Median home sale prices zoomed to an all-time high last year, helping home sellers net higher profits.
The average home price gain since
After weeks of moderating, mortgage rates moved up slightly this week. But aspiring home buyers may be able to breathe a sigh of relief: Freddie Mac economists revised their forecasts this week to predict 30-year fixed-rate mortgages to average below the 5 percent threshold for at least the next two years.
That will bode well for the housing market, which has become very rate sensitive. With mortgage rates slightly up this week, purchase applications for mortgages fell this week after soaring early this year, notes Sam Khater, Freddie Mac’s chief economist.
“However, softening house price appreciation along with increasing inventory of homes on the market—and historically low mortgage rates—should give a boost to the spring homebuying season,” Khater says.
The following are the national averages with mortgage rates for the week ending Jan. 31:
- 30-year fixed-rate mortgages: averaged 4.46 percent, with an average 0.5 point, rising from last week’s 4.45 percent average. Last year at this time, 30-year rates averaged 4.22 percent.
- 15-year fixed-rate mortgages: averaged 3.89 percent, with an average 0.4 point, increasing from last week’s 3.88 percent average. A year ago, 15-year rates averaged 3.68 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 3.96 percent, with an average 0.3 point, rising from last week’s 3.90 percent average. A year ago, the 5-year ARM averaged 3.53 percent.
Source: Freddie Mac
The U.S. median home price in 2018 was $248,000, up 5.5 percent from 2017 to a new record high.
“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts, reaped the most gains,” says Todd Teta, chief product officer at ATTOM Data Solutions. “However, those are the same areas where homeowners are staying put longer. The economy is still going strong and home loan rates remain historically low. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place.”
ATTOM researchers analyzed 217 metro areas with populations greater than 200,000 to find the highest returns on investment. The cities were predominantly located in the west.
The highest average returns on investment for home sellers last year were in San Jose, Calif. (108 percent); San Francisco (78.6 percent); Seattle (70.7 percent); Merced, Calif. (66.4 percent); and Santa Rosa, Calif. (66.1 percent).
Source: “Average U.S. Home Seller Profits at 12-Year High of $61,000 in 2018,” ATTOM Data Solutions (Jan. 29, 2019)
