Latest news with #housingMarket
Yahoo
3 hours ago
- Business
- Yahoo
Will Trump launch a new first-time home buyer tax credit?
: We are monitoring government moves regarding the first-time home buyer tax credit and will update this page as necessary. Now that the presidential election has been decided, speculation is bubbling up about a possible revival of the first-time home buyer tax credit. While Kamala Harris had promised to offer $25,000 in down payment assistance to prospective home buyers to recharge the housing market, Donald Trump remained mum on the campaign trail regarding any similar incentive. However, there were hints provided about potential plans in Republican campaign documents. With the Federal Reserve rate and mortgage rates holding firm, the housing market is wound tight with stifled demand. Will the new Trump administration find a way to relieve the pressure? This embedded content is not available in your region. The Republican 2024 platform stated that tax incentives and other support for first-time home buyers — as well as opening portions of Federal Lands to new construction while reducing regulations — would boost home construction and ownership. The Republican roadmap also said that "slashing inflation" would reduce mortgage rates. Donald Trump has also expressed an interest in steering the Fed's monetary policy in an effort to lower mortgage rates. The goal: to get home loan rates back down to 3%, "maybe even lower than that," Trump has said. The original first-time home buyer tax credit was created by Congress in 2008 and ended in 2010, though service members and some federal employees had an extra year's eligibility for the tax credit. Providing a tax rebate on income taxes owed, it allowed a credit of up to 10% of the home purchase price on a principal residence to a maximum of $8,000. The IRS defined a first-time home buyer as someone who had not owned a house in the three years before the purchase of the home the tax filer was seeking the tax credit on. With a federal tax break currently nonexistent, first-time home buyers can explore possible mortgage credit certificates in their state. MCCs are issued by state housing finance agencies and allow home buyers to take a portion of the mortgage interest they pay annually as a federal tax credit, up to a $2,000 limit. The tax credit can range from 10% to 50% of the mortgage interest paid annually on a primary residence. MCCs are subject to income limits and other restrictions set by a state housing finance agency and primarily serve low- to moderate-income households. Once approved, the home buyer receives a credit certificate applied to federal income tax owed on their tax return. Find information on the housing finance agency in your state. Some cities, counties, and states also provide down payment assistance programs, reduced interest rates and grants to qualified first-time home buyers. State housing finance agencies and the Department of Housing and Urban Development can help you find these home-buying assistance programs. You can also search your local municipality's website for mortgage programs where you live. Income limits, location, credit score requirements, and other restrictions may apply to these grants, loans or down payment assistance programs. First-time home buyers are often eligible for loan programs tailored to their needs. One of the most important benefits includes lower down payments: Conventional loans offer down payments as low as 3%. FHA loans offer down payments as low as 3.5% for credit scores as low as 580. VA loans and USDA mortgages offer no-down-payment programs. VA loans are for military personnel and their families, while USDA loans are for low-to-moderate-income borrowers in rural areas. The best mortgage lenders for first-time buyers will also help you find loan and assistance programs that you may qualify for. While it is of no help in clearing the hurdle to homeownership, once you are settled in, you can look forward to long-held tax breaks still in effect. The tax benefits include deductions on discount points and origination fees paid during the loan process, as well as a mortgage interest deduction and a tax deduction on the property taxes you pay as a homeowner. There are also tax incentives for energy-efficiency home improvements and more.
