01/16/2024 · 1:07 pm

30-year Mortgage Rates Remain Below 7% – Increasing Buyers Purchasing Power

If you want to buy a home, it’s important to know how mortgage rates impact what you can afford and how much you’ll pay each month. Fortunately, rates for 30-year fixed mortgages have come down significantly since the end of October and are currently under 7%, according to Freddie Mac (see graph below) and many analysts predict a continued easing of mortgages rates throughout 2024.

This recent trend is great news for buyers. As a recent article from Bankrate says:

“The rate cool-off somewhat eases the housing affordability squeeze.”

And according to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA):

“MBA expects that affordability conditions will continue to improve as mortgage rates decline . . .”

Here’s a bit more context on how this could help with your plans to buy a home.

How Mortgage Rates Affect Your Search for a Home

Understanding the connection between mortgage rates and your monthly home payment is crucial for understanding the sales price you can afford. The chart below illustrates how your ability to afford a home changes when mortgage rates shift. (see chart below):

More information about interest rates at Freddie Mac

Gena Glaze

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01/15/2024 · 8:24 pm

South Carolina Named the Fastest Growing State in the Nation

Newcomers to S.C. greatly accelerated during the pandemic years as remote employment took hold and that trend has continued. South Carolina was recently crowned the fastest-growing state in the nation by the U.S. Census Bureau based on percentage growth, adding roughly 90,000 additional residents to the population.

Top 10 States or State Equivalent by Percent Growth: 2022 to 2023
RankGeographic AreaApril 1, 2020 (Estimates Base)July 1, 2022July 1, 2023Percent Growth
1South Carolina5,118,4225,282,9555,373,5551.7
2Florida21,538,21622,245,52122,610,7261.6
3Texas29,145,45930,029,84830,503,3011.6
4Idaho1,839,1171,938,9961,964,7261.3
5North Carolina10,439,45910,695,96510,835,4911.3
6Delaware989,9461,019,4591,031,8901.2
7District of Columbia689,548670,949678,9721.2
8Tennessee6,910,7867,048,9767,126,4891.1
9Utah3,271,6143,381,2363,417,7341.1
10Georgia10,713,77110,913,15011,029,2271.1

This population boom created more demand for housing, but inventory has been constrained, keeping prices afloat and putting pressures on rents.

The population growth is mainly concentrated in larger cities with populations declining in some rural areas. Local governments increasingly engage in managing growth and pursuing affordable housing options for workforce.

Mortgage interest rates have fallen from their peak of nearly 8 percent in 2023, and many financial experts speculate interest rates will continue to moderate. Inventory is expected to rise, and lower interest rates should help make homes more affordable. Whether the rising supply can keep up with demand remains to be seen.

Gena Glaze

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2023 – A Year In Review – Charleston Area Real Estate SC

Seasonal Flow of Business Returns. We seem to have exited the “pandemic years” when real estate was busy at all points in the year and we have returned to a more normal seasonal flow of business as shown in the chart below. All three lines (2022, 2023, and the 15 year average) track each other closely throughout the year. The orange line represents ratified contracts by week 2022, the green line is 2023 and the blue line is the 15-year average for each week.

As inventory was still constrained and interest rates begin retreating, written sales market wide finished -7% in December of ’23 versus December of ‘22

 The Median sale price in the Charleston MLS continues to stay in a tight band between $400k and $420k where it has been for most of the last 20 months.

Inventory remained below what is needed for a balanced market throughout 2023.         At end of December active Inventory stood at approximately 2,800 listings. This level of inventory is a significant increase over the 1,035 listing “floor” that we set in February of 2022, but still below what is needed for a balanced market.  3,000 additional listings are needed market wide to achieve a balanced market (5 months of inventory)

The gap between the number of listings available for sale and the number of listings needed to maintain a balanced market is expressed visually in the chart below.

The Good News` – Although inventory is still constrained, we are starting to see a trend of new listings hitting the market increasing over the same month a year prior for the first time in two years. This has happened for three consecutive months.

Absorption Rate                                       By the end of the 2023, The Charleston market had about eight weeks of inventory as a whole, still trending more toward a seller’s market (this can vary by price range and specific location). The most active areas have inventory levels in the 5–9-week range.

New Construction                                       At December’s end, new construction represented approximately 49% of pending contracts in the MLS and new construction comprised about 33% of the closings and new homes represented approximately 32% of the available inventory.

Looking forward for what 2024 will bring!

Gena Glaze

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01/15/2024 · 2:05 pm
01/05/2024 · 11:39 am

What is a 2-1 Buydown?

Sellers, including home builders, will sometimes use 2-1 buydowns as an incentive for potential purchasers

A 2-1 buydown is a concession or incentive negotiated with a seller or builder that temporarily reduces a buyer’s mortgage interest rate by 2 percentage points the first year and 1 percentage point the second year of your mortgage. The third year the interest rate goes back to the fixed rate obtained from the lender.

