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California wildfire victims could have up to 12 months of mortgage forbearance

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Fannie Mae and Freddie Mac issued reminders designed to keep homeowners and renters informed about forbearance options and other deferrals and modifications.

Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are aiming to remind homeowners and renters impacted by the ongoing wildfires in Los Angeles of various relief options. These include forbearance and other payment deferral plans, as well as disaster recovery counseling programs through the U.S. Department of Housing and Urban Development (HUD).

“The number one priority for those affected by the destruction of these ongoing wildfires is to reach safety,” Mike Reynolds, Freddie Mac’s single-family vice president and head of servicing, said in a statement. “Once out of harm’s way, we encourage homeowners in these affected areas to contact their mortgage servicer to learn about relief options. Freddie Mac and our partners stand ready to provide immediate assistance and aid in the recovery of families and individuals.”

Cyndi Danko, Fannie Mae’s senior vice president and chief credit officer of single-family, added that the company is continuing to monitor developments related to the wildfires and urges impacted homeowners to immediately contact their loan servicer.

“If homeowners have been impacted by the fires, we encourage them to call their mortgage servicer for assistance as soon as possible,” she said in a statement. “Homeowners and renters can learn more about disaster relief resources, including personalized support, by contacting Fannie Mae’s free disaster recovery counseling services.”

At Freddie Mac, disaster relief options are available to anyone with a Freddie-backed mortgage that has been impacted by a natural disaster. This includes anytime the relevant property has been hit with “an insurable loss,” and also covers when a home or “place of employment are located in Presidentially-Declared Major Disaster Areas with individual assistance designations,” according to the company.

“Foreclosure and other legal proceedings are also suspended while homeowners are on a forbearance plan,” Freddie Mac explained.

Fannie Mae also offered a reminder that it has a disaster recovery phone number, which is operated by Money Management International, as well as online resources for impacted borrowers. The phone number is 855-HERE2HELP (855-437-3243).

“Homeowners affected by a disaster are often eligible to reduce or suspend their mortgage payments for up to 12 months by entering a forbearance plan with their mortgage servicer,” Fannie said, echoing some of the information shared by Freddie. “During this temporary reduction or pause in payments, homeowners will not incur late fees and foreclosure and other legal proceedings are suspended.”

Once people are back on their feet, Freddie explains that there are multiple options available for the resumption of payments. These include reinstatement; a repayment plan; payment deferral where payment from a forbearance/relief period are added to the end of the mortgage term and a borrower becomes immediately current; or a loan modification for those borrowers with a long-term financial hardship.

HUD counseling through Fannie Mae can offer assistance for homeowners and renters including a needs assessment and recovery plan; assistance with requests from the Federal Emergency Management Agency (FEMA), insurance companies and others; online resources and guidance for 18 months; and support in multiple languages.

Read more at Housingwire

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As Featured in West + Main Home Magazine: Home Gym Goals

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W+M agent, Kate Kazell’s client, Melanie Phillips

“Fitness has been a huge part of my life for the past decade, and the way I’ve worked out has evolved. After moving across the country to Denver, my husband and I finally had the room to create our own home gym.”
— Melanie Phillips

For W+M agent, Kate Kazell’s client, Melanie Phillips, fitness has been more than just a passion- it’s a lifestyle. Known for her blog, @headstandsandheels, Melanie shares, “Fitness has been a huge part of my life for the past decade, and the way I’ve worked out has evolved. After moving across the country to Denver, my husband and I finally had the room to create our own home gym.”

The couple transformed an alcove in their finished basement into a stylish yet functional workout space. “We wanted the gym to be chic but also practical. We added brick wallpaper on the main wall, a large mirror, shelving for storage, fun neon lighting, and foam floor tiles.” The layout has four workout zones: floor exercises (yoga, Pilates), weightlifting, and two types of cardiowith a Peloton bike and treadmill.

The key to their home gym’s success is organization. “Once everything has a home, it makes the space functional for a variety of workouts.” Melanie advises starting with basics like dumbbells, a yoga mat, a mirror, and a bench, adding more equipment over time

With colder months ahead, the home gym becomes an even more essential part of Melanie’s routine. “We use our home gym most in winter. When it’s too cold to go outside, it’s great to have a space to work out at home.”

