Rising rates may discourage the regular home buyers, but they aren’t the market-makers. All that matters is how many of the desperate-buyers-full-of-cash are left, and with the new listings trickling in, we only need a few!
It’s Thursday and thus time once again for Freddie Mac’s weekly mortgage rate survey. An industry standard report dating back to the 70s, Freddie’s survey rate is standby for multiple news organizations to print their once-a-week mortgage rate color. The net effect is the appearance of a deafening consensus in financial media regarding the going 30yr fixed rate.
The problem is that all of those sources are simply reporting Freddie’s survey headline. The bigger problem is that Freddie’s survey headline often gives the wrong impression about where rates are and how they’ve been moving. This is a logical consequence of the methodology. Freddie sends the survey out on Monday, gets most of it’s responses on Mon/Tue, and then reports “this week’s mortgage rates” on Thursday.
The net effect is that the survey ends up comparing Mon/Tue rates to last week’s Mon/Tue rates. Oftentimes, that doesn’t matter. If rates aren’t moving very much from day to day, the numbers will be relatively accurate as well as the week-over-week change. It’s when volatility surges that the mixed signals show up. And volatility is surging!
Rates aren’t merely changing a lot from day to day, they’re changing multiple times per day in many recent occasions. This week’s landscape was especially troublesome for the Freddie survey because Monday’s rates were, by far, the lowest. In fact, after adjusting for the upfront points and the fact that many of Freddie’s respondents probably didn’t even look past last Friday’s rate offerings before responding, the 3.85% headline isn’t too terribly far from reality.
To be clear, rates are no longer anywhere close to that low. The average lender is now definitively up and over 4.25% for the first time since early 2019. In other words, today’s rates are the highest in almost 3 years.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-03102022
CARLSBAD — After reviewing thousands of applicants, the city is in contract to sell 11 affordable homes in Bressi Ranch.
The Carlsbad City Council approved the sales during its March 8 meeting allowing its Housing Services department to carry out the sales in the Mulberry and Rose Bay developments.
According to Nancy Melander, a senior program manager with Carlsbad’s Housing Services, said her department was overwhelmed by the number of applications. In total, more than 2,500 people applied once the city announced the sale of the homes on Nov. 19, 2021. The deadline was Jan. 17, according to the staff report.
The city paid about $2.7 million for the units, which ranged between $230,000 to $360,000 per unit, Melander said.
“Staff knew there was going to be a lot of high interest,” Melander said. “We definitely didn’t think we were going to get applications in the thousands. In the first week that applications were open, we had phone calls non-stop at all hours. What that says is we don’t have enough affordable housing.”
The affordable units are part of the city’s reselling program, where the city purchases affordable units at risk of becoming market rate, or not, when they become available. The city vets each applicant and ensures no home is sold to an investor or unqualified prospect, Melander said.
The homes are bought using funds from the Community Development Block Grants and Housing Trust Fund, she said.
The city checks a couple’s or individual’s income, credit score, assets and must be a first-time homebuyer and reside in the county, to name a few, she added. She said an applicant must be at 80% or below of the area median income, or AMI.
However, the sales went to households with 50% or less of the AMI. A household of four at 50% of AMI has an annual income of $60,600, Melander said. Of the homes sold, eight have two bedrooms, while two have three bedrooms and one with four bedrooms.
The homes are bought using funds from the Community Development Block Grants and Housing Trust Fund, she said.
Additionally, under the housing program, the city is given the first option to buy affordable units through agreements with developers, Melander said.
“There is a lot of high demand, but supply is very low,” she explained. “Unfortunately, our program is based on the market. We purchase these units when they come available on the market.”
Councilman Peder Norby said while the program is great, he would like to see a more robust program to allow home sellers more flexibility with a home’s equity plus more stock. He also said it may be wise for the city to reinstate a program where they help cover closing costs.
Norby said when he bought his first home, the city helped cover those costs making it easier for him to get into the “housing ladder.” Currently, the city splits a home’s equity with the home seller, although it’s on a case-by-case basis, Melander said.
https://thecoastnews.com/after-thousands-apply-carlsbad-approves-sale-of-11-affordable-homes/
Are they selling them to a bunch of rich dudes that agreed to rent them to low income people for 50 years like Encinitas did ? A sham.