  • A 2-1 buydown is a type of financing that lowers the interest rate on a mortgage for the first two years before it rises to the regular, permanent rate.
  • The rate is typically two percentage points lower during the first year and one percentage point lower in the second year.
  • Sellers, including home builders, may offer a 2-1 buydown to make a property more attractive to buyers.
  • 2-1 buydowns can be a good deal for homebuyers, provided that they will be able to afford the higher monthly payments once those begin.

Lenders charge an additional fee to make up for the interest that they won’t be receiving in those early years. A homebuyer or seller can pay for a buydown. That payment may be in the form of mortgage points, or a lump sum deposited in an escrow account with the lender and used to subsidize the borrower’s reduced monthly payments.

The 2-1 buydown is sometimes offered as an incentive and sometimes it is part of the buyer’s negotiations.

Example

Suppose a new home builder is offering a 2-1 buydown on its new homes. If the prevailing interest rate on 30-year mortgages is 6% for a particular buyer, this homebuyer could get a mortgage that charged just 4% in the first year, then 5% in the second year, and 6% starting in year three and continuing through the remaining years. The reduced payments in those first two years can result in substantial savings.

Gena Glaze

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12/23/2023 · 12:35 am

Housing Predictions 2024

What’s on the horizon for the new year?

The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.

Mortgage Rates Expected To Ease

Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:

“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”

Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”

The Supply of Homes for Sale May Grow

As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”

Home Price Growth Should Moderate

And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:

“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.” 

To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:

“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”

Bottom Line

Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, I would love to help!

Gena Glaze

KCM

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12/22/2023 · 12:36 pm

Ho!-Ho!-Ho! Lower Mortage Rates for The Holidays!

Mortgage rates stayed below 7% for the second week in a row.

The 30-year, fixed mortgage rate averaged 6.67% for the week ending Dec. 21, according to Freddie Mac‘s Primary Mortgage Market Survey. That’s down from last week’s 6.95% and up from 6.27% the same week a year ago. Meanwhile, HousingWire’s Mortgage Rates Center showed Optimal Blue’s average 30-year fixed rate on conventional loans at 6.68% on Thursday. 

“Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market and builders already are starting to feel the positive effects,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “A rise in homebuilder confidence, followed by new home construction reaching its highest level since May, signals a response to meet heightened demand as current inventory remains low.”

Lower rates will have a positive impact on affordability, Lisa Sturtevant, chief economist at Bright MLS, said in a statement. Bright MLS forecasts the average on a fixed-rate mortgage rate to fall to 6.5% by mid-year and to decline further to 6.2% by the end of next year. With a rate of 6.2%, the typical monthly payment on a loan for a $400,000 home would be about $2,700, down from $3,000 with a 7.5% rate.

Locally, we have seen rates as low as 6.625% PAR for top tier borrowers on a 30 year loan and properly qualified borrowers could buy down to 5.99% for less than 2 points.  To put this in perspective, 45 days ago mortgage rates were sitting at roughly 8% for top tier borrowers, on a 500k mortgage this equates to $467/mo lower payments now compared to 45 days ago.

Gena Glaze

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12/16/2023 · 9:09 am

Battery Park Development Could Transform North Charleston Naval Base

It’s been more than 30 years since the Lowcountry learned the Charleston Naval Base would close, shutting down the tri-county’s largest employer

Three decades later, people are learning what the future has in store for the north end of the former base in what is to be called Battery Park. It’s poised to become North Charleston’s new urban center, with development across the northern base that would connect the Park Circle area to the city’s south end with businesses, entertainment and thousands of new residences

The development scale rivals some of the largest in the greater Charleston area: 3,000 to 4,500 new residences along with a minimum of 825,000 square feet — possibly much more — of commercial space that will include entertainment venues, restaurants, shops and offices.

According to the “master developer” group North Charleston has picked, both the Battery Park and Navy Yard Charleston plans together could create 17,300 construction jobs, 11,900 permanent jobs and $57.4 million in annual tax revenue.

Here’s the proposed schedule for construction, starting next year, according to the developers’ timeline:

  • 2024: Civic Pavilion across Noisette Creek from Riverfront Park, facing a planned “event lawn.” The pavilion would be adapted from what’s known as Building 1601 and “can serve as a public market, event space, entertainment venue and interpretive center,” according to the proposal.
  • 2025: Pavilion completed. Infrastructure, hotel and restaurant, multi-family housing, retail and parking garage construction begin.
  • 2026: Townhouses and second phase of office, multi-family residential, retail and restaurant construction start.
  • 2027: Phase 3 of infrastructure and multi-family housing. From earlier phases, 325 multi-family units and 238,800 square feet of commercial space ready to lease.
  • 2028: Phase 3 of retail and restaurant construction, more multi-family housing start. Another 635 residences ready to lease, and 423,000 additional square feet of commercial space.
  • 2029-30: Remaining multi-family, office, retail and restaurant construction begin. Another 886 homes and 15,000 square feet of commercial to lease.
  • 2031-32: Final 1,102 residential units and 215,000 square feet commercial space to lease.

