Mortgage Rates in Charleston, SC Stay High – Lenders, Banks Recent Trends in Mortgage Rates (Past Six Months) Mortgage rates over the past six months have fluctuated due to several economic factors. Rates spiked mid-2023, reaching around 7.79% in late October, the highest point of the year, as the Federal Reserve (Fed) continued to battle inflation with aggressive interest rate hikes. However, rates have started to decline modestly since then, influenced by economic indicators showing cooling inflation and slower economic growth. As of November 2023, the average 30-year fixed mortgage rate sits around 7.22%, down slightly from its peak. Key factors affecting mortgage rates include inflation, Federal Reserve policies, and global economic conditions. As inflation pressures ease, mortgage rates tend to stabilize or decrease. For example, inflation decreased significantly in late 2023, which allowed for some relief in mortgage rates. Moreover, economic crises and global events (such as the Ukraine war) have added to the uncertainty, which has pushed more investors toward safer assets like U.S. Treasury bonds. This shift helped keep mortgage rates somewhat tempered, but the ongoing volatility means mortgage shoppers should still expect fluctuations. The 10-year Treasury bond plays a critical role in mortgage rates. As demand for Treasury bonds rises (often during economic uncertainty), bond yields (i.e. the return profit) fall, and mortgage rates follow. When confidence in the economy grows, bond yields rise, and mortgage rates go up. Given that the 10-year Treasury bond yield is a reliable predictor for mortgage rates, recent trends suggest that mortgage rates will hover around 6.5%-7% going into 2024, with the possibility of modest reductions as the Fed continues to assess economic recovery. Mortgage rates have been heavily influenced by the Fed’s aggressive inflation control efforts and broader economic factors, including the bond market and inflation trends. As rates move into 2024, homebuyers should anticipate rates staying above 6%, but potential reductions could occur if inflation continues to fall and economic conditions weaken. For jumbo loan borrowers, rates may be slightly higher, but still in line with overall mortgage trends.
Jumbo Mortgage Loans Charleston SC As of 2024, the conforming loan limit for a single-family home is $726,200 in most parts of the United States. Any loan amount above this threshold is considered a jumbo loan. However, in high-cost areas, including certain counties in states like California and New York, the conforming loan limit can be as high as $1,089,300. Loans exceeding this amount are also classified as jumbo loans in those areas. Jumbo loans typically come with stricter qualification requirements and higher interest rates, as they are not backed by Fannie Mae or Freddie Mac. *Jumbo mortgage rates in Charleston SC remain slightly higher than conventional mortgages due to the higher loan amounts and risks associated with them. These loans, which exceed conforming loan limits, generally have higher credit score and down payment requirements. Currently, jumbo rates average around 7.2%-7.5%, which is comparable to conventional mortgage rates but still on the higher side for larger loans. Looking ahead, experts predict that mortgage rates could trend downward throughout 2024 but will likely remain above 6%. Factors like further Fed rate hikes (if inflation resurges) or unexpected economic disruptions could slow this decline. Several analysts suggest that mortgage rates will end 2024 between 6.15% and 6.7% depending on the economic landscape. However, if the economy experiences a significant downturn or further rate cuts from the Fed, rates could drop even lower. Here in the Charleston, SC area it is no mystery that we have some very expensive residential luxury real estate, and unless borrowers have the cash to pay for it, often times they need jumbo loans. There are countless beach and water front homes on Kiawah, Seabrook Island, Daniel Island, Sullivan’s Island, Folly Beach and Mt Pleasant as well as homes downtown Charleston SC that exceed $10Million. Click see the latest updates on interest rates and lowest current mortgage rates. Jumbo mortgage loans are a higher risk for lenders. This is because if a jumbo mortgage loan defaults, it may be harder to sell a luxury residence quickly for full price because less of the population can afford pricier homes. Luxury prices are more vulnerable to market highs and lows in some cases. That is one reason lenders prefer to have a higher down payment from jumbo loan seekers. Jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan. The interest rate charged on jumbo mortgage loans is generally higher than a loan that is conforming, due to the higher risk to the lender. It can be more expensive to refinance a jumbo loan due to the closing costs, because taxes, insurance and other related costs are so much greater. Some lenders will offer the service of an extension and consolidation agreement, so that a jumbo refinancer will not have to pay for mortgage tax again on the same principal balance. In other cases, title insurance companies will offer up to a 50% discount, often required by law for those refinancing within 1 year to 10 years. The largest discount is for refinancing within one year. Some consumers seeking a jumbo mortgage choose to seek advice from a competent professional familiar with jumbo mortgage loans. OPTION 2 – Some investment brokers and/or large investment firms will lend money to their clients for jumbo luxury loans but secure it against liquid assets they manage for them. Often times these loan are lower in cost since their is collateral backing the loan to the borrower.
