Mortgage Rates Drop For Second Week in a Row

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ByMilja
April 23,2021

Mortgage rates fell for a second straight week amid broader signs of an economic recovery. The benchmark’s 30-year home-loan rate dropped to 3.04% last week, down nine basis points from the week before. These are the first declines in rates in over two months.

In recent years, mortgage rates have been at historically low levels. However, they were pushed higher by an increase in demand and a low supply of homes on the market. This trend was fuelled by the Covid-19 pandemic, which led to an increase in the number of people unwilling to sell properties in these unprecedented times. This situation caused the prices of the available properties to skyrocket, leading to bidding wars and people having to spend more than they originally planned.

Real estate agents have had their hands full with these bidding wars. However, finding new real estate leads is getting easier, and establishing a proper relationship with customers instead of blindly running around trying to make a sale is possible thanks to the number of new home listings, which is steadily going up.

“This won’t solve the inventory crunch overnight, but it’s a big step in the right direction, and one we’re likely to see more of in the weeks ahead as we approach the best time of the year to sell a home,” said chief economist at Realtor.com, Danielle Hale.

The drop in rates comes amid other economic improvements, including better jobless claims as well as better manufacturing and sales numbers. As the pace of vaccinations continues to accelerate, restrictions are being lifted, and many states are opening up. The economy is steadily getting back on track, with more Americans willing to return to their daily activities and increase their spending.

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The U.S. House of Representatives passed the Microloan Improvement Act to enhance access for small businesses to SBA loans and help them weather the economic fallout from the COVID-19 crisis. The act was passed by an overwhelming majority of 397 to 16.The bill was introduced by Congressmen Andy Kim and Tim Burchett and co-sponsored by two other lawmakers. It increases the number of nonprofit, community-based lenders that will get low-interest rate loans from the SBA and extend these in the form of lines of credit to small businesses with the maximum repayment term.Many small businesses don’t have the credit history to meet the extensive requirements for SBA loans. This act gives businesses that weren’t eligible for loans under SBA’s rules the opportunity to receive the much-needed funds.“We need to do everything we can to help our small businesses in this critical time,” Congressman Kim said. For his part, Burchett exclaimed that he was “proud to be a part of this effort that will help aspiring small business owners and entrepreneurs chase down the American Dream.”Congress established SBA’s Microloan Program back in 1991 to provide the funds to underserved entrepreneurs through community-based lenders. It’s now one of the best solutions to help small businesses avoid closures, along with crowdfunding platforms and other alternative routes that small businesses could take.Aside from the aforementioned bill, the House also passed the Microloan Transparency and Accountability Act, which is meant to deliver microloans to rural areas, offering a 5% technical assistance grant for institutions that work with small businesses. 25% of all loans must go to such companies for lenders to be eligible for this 5% grant. The SBA is also required to provide Congress with an annual Portfolio Risk Analysis of microloans to prevent fraud and government waste.
By Milja · April 23,2021
New York City investment manager, Gregory Blotnick, has been charged with embezzling more than $2.4 million from five different lenders through Payment Protection Program (PPP) loan applications.According to the Manhattan district attorney’s office, Blotnick was charged with multiple counts of second-degree grand larceny and second-degree criminal possession of stolen property, as well as one count of first-degree scheme to defraud.The 33-year-old is being accused of repeatedly taking advantage of a system that was designed to help small businesses during the economic fallout from the Covid-19 pandemic. Over 3,000 small businesses ended up closing their doors due to their inability to raise funds through traditional means.Blotnick applied for five different PPP loans between April 2020 and August that year, lying in his applications about the number of employees working at his two companies - Brattle Street Capital LLC and BSC Management LLC. According to his applications, money was meant to cover payroll costs, but instead, it ended up in his personal trading accounts. Blotnick ultimately lost the money in the market.He applied for the first loan in April at Cross River Bank, asking for $491,100 to be used as payroll for Brattle Street Capital LLC’s 25 employees. Blotnick wired half of the funds to one of his own Interactive Broker trading accounts. The other half was wired to an individual who used to be an investor at Blotnick’s investment firm. Blotnick submitted the next set of applications for loans in May at TransPecos and Northeast Bank. He used the money in the same way - around $250.000 from each loan was moved to his personal accounts.Blotnick continued the same pattern in June, applying for loans at the American Express National Bank for 45 employees and in August at Ponce Bank for 16 employees, ultimately pocketing over $2.4 million.
By Milja · April 23,2021
The downward direction mortgage rates are taking indicates this is the time to buy a home or start refinancing mortgages. The downward direction mortgage rates are taking indicates this is the time to buy a home or start refinancing mortgages. The average rate for the 30-year fixed-rate mortgage dropped to 3.231% last week, showing a 0.015% decline in a single day. This rate drop is the first since mid-March.  Mortgage rates already decreased in 2020, and many homeowners seized the opportunity to refinance existing loans or get new ones. Others have bought homes thanks to the more affordable rates. In January 2021, the rates reached a record low for a short time before they rose back in February. More companies are thinking of using real estate CRM software to battle these sudden changes. As for the near future, experts predict a continued rise in mortgage rates. The ascent will not be drastic, though, nor will it happen quickly. Different factors such as the Covid-19 situation and economic relief packages could affect the rates. They should remain low through the first half of the year, with a slight rise in the second half. Even with the expected rate increase, this is a good moment to buy a home or refinance loans. With the 30-year fixed mortgage rate decreasing, you would currently pay principal and interest approximately $434.00 for every $100,000 borrowed. Property management software might be of great help here as well. The average 15-year mortgage rate is also dropping, hitting 2.473% last week. The principal and interest should be $665 for every $100,000 borrowed. On the other hand, the average 5/1 ARM rate was 2.893% on April 15, showing an increase of 0.025% compared to the day before.  Joel Kan, associate vice president at MBA, said that the refinance activity has decreased for nine of the past ten weeks. Total mortgage application volume decreased 3.7% last week.
By Milja · April 21,2021

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