CNET
6 hours ago
- Business
- CNET
Mortgage Rates Dip Down: Mortgage Rates on June 20, 2025
Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. Average 30-year fixed mortgage rates have remained close to 7% for the last seven months, keeping prospective homebuyers on the sidelines. For a 30-year fixed-rate mortgage, the average rate you'll pay is 6.82% today, down -0.05% from seven days ago. The average rate for a 15-year fixed mortgage is 6.00%, which is a decrease of -0.04% compared to a week ago. Lingering inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and left interest rates unchanged this year, most recently on June 18. If President Trump rolls back some of his aggressive tariff measures or if the labor market deteriorates, it could prompt the Fed to cut interest rates as early as this fall. But prospective homebuyers shouldn't expect mortgage rates to become affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. Plus, in today's unaffordable housing market, mortgage rates are just one piece of the puzzle. High home prices and skyrocketing homeownership expenses, like insurance and property taxes, are further compounding the pressure on prospective buyers. The possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. What's going on with mortgage rates right now? Mortgage rates are closely tied to the bond market, specifically the 10-year Treasury yield, which reflects investors' expectations for inflation, labor data, changes to monetary policy and global measures like tariffs. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to reduce borrowing rates, experts caution that significant market volatility is likely. As a result, homebuyers are adopting a more patient and strategic approach to financing, comparing various loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. What is the outlook for mortgage rates in 2025? Despite hopes that 2025 would bring relief to the housing market, economic and political instability have kept it stuck in neutral. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Meanwhile, the "lock-in" effect, where current homeowners with low-rate mortgages are reluctant to sell and take on higher interest rates, has kept housing inventory tight and fueled price competition in high-demand areas. According to Smith, mortgage rates could move lower slowly and steadily, but numerous risks could also keep rates elevated. Fannie Mae now expects rates around 6.1% by the end of 2025 and 5.8% by the end of 2026. How can I choose a mortgage term? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The average interest rate for a standard 30-year fixed mortgage is 6.82% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 6.00%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 ARM has an average rate of 6.15% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. How can I find the best mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
CTV News
12 hours ago
- Business
- CTV News
ADVERTISEMENT Video Hot Property for Thursday, June 19, 2025 The panel discuss newly released reports that indicate an increase in national home sales and a flattening of housing starts.
Video The panel discuss newly released reports that indicate an increase in national home sales and a flattening of housing starts.
CNET
a day ago
- Business
- CNET
Homebuyers See Lower Mortgage Rates: Current Mortgage Rates for June 19, 2025
Check out CNET Money's weekly mortgage rate forecast for a more in-depth look at what's next for Fed rate cuts, labor data and inflation. Average 30-year fixed mortgage rates have remained close to 7% for the last seven months, keeping prospective homebuyers on the sidelines. For a 30-year fixed-rate mortgage, the average rate you'll pay is 6.87% today, down -0.04% from seven days ago. The average rate for a 15-year fixed mortgage is 6.06%, which is a decrease of -0.05% since last week. Lingering inflation, threats of a global trade war and policy turbulence have created an uncertain economic outlook. In response, the Federal Reserve has adopted a wait-and-see approach and kept interest rates steady in 2025, most recently on June 18. If President Trump eases some of his aggressive tariff measures or if the labor market deteriorates, it could prompt the Fed to cut interest rates as soon as September. But prospective homebuyers shouldn't expect mortgage rates to become affordable overnight. While cheaper borrowing costs gradually trickle down to the housing market, the Fed doesn't directly set lenders' mortgage rates. Plus, in today's unaffordable housing market, mortgage rates are just one piece of the puzzle. Prospective buyers still have to contend with high home prices and skyrocketing homeownership expenses. The "="" target="_self">possibility of a job-loss recession is also pushing many households to tighten their budgets and take on less financial risk. When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET's partner lenders. About these rates: Bankrate's tool features rates from partner lenders that you can use when comparing multiple mortgage rates. Are mortgage rates considered high right now? Mortgage rates primarily take their cues from the 10-year Treasury yield, which reflects investors' collective expectations regarding inflation, labor market health, upcoming monetary policy shifts and the impact of global factors like tariffs. If investors anticipate persistently high inflation or significant government borrowing, they'll demand higher returns on their bonds, which in turn keeps mortgage rates elevated. "Rates could fall if inflation keeps cooling and the labor market softens," said Jeb Smith, licensed real estate agent and member of CNET Money's expert review board. "On the other hand, tariffs could create new inflation pressure. Add in government deficits and increased bond supply, and that puts upward pressure on rates." Even as the Fed eventually starts to lower interest rates, experts warn of a lot more volatility in the market. As a result, homebuyers are being more patient and strategic about financing, comparing different loan types and planning ahead. "Some are waiting, others are getting pre-approved now so they're ready to act if rates fall," said Smith. For a look at mortgage rate movement in recent years, see the chart below. Mortgage predictions for 2025 Despite hopes that 2025 would bring relief to the housing market, economic and political instability have kept it stuck in neutral. Median family income has not kept pace with the surge in housing costs, requiring many households to earn double or triple their salary to afford a modest home in some cities. Meanwhile, the "lock-in" effect, where current homeowners with low-rate mortgages are reluctant to sell and take on higher interest rates, has kept housing inventory tight and fueled price competition in high-demand areas. According to Smith, home loan rates could decline slowly and steadily, but numerous risks could also keep rates elevated. Fannie Mae now expects rates around 6.1% by the end of 2025 and 5.8% by the end of 2026. What is a good mortgage type and term? Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront. 30-year fixed-rate mortgages The 30-year fixed-mortgage rate average is 6.87% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you'll have a lower monthly payment. 15-year fixed-rate mortgages Today, the average rate for a 15-year, fixed mortgage is 6.06%. Though you'll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner. 5/1 adjustable-rate mortgages A 5/1 ARM has an average rate of 6.08% today. You'll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option. Calculate your monthly mortgage payment Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET's mortgage calculator below can help homebuyers prepare for monthly mortgage payments. How can I find the best mortgage rates? Though mortgage rates and home prices are high, the housing market won't be unaffordable forever. It's always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right. Save for a bigger down payment: Though a 20% down payment isn't required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.
