the real estate sector, most experts are confident that we’ll experience a market dip, but certainly not a crash. In the meantime, there’s plenty of work available for motivated real estate professionals. Find out how Homes.com can help you connect with the current market of active buyers and sellers here!

Mark Mathis is vice president of Sales for Homes.com. For more information, please visit marketing.homes.com.