As someone who gets bored with the same routine, she keeps things interesting by alternating between online classes including, Sculpt Society, Form, and Peloton. The flexibility to switch between spin, strength training, and low-impact workouts has been especially important during her pregnancy.

Melanie's home gym reflects her fitness journey and lifestyle, offering the perfect space to sweat, stretch, and stay motivated.

 

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Time in the Market Beats Timing the Market

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Trying to decide whether it makes more sense to buy a home now or wait? There’s a lot to consider, from what’s happening in the market to your changing needs. But generally speaking, aiming to time the market isn’t a good strategy – there are too many factors at play for that to even be possible.

That’s why experts usually say time in the market is better than timing the market.

In other words, if you want to buy a home and you’re able to make the numbers work, doing it sooner rather than later is usually worth it. Bankrate explains why: 

“No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately.” 

Here’s some data to break this down so you can really see the benefit of buying now versus later – if you’re able to. Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2029 – just at a slower, more normal pace than they did over the past few years (see the graph below):

 
 

But what does that really mean for you? To give these numbers context, the graph below uses a typical home value to show how it could appreciate over the next few years using those HPES projections (see graph below). This is what you could start to earn in equity if you buy a home in early 2025. 

 
 

In this example, let’s say you go ahead and buy a $400,000 home this January. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. That’s not a small number. If you keep on renting, you’re losing out on this equity gain.

And while today’s market has its fair share of challenges, this is why buying is going to be worth it in the long run. If you want to buy a home, don’t give up. There are creative ways we can make your purchase possible. From looking at more affordable areas, to considering condos or townhomes, or even checking out down payment assistance programs, there are options to help you make it happen.

So sure, you could wait. But if you’re just waiting it out to perfectly time the market, this is what you’re missing out on. And that decision is up to you.

Bottom Line

If you’re torn between buying now or waiting, don’t forget that it’s time in the market, not timing the market that truly matters. Connect with an agent if you want to talk about what you need to do to get the process started today.

Read more at Keeping Current Matters

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Mortgage rates above 7% are clouding the housing market outlook

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December jobs data is expected to cool, but how will Fed officials respond at their next meeting?

The new year has arrived, but little has changed regarding the direction of mortgage rates and their impact on the U.S. housing market.

At HousingWire’s Mortgage Rates Center on Tuesday, the 30-year fixed rate averaged 7.09%. That was up 2 basis points (bps) from a week ago. The 15-year fixed rate was slightly higher at 7.11% and was up 11 bps in the past week.

“The 10-year yield is currently close to my peak forecast of 4.70%. However, mortgage rates have not reached my peak prediction of 7.25% because mortgage spreads have improved in the early part of the year,” HousingWire Lead Analyst Logan Mohtashami wrote. “If mortgage spreads had been as unfavorable as they were in 2023, mortgage rates would be around 8% instead of near 7%.”

Mortgage rates have continued to rise since the Federal Reserve meeting on Dec. 18, when the central bank cut benchmark rates by 25 bps to a range of 4.25% to 4.5%. The Fed has implemented a total of 100 bps in cuts over its past three meetings, but mortgage rates have not moved in tandem. The 30-year fixed rate, for instance, has jumped by 78 bps since the rate-cutting cycle began in mid-September.

Market observers believe that the cuts will be paused when the Fed meets again at the end of January. On Tuesday, the CME Group’s FedWatch tool showed that 95% of interest rate traders predict no cut this month. Looking ahead to March, 37% of traders believe there will be an additional 25-bps cut that would lower the federal funds rate to a range of 4% to 4.25%.

The next employment report from the U.S. Bureau of Labor Statistics (BLS) will be released Friday and should provide some direction to Fed policymakers before their next meeting. A Reuters poll of economists calls for 150,000 new jobs to be added in December, down from a figure of 227,000 in November.

Last week, the labor department reported a seasonally adjusted annual rate of 211,000 unemployment claims — a lower-than-expected figure which signaled that “the labor market isn’t breaking,” according to Mohtashami.

“For mortgage rates to go lower, we need to focus on the labor market, which has been critical to every economic cycle in recent history, and particularly the labor market for residential construction and remodeling,” Mohtashami wrote.