Over nine years, the project schedule calls for 2,958 new residences and 891,800 square feet of commercial space — assuming North Charleston gets title to the remaining 21 acres of federal land.

Construction at Battery Park could begin next year.

Additional Links:

Click to access 6578cf96d342f.pdf.pdf

Click to access 6578cee5789d1.pdf.pdf

Post and Courier Article

Gena Glaze

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12/14/2023 · 12:52 pm

Feds Pause Rates and Expect Rate Cuts in 2024

The Federal Open Markets Committee (FOMC) held its short-term policy interest rate steady at its last meeting of the year on Wednesday (12-13-23). It was the fourth pause recorded in 2023. 

Federal Reserve Chairman Jerome Powell said that while inflation remains ‘elevated,’ the Fed anticipates making three 25 basis point rate cuts in 2024, a signal to Investors that hikes are over and this news is already causing some reduction in rates.

The bond market responded in kind, with the 10-year Treasury yield falling to 4.0% late afternoon on Wednesday, its lowest level since late July.  

 Mike Fratantoni, the chief economist of the Mortgage Bankers Association, stated. “This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”

In 2023, the Fed hiked the benchmark federal funds rate by a quarter-point at four meetings, most recently in July.

Rate relief in 2024

“The Fed’s projections for 2024 will continue to anticipate a normalization in monetary policy in the year ahead,” said Realtor.com Chief Economist Danielle Hale.

Hale has forecast mortgage rates to ease further in 2024 as inflation improves and Fed rate cuts draw closer.

“Mortgage rates could near 6.5% by the end of the year, a key factor in starting to provide affordability relief to homebuyers,” Hale said. 

Among the first customers to benefit from reduced interest rates would be those who are currently making payments on mortgages with high rates. 

According to TransUnion data, since January 2021, there have been 3 million new mortgages originated with interest rates of 6% of higher, the total balance of which being over $1 Trillion. The monthly payments of each of these high interest mortgages averages $2,201.

If interest rates dropped to even 5.5%, it could result in significant savings for homeowners, as refinancing at that rate could result in an average monthly payment of $1,917 for them, a reduction of $284 every month, said Michele Raneri, VP of U.S. research and consulting at TransUnion. “This would represent nearly $300 a month that these homeowners would be able to use elsewhere in this continued high cost-of-living environment in which every dollar counts.”

Gena Glaze

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12/09/2023 · 10:07 am

What is a CL-100?  S.C. Real Estate

A CL100 refers to a specialized inspection completed by a licensed pest control company and documented on the Clemson form 100. It is the official Wood Infestation Report for South Carolina.  The reports are only valid for 30 days and are a common inspection performed in a real estate transaction.

The Department of Pesticide Regulations at Clemson University is the enforcement and investigative authority in the state of South Carolina for pesticide use, alleged pesticide misuse, sub-standard termite treatments, and wood infestation reports.

A Wood Infestation Report is a report of visible infestation of damage caused by insects (e.g., termites and beetles) and active wood destroying fungi / decay (moisture damage) in accessible areas of the structure, with the inspection for decay fungi usually limited to the portion of the structure below the level of the first main floor. 

The CL100 is often referred to as “The Termite Inspection” but the inspection includes more than an inspection of active termites, it also details previous termite damage and other types of wood-destroying organisms and moisture conditions.

For more information, Contact Gena Glaze

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12/07/2023 · 8:58 pm

The 30-year Fixed-Rate Mortgage Decreased for The Sixth Straight Week

The 30-year fixed-rate mortgage (FRM) decreased for the sixth straight week, from last week to an average of 7.03% this week, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac released Thursday.

This week’s numbers:

  • 30-year fixed-rate mortgage averaged 7.03%, down from last week when it averaged 7.22%. A year ago at this time, the 30-year FRM averaged 6.33%.
  • 15-year fixed-rate mortgage averaged 6.29%, down from last week when it averaged 6.56%. A year ago at this time, the 15-year FRM averaged 5.67%.

Realtor.com Economist Jiayi Xu commented: “The Freddie Mac fixed rate for a 30-year mortgage continued its downward trend to 7.03 percent this week, down from 7.22 percent last week. While Fed Chair Powell stated last Friday that it was too early to conclude that the current monetary policy is restrictive enough to tame inflation down to the 2% target, the cooling October job openings data, a measure of labor demand, released on Tuesday, boosted investors’ confidence that the Federal Reserve was probably done with rate hikes. As a result, the 10-year treasury yield dropped to its lowest level in three months. Looking ahead, we predict that sustained improvement in inflation will bring the mortgage rate down to 6.5% by the end of 2024.

– Information Curated from ismedia

Gena Glaze

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