The U.S. owner-occupied housing stock is aging rapidly especially after the Great Recession, as residential construction continues to fall behind in the number of new homes built. With a lack of sufficient supply of new construction, the aging housing stock signals a growing remodeling market, as old structures need to add new amenities or repair/replace old components.

Rising home prices also encourage home owners to spend more on home improvement. Over the long run, the aging of the housing stock implies that remodeling may grow faster than new construction.

Here's some good news, especially if you plan to buy with a mortgage insured by the Federal Housing Administration (FHA). Beginning March 20, Mortgage insurance premiums, MIP payments will be cheaper as the premium will be reduced from 0.85% to 0.55% of the loan amount. This is estimated to benefit up to 850,000 potential and current FHA borrowers.

Borrowers can save anywhere up to $1,500 per year, depending on their location and loan amount. Here are a few examples of FHA mortgages and reduced MIP payments.

* $300,000 mortgage will save $900 per year.

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®).

“The economy continues to show strength, and interest rates are repricing to account for the stronger than expected growth, tight labor market and the threat of sticky inflation,” said Sam Khater, Freddie Mac’s Chief Economist. "Our research shows that rate dispersion increases as mortgage rates trend up. This means homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate.”

Following an interest rate hike from the Federal Reserve and a surprisingly strong jobs report, mortgage rates increased slightly this week. The 30-year fixed-rate continues to hover close to six percent, and interested homebuyers are easing their way back to the market just in time for the spring home buying season.

Primary Mortgage Market Survey®
U.S. weekly averages as of 02/09/2023

30-Yr Fixed Rate Mortgage: 6.12% 1-Yr change 2.43%

15-Yr Fixed Rate Mortgage 5.25% 1-Yr change 2.32%

Source: Freddie Mac

The economy may not yet be in a recession, but the housing market is. U.S. home sales have declined for nine straight months. That’s the longest losing streak since the National Association of Realtors began tracking that data in 1999.

Aspiring home buyers saw signs of hope for greater affordability this week as the average 30-year mortgage rate dropped to 6.49%, Freddie Mac reports. Recent economic data suggests mortgage rates have peaked after surpassing 7% in the second week of November.

Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 1:

30-year fixed-rate mortgages: averaged 6.49%, dropping from last week’s 6.58% average. Last year at this time, 30-year rates averaged 3.11%.

More people are expanding their home search away from urban centers and toward smaller towns and rural areas, NAR data shows

House hunters have been expanding the scope of their home search over the past year, moving a median of 50 miles away from their previous property—a record distance, according to the National Association of REALTORS®’ 2022 Profile of Home Buyers and Sellers. The historical average is about 15 miles.

With the rate for a 30-year mortgage rising to 7.08% this week—the highest average since April 2002, according to Freddie Mac—the average monthly loan payment is now $1,000 more than a year ago, Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®, writes on the Economists’ Outlook blog.

Mortgage rates, now at a 20-year high, combined with inflation and stock market volatility are causing housing markets to soften quickly. The next several months will be a critical test for the economy, experts say.