Yahoo
2 days ago
- Business
- Yahoo
When will mortgage rates go down? Predictions as the Fed rate holds steady.
Pleas for lower mortgage rates could be the battle cry of the decade among aspiring homeowners and those looking to refinance, and for good reason. According to Freddie Mac, mortgage interest rates are down for the third week in a row — but just barely. Current interest rates for a 30-year fixed-rate mortgage are 6.81%, a decrease of three basis points since last week. The average rate for a 15-year fixed-rate mortgage is down just one basis point to 5.96%. The declines are small, but three weeks of drops could leave potential home buyers wondering, 'Is this a good time to buy a house?' If you're waiting for rates to drop significantly before buying a home, don't hold your breath. Current financial and housing market data indicate little interest rate relief in the coming months. If you want to buy, you need a strong financial footing, a decent-sized down payment, and a focus on lower fees to partly compensate for the higher initial mortgage rate. And remember, you can always refinance your mortgage later. Learn more: How to buy a house in 13 steps This embedded content is not available in your region. In this article: Are mortgage rates dropping? So, will mortgage rates go down at all this year? Should you wait to buy until mortgage rates go down? Strategies for buyers in today's mortgage market FAQs As of June 18 this year, Freddie Mac reported that rates for 30-year fixed-rate mortgages had stayed below 7% for 22 consecutive weeks. This time last year, mortgage rates were averaging 6.87% — just a little higher than now. Considering rates are still not far below 7%, we get it if you feel like you can't catch a break in the current economy. In situations like these, it pays to look at the numbers. Here's the Freddie Mac data on mortgage rates for the past 52 weeks as of June 18, 2025: 30-year fixed-rate mortgage: 6.08% to 7.04% 15-year fixed-rate mortgage: 5.15% to 6.27% If you just go by the numbers, rates on both 30-year and 15-year fixed-rate mortgages remain mostly below the highs noted above. So, yes, mortgage rates have decreased incrementally over the past year. Will they keep dipping? That remains to be seen. If you're looking for a substantial interest rate drop in 2025, you'll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today. When the Fed — the common nickname for the Federal Open Market Committee (FOMC) — held its June 2025 meeting, it voted to keep the federal funds rate the same for the time being. After cutting its rate three times at the end of 2024, it has yet to slash the rate in 2025. However, the central bank is still predicting two rate cuts this year.. That federal funds rate tends to directly influence rates on shorter-term lending. While mortgage rates aren't directly based on the fed funds rate, they typically mirror fed fund rate trends. So, if the fed funds rate goes up, mortgage rates will likely follow. The inverse is also true. The next Fed meeting is set for next week, July 29 and 30. Learn more: How the Fed rate decision impacts mortgage rates While short-term lending rates closely follow the fed funds rate, mortgage rates more closely follow the 10-year Treasury yield. As of June 16, the 10-year Treasury yield sat at 4.46% — up from 4.20% a year prior. You're probably wondering why today's mortgage rates aren't in the 4% range, right? To determine current mortgage rates, lenders add a 'spread' to the 10-year Treasury yield. The spread is simply the difference between the rates consumers pay and the rate on the 10-year Treasury. Without getting too much into the weeds, charging a spread helps mortgage lenders cover costs associated with making loans to the public and the risk of providing such loans. Now, let's go back to mortgage rates. This week last year, the average 30-year fixed mortgage rate was 6.87%, and the 10-year Treasury yield was 4.20% — a spread of 2.67%. Today, the average 30-year fixed mortgage rate is 6.81%, and the 10-year Treasury yield is 4.46% — a spread of 2.35%. The spread was wider in June 2024 than now, and mortgage rates were a bit higher then. Read more: When will mortgage rates finally go back down to 5%? In short, no. You probably shouldn't wait to buy a home until mortgage rates drop. Mortgage rates are just one part of the affordability equation. You also have to consider home prices, a factor of housing supply and demand. The current housing market is in a crunch. To put it simply, buyers outnumber homes for sale, especially homes in price ranges accessible to the first-time home buyer. When supply and demand are out of balance like this, home prices tend to remain high since