The second quarter of 2020 closes out with a 3.4 percent average for the 30-year fixed rate mortgage with the forecasted rate remaining unchanged in the final two quarters of 2020. Even the out year forecasted average rate is only one tenth of a point above the current year. Overall, the report shows a rather stable mortgage rate moving forward. The forecast is considerably more conservation than past forecasts and should provide some stability to the recovering housing market. Don't lose sight that the forecasted average mortgage rate is still sitting in the historic low zone that bottomed out at 3.3 percent in November 2012.
Depending on market demand, the mortgage rates can support an increase in home values as mortgage rates remain relatively stable, and albeit low, with little deviation in the quarters ahead. The flip side of our historically low mortgage rates occurs when the real estate market becomes stagnant and buyers are not pressured by concerns over rising mortgage interest rates to make a purchase. The current market is experiencing some stagnation as social distancing has hampered open houses and showings; however, supply or available inventory can also cause changes to home prices. A significant drop or rise in inventory will cause a corresponding shift in value given the stable mortgage rates.
The Housing Inventory Snapshot for April 27, 2020, showed a 4.54 percent drop in average list price and a 1.23 percent drop in average sold price for single family homes; condominiums had a similar drop; while number of active listings for single family homes grew by 17 or 2.5 percent and condominiums grew by 21 or 1.47 percent. Given the relatively flat mortgage rate forecast, the percent values in the Housing Inventory Snapshot provide an indicator on the overall status of Honolulu's housing market without influence from typical mortgage rate fluctuation.
Register on www.ExitRealtyHonolulu.com to receive the Housing Inventory Snapshot to follow the market trends. The Housing Inventory Snapshot is also posted to our blog however in order to receive the monthly trends you must register on the website.
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So what do these rates mean if you are seeking a Veteran's Assistance or VA home loan? VA home loan is a home loan guaranty program offered to Veterans, military service members and eligible surviving spouses. The rates one actually qualifies is based on several factors including the loan program, credit score and credit worthiness. The forecast rates are only intended to provide you with insight into what the market considers as the overall average rate for the given period. You must check with your financial institution to find out what rate you qualify and in some cases that rate may be lower than what you see forecast by Mortgage Bankers Association.
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