The 2015 Review: A Year of Stability and a Year of Change
December 8, 2015
In a way, 2015 was a Jekyll-and-Hyde year. While many aspects of real estate and mortgage were steady, others experienced several big changes. Except for the lack of movement in interest rates, the dividing line between stability and change seemed to fall squarely between the real estate industry and the mortgage industry.
National housing statistics show that it was a steady but good year in real estate. Through October, the national median existing-home price was up 5.1 percent over 2014, according to the National Association of Realtors®. The current figure—$216,600—represents the 44th consecutive month of year–over–year gains in prices and is 5.8 percent above last October’s median price. Likewise, existing-home sales continued to be strong and are currently 3.9 percent above last year’s pace during the same timeframe.
This is the 13th consecutive month in which existing-home sales have increased year-over-year. We also saw a steady pattern in interest rate levels. According to Freddie Mac, the interest rates on a 30-year fixed-rate mortgage had a low-water mark of 3.59 percent in early February and a high-water mark of 4.09 percent in mid-July—a tidy 0.5 percent difference between the high and the low. While housing statistics generally trended up throughout 2015, the interest rates remained fairly steady.
The year 2015 wasn’t all about staying the course, however. On the mortgage side of the equation, 2015 was a year of big changes within the industry. In late January, the FHA lowered the monthly mortgage insurance requirement by one half of one percentage point. For those borrowers who were eligible for an FHA loan, this meant huge savings on their monthly mortgage payments. Later in the year, the Federal Reserve made news when speculation arose that they would finally raise the federal funds rate, which directly affects the interest that banks charge and is closely tied to mortgage rates.
Although the Fed ultimately decided against raising the rates, they did leave the door open for a rate hike in early 2016. The biggest change in the mortgage industry came in October when the new TILA-RESPA Integrated Disclosure (TRID) rules went into effect. Not only were borrowers introduced to the new Loan Estimate and Closing Disclosure, but the entire loan application process was also completely revamped. These new loan disclosure rules are considered to be one of the biggest changes in the mortgage industry in 40 years.
So what will the new year bring? Will we see more stability or more change in 2016? Only time will tell.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988. Licensed by the Commissioner of Banks - License No. MB2671