sellers know they'll have multiple buyers interested. According to data from the Federal Reserve Bank of St. Louis, the median sale price of single-family homes has generally trended upward since Q1 of 2009. At that time, the median sale price was $208,400. The median price had risen to $416,900 by Q1 2025. While recession chatter has recently increased — especially after the first negative gross domestic product (GDP) in three years — prospective buyers likely won't see much relief in a true recession. If interest rates drop like they tend to do in recessions, that will increase the number of people looking to buy and lock in a lower interest rate. That drives up demand for the already limited supply of homes. To truly save, buyers need both interest rates and home prices to drop, which is unlikely. Keep reading: Do mortgage rates go down in a recession? This embedded content is not available in your region. If you crave the comforts of homeownership, the best strategy in today's market may be to buy what you can afford. Whether that means a smaller house or a condo instead of a single-family home, owning something puts you in a position to start building equity. Yes, shopping for the best mortgage lenders with low rates and fees is crucial when getting a mortgage. But to help you find your ideal home that balances affordability and desirability, it pays to adopt a curious mindset and consider lesser-discussed financial tools. There's no better time to learn more about your local real estate market than today. By adopting a sense of curiosity, you could discover that your city has more to offer housing-wise than you previously thought. You may want to take weekend excursions to lesser-known neighborhoods and suburban developments beyond the city limits. You never know what you'll find that could expand your idea of what 'home' looks like — including new developments, school districts, and types of homes. If you're looking to spend less on a home in today's mortgage market, a house needing a bit of TLC could help you do just that. Loans like the FHA 203(k) mortgage can roll your purchase and renovation costs into one convenient loan. When you qualify and have an accepted offer, your lender immediately funds the home's purchase price and puts the cost of renovations into an escrow account. As you make repairs, funds get dispersed. How would it feel to have a longer commute yet come home to a house you love? Master-planned communities tend to crop up outside major cities, offering amenities like parks, shopping, and top-notch schools — all in exchange for a longer commute. These areas could look a lot more palatable if they offer commuting options like park-and-ride or commuter rail. Dare to consider parking the car and taking public transit if it could get you into the home of your dreams. While shared walls, floors, and ceilings might not immediately scream 'dream home,' they could help you find an affordable home in a terrific area. Condominiums come in various shapes and sizes, from apartment-style flats to townhomes. Depending on the area, you might even score a small backyard. However, be sure to consider HOA fees when calculating your monthly payment. While the monthly payment on a 15-year mortgage will be higher than the typical 30-year, these loans have plenty of upsides. Not only will you pay off your home on a speedier timeline, but you'll also likely score a lower interest rate and save a ton on interest over the life of your loan. To make today's mortgage rates more palatable, look into rate buydown options. An interest rate buydown lets you pay cash up front in exchange for a reduced interest rate on your mortgage. Buydowns can be permanent or temporary (for your loan's first one to three years, for example). Even a few years of lower rate relief can make today's home prices more affordable. Economists expect mortgage rates to hold steady for the remainder of this year. According to Freddie Mac data, the interest rate on a 30-year fixed-rate mortgage has ranged from 6.08% to 7.04% so far in 2025. Compared to historical mortgage rates, 7% isn't considered a high rate. While it might be high compared to pandemic-era rates that were sub-3%, it's on par with mortgage rates in the 1990s, and considerably lower than the double-digit rates seen in the late 1970s and early 1980s. It's not impossible to get a 3% interest rate, but doing so requires the perfect set of circumstances. You'd need to find a homeowner with an assumable mortgage — one that can be passed to a new owner at the same interest rate as the original loan. Assumable mortgages are generally government-backed loans from agencies like the VA, FHA, or USDA. Laura Grace Tarpley edited this article.
