How about those rates!

I know I sound like an old person when I mention that when I bought my first house 9% was considered a good rate. Houses were less expensive back then in the late 1980s and real wages were probably about the same.

Borrowers with the highest credit scores get the lowest interest rates.

A decade ago rates were about 2.5% higher than they are today and were considered very low.

chart with mortgage rates
Mortgage rate survey

Mortgage interest rates spring 2021

Mortgage interest rates are down again. They are lower than they were a year ago and up slightly from the all-time low earlier this year.

Mortgage interest rates – one year

To get a better view here is a chart that goes back to 2018

The low-interest rates do make buying a home more affordable. Don’t panic when they go back up to 3% because they will.

For those who are struggling with housing

Some folks made it through the pandemic with the same job or a better job and with bigger savings accounts due to less

spending during the various lockdowns.

There is help for people who are struggling to pay their mortgage. Here is information on the Consumer Financial Protection Bureau website.

Rental assistance is also coming soon through Minnesota Housing, check the website for details.

The last year has been very unkind to women and to hourly wage workers when it comes to job loss.

If you are struggling to pay rent or make mortgage payments please be proactive. Forbearance programs are fairly painless. The period of the mortgage is extended and missed payments are tacked onto the end.

As a general resource, I always recommend the Minnesota Home Ownership Center for home buyers and homeowners. They offer a variety of programs including counseling and foreclosure prevention.

In other news CARES Act Foreclosure Moratorium – (applies to FHA, VA, USDA, Fannie Mae and Freddie Mac backed mortgages – about 70 percent of homeowners) has been extended to June 30, 2021

The CDC Eviction Moratorium – Expires March 31 (applies to renters)

Find updates on the Minnesota Home Ownership Center website under “news”.

green house
House on Michigan Street – West 7th neighborhood

Lowest mortgage interest rates

Mortgage interest rates are oh so low. Some homeowners have managed to refinance. Refinancing can mean lower monthly payments. For those who are facing unemployment now may be the best time to refinance.

Lower interest rates will provide a little relief for homebuyers who will be experiencing high prices and a strong seller’s market in 2021.

The rates in the chart are averages from FreddieMac and are available to people who have great credit scores and incomes that afford mortgage payments.

chart with mortgage rates
FreddieMac average mortgage rates for the week ending 1/7/2021

At one point I said that mortgage interest rates would not go below 3%. I am very happy to be wrong about this.

Loan forbearance programs during the pandemic

During the great recession, we had foreclosures and short sales. As I recall there were loan modification programs for borrowers but the rules kept changing about who was eligible and who was not. Sometimes people who were behind on mortgage payments were eligible and sometimes they were not.

During the current crisis and it is a crisis there are forbearance programs and various laws that prevent foreclosure.  Forbearance programs allow borrowers to skip payments. The payments are added to the end of the loan repayment period.

There is help for those who are struggling to make mortgage payments. The Minnesota Homeownership Center is a great place to start. They are a non-profit and provide free counseling and are generally knowledgeable about every program out there that can help homeowners.

As always be aware of scams. I am not aware of the latest but I know there are always people out there ready to trick people out of their homes and life savings. If a program sounds too good to be true the Minnesota Homeownership Center can help with that and the Minnesota Attorney General’s website has some useful information on it about scams.

Don’t be afraid to talk directly to your lender if that is possible. If you have n FHA loan there may be federal assistance. Serious mortgage delinquencies are up from a year ago. the last number I saw was at around 7% as compared with less than 4% last year.

Mortgage rates hit new low

This year has been the year for new lows as mortgage interest rates hit new lows for the 10th time. I told a client earlier this year that I didn’t think rates would go below 3%. I am happy to be wrong.

 

graph of mortgage rates
FreddieMac mortgage rate survey

Speaking of records, 2020 has been breaking a lot of long-standing records.  Did you know that we hit an all-time high in unemployment in 2020? 14.70 percent in April of 2020.