Homebuyers are feeling pretty discouraged by the housing market these days, according to HousingWire. The latest Fannie Mae Home Purchase Sentiment Index shows that just 35% of consumers believe now is a good time to buy a home, down from 47% in April. And those who believe it is a bad time to be a homebuyer increased to 56% from 48%.
“Consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“However, despite the challenging buying conditions, consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment,” Duncan said.
Because the housing market feels very much like a zero-sum game at this point, sellers again felt good about their position. Just over two-thirds of those surveyed in June said it was a prime time to list a home and tempt the swarms of homebuyers, unchanged from the prior month.
Respondents also remained virtually unaltered on how much homes will actually cost. The percentage of respondents who say home prices will go up in the next 12 months decreased from 49% to 47%, while the percentage who say home prices will go down remained unchanged at 17%. The share who think home prices will stay the same increased from 27% to 29%.
What happens when you pay off your mortgage?
So, you’re ready to make your final mortgage payment. But what’s expected of you? And what’s next? You may need to do more than make your final mortgage payment to finalize your new free-and-clear ownership status. According to The McDowell News, here’s what’s involved in making your final mortgage payment:
- Request a payoff quote from your mortgage servicer.
Before you can make your final mortgage payment, you’ll need to ask your loan servicer for a payoff quote. You can often do this through the servicer’s website while logged into your home loan account. The payoff quote will say exactly how much principal and interest you need to pay to own your home free and clear.
- Make the final payment in the amount of the quote.
Follow any special instructions outlined by your servicer, such as paying via wire transfer. Your payoff quote will only be good through a certain date, so try not to miss the deadline.
- Receive documents verifying your loan repayment. The documents you receive may depend on your loan servicer. Here’s what you can expect:
- Canceled promissory note (“note”)
- Deed of trust or mortgage deed (“deed”)
- Certificate of satisfaction
- Final mortgage statement
- Loan payoff letter
- Make sure your payoff is recorded with your local government and get a copy of that record.
If you don’t have proof within about 90 days that the certificate of satisfaction has been recorded, you may need to contact your loan servicer and speak with the lien release department.
Your credit score is unlikely to change much after paying off your mortgage. Your payment history and amount owed have already been factored into your credit score for years. However, if you’re paying it off with a large lump sum (maybe you got an inheritance or life insurance settlement), the effect on your credit may be more noticeable. Your amounts owed, as shown on your credit report, will suddenly be much lower, and that metric is a big component of your credit score – accounting for about 30% of it. In that case, you might see a nice bump. But if you already have excellent credit, the effect may be negligible.
Homeowners got $2 trillion richer during the first 3 months of 2021
According to CNBC, homeowners are getting richer and richer as prices keep soaring – and the numbers are staggering.
Those with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400.
The massive gain is thanks to soaring home prices, which CoreLogic said were up over 11% in March, the end of the quarter, from a year earlier. That’s the sharpest gain since 2006. Prices rose an even stronger 13% in April.
High demand for homes spurred by the coronavirus pandemic amid an already low supply caused bidding wars in markets across the nation. Record-low mortgage rates for much of last year only added to the buying frenzy and helped fuel the price gains.
“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.”
Home values are expected to cool off in the coming months because buyers are already hitting an affordability wall. Sales have begun to slow, and price drops usually follow.
Home prices are not, however, expected to crash, since there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.
Weekly Mortgage Rate Update
The economy is recovering remarkably fast and as pandemic restrictions continue to lift, economic growth will remain strong over the coming months. Despite the stronger economy, the housing market is experiencing a slowdown in purchase application activity due to modestly higher mortgage rates. However, it has yet to translate into a weaker home price trajectory because the shortage of inventory continues to cause pricing to remain elevated.
The Freddie Mac weekly survey shows the average rate for a 30-year fixed mortgage is 2.96%, which is 0.03 points lower than last week, and down 0.25 points from this time last year.