Charleston SC Mortgage Rates Near Record Low What to Know How Much You Can Afford? The average U.S. rate on a 30-year fixed mortgage has fallen to near its record low set earlier this month bringing down the rates for those of us here in Charleston, SC as well. The rate on the most popular mortgage dipped to 3.37% from 3.39% last week, mortgage buyer Freddie Mac said Thursday. Two weeks ago, the rate reached 3.36%, its lowest level on records dating to 1971. The average rate on the 15-year fixed mortgage, often used for refinancing, set a record low of 2.66%, down from last week’s 2.7%. Cheaper mortgages are helping fuel a modest but steady housing recovery, coupled with falling inventory the Charleston SC housing market has seen a dramatic uptick in recent months. The average rate on the 30-year loan has remained below 4% all year. And rates have fallen even further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending. The Fed said it would continue buying bonds until the job market shows substantial improvement. When home prices rise, people tend to feel wealthier and spend more freely. And consumer spending drives nearly 70% of economic activity. Charleston, SC real estate agent and ex-mortgage professional states: ” be prepared for mortgage rates to eventually increase as soon as the fed realizes they can’t afford to continue to purchase bonds in order to fund the housing market recovery. A natural housing recovery not based on artificial measures is what will achieve a proper recovery; buying bonds is simply a band-aid”. Home sales have risen from last year, and prices are rising more consistently in most areas. Charleston SC home builders as well as those around the U.S. are more confident and starting more homes. Lower rates have also persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. Not only builders in Mt. Pleasant SC, but also throughout the nation last month started construction on single-family houses and apartments at the fastest rate in more than four years, the Commerce Department said Wednesday. And they laid plans to build homes at an even fast pace in coming months — a signal of their confidence that the housing rebound will last. Other recent reports have shown marked improvement in the housing market five years after the bubble burst. Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can’t qualify for stricter lending rules or they lack the money to meet larger down payment requirements. To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount. The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans also held steady at 0.6 point. The average rate on a one-year adjustable-rate mortgage edged up to 2.60% from 2.59%. The fee for one-year adjustable rate loans was stable at 0.4 point. The average rate on a five-year adjustable-rate mortgage rose to 2.75% from 2.73%. The fee was unchanged at 0.6 point. EASY MORTGAGE CALCULATOR Some Content By: USAToday.com
Home Sales Increasing Charleston, South Carolina – Real Estate Market Better Existing-home sales kept up their recovery in July, rising 2.3% as prices jumped 9.4% from a year ago, according to the Charleston Trident Association of Realtors, but the market’s progress disappointed analysts who expected more. Smaller inventories of homes for sale let sellers push prices higher, the association said. The average price of a new home rose 9.4% to $187,300, aided by a shift in the mix of homes sold, with fewer low-end units included. “I am seeing multiple offers within in first week a nice home comes on market,” Isle of Palms Realtor, James Schiller. Nationally, the number of homes sold rose to a seasonally adjusted annual rate of 4.47 million. The numbers missed economists’ expectations of about 4.52 million home sales, according to Drew Matus, an economist at investment bank UBS. “Mortgage interest rates have been at record lows this year while rents have been rising at faster rates,” NAR Chief Economist Lawrence Yun said in a statement. “Combined, these factors are helping to unleash a pent-up demand. However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.” Independent economists are looking for the housing market to begin slowly reversing its more than 30% slide in prices, though most do not expect substantive price gains until at least 2013 or 2014. “It was a little below expectations but still good,” said Mike Zoller, an economist at Moody’s Analytics. He said the sharp gains in prices reflect the smaller percentage of foreclosure-related distress sales included in the numbers, as well as the shift to more higher-end home sales. Tight credit or worries about jobs may be prompting buyers to stay on the sidelines, said Patrick Newport, an economist at IHS Global Insight. The gain in home sales was the second-smallest reported this year, he added. As long as the buyer has good credit, money to put down, and good job security getting a loan is still easy by most standards. “These are not great numbers,” Newport said. “We have record-low mortgage rates. Something is going on.” The economists also disputed the Realtor association’s argument that sales might be stronger if more homes were available. Nationally, inventories of available homes work out to about six months’ worth of expected sales, Zoller said, a level he called “reasonable.” The proportion of homes that are vacant is still above 2%, Newport said, citing Census data. That’s higher than a historical norm of about 1.7%, he said. The bright side is that the overhang of foreclosures are finally seeing a decline, relieving an overflow that pushed prices lower, Barclays economist Michael Gapen wrote in a note to clients. About 24% of sales were foreclosure-related, down from 29% last July, he said. Most Content Courtesy of USA Today