Low mortgage rates and high house prices – Orange County Register


Confusing. To confuse. Whiplash.

The World Health Organization has listed five COVID-19 variants of concern since December 2020. Of these, Delta and Omicron were the headliners. This represents an average of five new variants per year.

Globally, closures and lockdowns continue to varying degrees. Just when we think the coast is clear then it’s the return of closings, surging hospitalizations with a mixed supply chain mess.

We have lost over 800,000 lives in the United States. Planet Earth has lost more than 5.4 million. Our inability to contain the coronavirus, with all of its upheaval and uncertainty, is likely to result in fixed mortgage rates and higher house prices.

These are just two of my predictions for 2022. Here are the others:

  1. Even with inflationary pressures, Freddie Mac’s 30-year mortgage rate will remain relatively low, averaging 3.375%. The 2021 average was 2.95%.
  2. The 15-year Freddie Mac mortgage rate will average 2.625%. The 15-year-olds averaged 2.27 in 2021.
  3. The median home price for Los Angeles, Orange, San Bernardino and Riverside counties will increase by 8%.
  4. The area’s home sales volume will be flat from 2021. Hey, year-to-date sales are up 18% through Dec. 15, according to Steven Thomas of Reports on Housing. Flat always means volume.
  5. The volume of home sales in California will increase by 5%. In the first three quarters of 2021, home sales have grown by more than 11%, according to Attom Data Solutions.
  6. The prime rate will drop to 4% from its current rate of 3.25%. These are three separate quarter point increases.
  7. Nationally, total mortgage financing (purchase, refinance and refinance in cash) will decline by 25% from 2021. This represents $ 3 trillion next year, down from around $ 4 trillion in 2021. Anyone with a mortgage of less than 3% won’t go back to the well in 2022. But more and more people will tap their gigantic equity through cash refinancing.
  8. The Federal Housing Administration will reduce the FHA mortgage insurance premium it charges consumers for most mortgages. The initial PIM will drop from 1.75% to 1.25% of the loan amount. The monthly mortgage loan insurance premium will drop from 0.85% to 0.55%.
  9. The federal government will not have new COVID-19 mortgage payment forbearance programs. There will be no new deportation moratorium program in California. Some mortgagors and tenants received the help they needed. But too many others have taken advantage.

Hopefully this year’s forecast is better than last year’s. Here are my 2020 results:

  1. The 15-year fixed rate will drop below 1%. Wrong. Freddie’s 15-year fixed rate was as low as 2.1% on July 29. The 15-year rate averaged 2.27%. Not even close to 1%.
  2. Locally, the 30-year fixed will drop below 1.5% with points. Wrong. It has never gone so low.
  3. The 30-year jumbo fixed will drop below 2% with points. Wrong. He reached around 2.65% with points.
  4. The Freddie Mac fixed at 30 will average 2.65%. Wrong. It was on average 2.95%.
  5. Average Freddie Mac rates will start to increase in Q4 2021. Correct.
  6. Wall Street’s prime rate will remain at 3.25%. Correct.
  7. The moratoriums on evictions and foreclosures in California will be lifted on October 1. Okay, although tenants cannot be evicted until March 31st if they have completed an emergency rent assistance application.
  8. The median price of homes in Southern California will increase by 10%. Wrong. It has increased by more than 15%.
  9. Southern California home sales will be flat. Wrong.
  10. A first-time buyer tax credit of $ 10,000 will be enacted. Wrong.
(Staff table)

Freddie Mac Rate News: The 30-year fixed rate averaged 3.05%, down 7 basis points from last week. The 15-year fixed rate averaged 2.3%, down 4 basis points from last week.

The volume of mortgage applications fell from a week earlier, the Mortgage Bankers Association reported, but the decline was less than 0.1%.

At the end of the line : Assuming a borrower gets the 30-year average fixed rate on a compliant loan of $ 647,200, last year’s payment was $ 135 less than this week’s payment of $ 2,746.

What I see: Locally, well-qualified borrowers can obtain the following fixed rate mortgages without points: 30-year FHA at 2.375%, 15-year conventional at 2.45%, 30-year conventional at 3.125%, conventional maximum 15-year -balance ($ 647,201 to $ 970,800) at 2.625%, a conventional 30-year high-balance at 3.19% and a fixed 30-year jumbo at 3%.

Eye-catcher loan of the week: A jumbo purchase over 30 years fixed at 2.5% with 1.5 points.

Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or [email protected] Its website is www.mortgagegrader.com.

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