The New Year Starts Off With Mortgage Rates Below Last Year’s Average

A new year has brought good news for the housing industry. The first week reported that the average U.S. fixed rate for a 30-year fixed mortgage averaged at a low 3.72%. The findings were 80 basis points below data reported a week earlier.

George Ratiu, Realtor.com’s chief economist said, “The conventional 30-year loan slid 2 basis points to 3.72% in the first week of 2020. Rates remain about 80 basis points lower than the first week of

2019.”

Ratiu predicts that employment and wage gains will fuel the housing industry. The economy will maintain a moderate growth trajectory this year.

The 15-year FRM also was at a low 3.16% which was down from this time last year’s reportings of 3.99%. The average rate dropped in just one week from 3.19% to 3.16%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage also averaged 3.46% which was lower than the 3.98% reported this time last year.

“As mortgage rates remain favorable, buyers are likely to get a head start on the spring shopping season in the first couple of months of this year,” Ratiu said. “A stronger infusion of new homes in affordable price ranges would be a welcome gift for the New Year.”

Sam Khater, Freddie Mac’s chief economist, believes the rates have maintained around 3.7% for the last couple of months because of ” the combination of improved economic data and market sentiment has led to stability in mortgage rates.”

“The low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices,” said Sam Khater.

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Job Growth and Lower Mortgage Rates Boosting Single-Family Housing

This year the housing industry has been on an uphill victory. According to NAHB Chief Economist Robert Dietz newsletter, Eye on the Economy, there are two main factors that are helping the single-family housing sector.

Job growth has been on a positive path in 2019. It is reported that there is a historically low unemployment rate at 3.7%. In June 2019 there were 224,000 jobs added to the country’s workforce.

The first six month of the year saw an average of 172,000 new jobs per month.

In the residential construction industry alone the increase was 21,000 jobs in June. The average for the first six month of the year in residential construction stands at 5,800 per month. Since the recession, there have been a total of 923,800 positions added in residential construction.

Also to aid in the booming housing industry is lower mortgage rates. Freddie Mac reports that the averaging 30-year fixed-rate is 3.8%. This is the fifth straight month that mortgage rates have fallen making this one of the best times to finance a home.

A recent industry survey shows that the mortgage loan applications for both purchase and refinance surged in the first week of June 2019.

In the most recent survey put out by the Freddie Mac’s research team it states that this “will help sustain the momentum in the housing market in 2019.”

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Land in Louisiana Still Available for Building One-Story Homes

New Orleans is a big city with many surrounding suburbs, and even though it is a populous area, there is still a lot of land in Louisiana on which to build.  The area is less dense than many cities across the country with very little land constraints.  No wonder the US Census Bureau’s Survey of Construction (SOC) reported that in 2015 that single-story new construction homes in Louisiana were the highest in the nation.

The SOC is a monthly and annual report that is organized by the National Association of Home Builders (NAHB) that surveys important information corresponding to the homebuilding industry.  Examples of data gathered include start and completion dates of new homes for sale, new homes sales prices, square footage of new houses and the number of bedrooms in new homes built. The SOC is an important factor in determining where the country’s economy stands.

Nationwide the data found that 58% of new construction houses built in 2015 were two or more stories and 42% were one story.  The country is divided between ten divisions, Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, New England, Middle Atlantic, and South Atlantic. In the Pacific division 69% were two or more stories, in the Mountain only 47% were two or more stories, in West North Central 52% were two or more stories, in West South Central only 45% were two or more stories, in East North Central only 49% were two or more stories, in East South Central 58% were two or more stories, in New England 84% were two or more stories, in Middle Atlantic 80% were two or more stories and in South Atlantic 66% were two or more stories.

The Northeast had the largest number of two or more stories being built in 2015 due to high density with little land which made lot prices very expensive.  Luckily Louisiana which is in the West South Central division has reasonable lot prices making it an attractive place to buy a lot and then build a new home.  If you happen to live in St. Tammany Parish in Southeast Louisiana, Ron Lee Homes, a new, custom home builder, designs and builds new homes to your specifications on lots that we own, lots that you own, or lots that you may be interested in buying.  Land in local subdivisions is plentifully available for new home buyers interested in building their own home.  We can even make recommendations as to where you might want to build depending on your life situation, finances, and housing requirements.  Contact Us Today to get started talking about building a new, custom home on a local homesite.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.


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