What is going on lately in the Real Estate Industry?
Check out this month’s update from the desk of Laura Piatt, Ticor Title Mid-Valley Sales Manager
Mortgage Rates Hit Three Percent
March 4, 2021 – Sam Khater, Chief Economist at Freddie Mac
“Since reaching a low point in January, mortgage rates have risen by more than 30 basis points, and the impact on purchase demand has been noticeable. While purchase activity remains high, it has cooled off over the last few weeks and is currently on par with early March, prior to the pandemic. However, the rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”
Price HIKE on Lumber continues. How will this affect housing inventory and costs?
“These spikes have caused the cost of building an average new single-family home to increase by more than $24,000 since mid-April 2020 according to the National Association of Home Builders standard estimates of lumber used to build the average home,” the letter stated. “Similarly, the cost of the average new multifamily unit has increased by $9,000 over the same period due to the surge in lumber prices. Additionally, lumber and engineered wood products such as OSB are a large and important component of residential and commercial remodeling projects, such as hospitals, schools, offices and restaurants.”
Renters, and Biden’s $15,000 homebuyer tax credit
The housing industry has been keeping a keen eye on President Joe Biden’s proposed $15,000 homebuyer tax credit for first-time buyers. But just how many people would actually benefit from it? According to a report from Zillow, about 9.3 million renter households in the U.S. (27.4%) would spend less than a third of their income on the monthly payment for the median home sold in their metro in 2020 if they received the full tax credit. That is, of course, if certain stars align: think a 3.5% down payment on a 30-year mortgage with a 3% interest rate.But given those factors, the tax credit would cover a borrower’s entire down payment for a home in 40 of the 50 largest U.S. metros. In metros that are considered more affordable, the tax credit would help a large percentage of renter households: in Pittsburgh, 40.5% could afford a median mortgage; in Cincinnati it would help 39.7%; in Cleveland, 39.0%; and in St. Louis, 38.5% would benefit. On the other hand, areas like California would see a smaller share of renters who could benefit — more likely in the thousands than millions.
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