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Mortgage rates were essentially unchanged on Tuesday. The average 30-year mortgage rate was lower, at 3.99%, which equates to a $476.84 monthly payment per $100,000 borrowed, or $28.35 higher than the equivalent payment would have been a month ago.
The average 15-year mortgage rate, on the other hand, was higher, at 3.18%, which equates to a $699.27 monthly payment per $100,000 borrowed, or $21.12 higher than the equivalent payment would have been a month ago.
|
Rate (National Average) |
Today |
1 Month Ago |
|---|---|---|
|
30-year fixed jumbo |
4.50% |
4.10% |
|
30-year fixed |
3.99% |
3.49% |
|
15-year fixed |
3.18% |
2.74% |
|
30-year fixed refi |
4.01% |
3.51% |
|
15-year fixed refi |
3.20% |
2.76% |
|
5/1 ARM |
3.38% |
2.9% |
|
5/1 ARM refi |
3.57% |
3.13% |
5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED 5-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.
First-time homebuyers: Here come the millennials
The conventional wisdom is that millennials have been excluded from the housing market, constrained between spiraling home prices -- particularly in desirable cities -- and stagnating incomes. Furthermore, that exclusion hurts the housing market more broadly, since it stalls the "upgrade cycle": A dearth of first-time buyers hurts first-time owners who are ready to trade up, and so on up the housing ladder.
As a Bloomberg Intelligence report noted today, for example [my emphasis]: "The perception that first-time buyers are unable to gain access to mortgage financing may be muting the potential for demand." The report goes on to rebut that perception, countering that mortgage lending standards have, in fact, become more accessible "through much of the current cycle."
Toll Brothers' (TOL -0.84%) fiscal fourth-quarter earnings report this morning suggests the upscale homebuilder, for one, has anticipated this genuine demand. In comments accompanying the release, CEO Doulas Yearly Jr. said that "[w]ith the millennial generation now entering their thirties and forming families, we are starting to benefit from the desire for home ownership from the affluent leading edge of this huge demographic wave."
Toll Brothers looks well positioned to take advantage of a rising trend; indeed, as the BI report announces with its title: Entry level to drive next leg of homebuilding growth. Considering the positive contribution of an improved housing market on the U.S. economy, that's a trend we can all root for to replace the conventional wisdom.