“The existing home sales market has been in a recession since June 16, 2022, and hasn’t experienced any significant growth in sales for some time. However, the labor market for those working in in the existing home sales market isn’t substantial enough to impact an economy, since it is a sector that revolves around a transfer of commission.”

There weren’t any surprises in regard to home sales or new listings during the typically slow holiday season, according to Altos Research President Mike Simonsen. Altos data showed a weekly average of 44,000 new pending sales in December, nearly unchanged from the same period last year. Simonsen said he expects activity to rise next week.

“In ‘normal’ years, it’d be early February before inventory hits the absolute low point and starts climbing for the spring,” Simonsen wrote Monday. “When demand was hot during the pandemic, inventory might not reach its low point until March or April. In those times, we just had far more buyers than sellers. That’s not true now, so we should expect inventory to begin building for the year in February 2025.”

Mortgage and real estate professionals may take solace in the fact that homebuyer sentiment is considerably higher than it was a year ago. Survey data released Tuesday by Fannie Mae also showed that 42% of respondents expect mortgage rates to decline in the next 12 months, up from 31% one year ago.

“While respondents remain discouraged by the pandemic-era run-up in home prices and mortgage rates, the upward trend in home buying sentiment in 2024 may reflect a slow acclimatization to the generally less-affordable market conditions,” Fannie Mae chief economist Mark Palim remarked.

Redfin data released this week showed some positive signs for housing affordability. The brokerage reported that the share of income needed to buy the median-priced home fell slightly last year — the first time since the start of the COVID-19 pandemic that had happened. Still, a household earning the median income of $83,782 would need to spend nearly 42% of their paycheck to afford the median-priced home of $429,734, much higher than the typical share of 30% or less during the 2010s.

“For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon,” Redfin senior economist Elijah de la Campa said. “Even with inventory trending upwards, we still expect prices to continue rising in 2025 due to a lack of homes for sale — pushing more would-be homebuyers to rent instead.”

Read more at Housingwire

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America’s frozen housing market is finally starting to thaw

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After nearly three years of grappling with an expensive housing market, home buyers are showing signs of getting used to it.

Though the data is still preliminary, it points to an emerging trend in which house hunters are adjusting to higher mortgage rates. Home transactions are broadly up over the past few months, and consumer sentiment toward buying a house is warming up.

“Home-sales momentum is building,” Lawrence Yun, the chief economist at the National Association of Realtors, a trade group, said recently. Consumers have grown accustomed “to a new normal of mortgage rates between 6% and 7%,” he added.

Even if homeowners with ultra-low mortgage rates remain reluctant to move — a phenomenon known as the lock-in effect — that dynamic may be easing among those with relatively higher rates, Andy Walden, vice president of research and analytics at Intercontinental Exchange told MarketWatch.

And that gradual shift in home-buying attitude is giving the housing industry some hope for 2025.

“This is the first year in three years where I’m like, ‘It’s probably going to be better than the year before,’” Leo Pareja, chief executive of eXp Realty, told MarketWatch. 

But for people trying to buy a house this year, the future may feel less rosy.

Early indications of a thawing housing market

The two major pieces of data that suggest consumers are begrudgingly accepting a new, more expensive housing market are the recent increase in home sales and the uptick in housing sentiment.

In October and November, the latest months for which data was available, home sales increased, according to the NAR.

That trend was broad-based: The number of homes sold across most of the nation grew between October and November as buyers snapped up properties during a brief period of time when the 30-year mortgage rate fell close to 6%. 

The median price of a home sold over that period was $406,100, which was up nearly 5% from the same month a year ago.

Additional data suggested that more buyers were on their way. Pending home sales, which refer to contracts signed a month or two before a home is sold, also rose in November in most regions.

At that point, Yun said, “consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory.”

Meanwhile, in a recent survey of consumers by the housing-finance giant Fannie Mae, consumer sentiment ticked up over the course of 2024, even though people were “discouraged” by soaring home prices and mortgage rates over the past few years, said Mark Palim, the company’s chief economist. 

That “may reflect a slow acclimatization to the generally less-affordable market conditions,” Palim said. 

Part of the optimism, however, was driven by an expectation that rates would fall over the next 12 months. And the data did not indicate a sea change in terms of attitudes toward buying a home: Only 22% of consumers said it was a good time to buy.

The math on buying a $400,000 home

Getting a foot on the homeownership ladder remains a daunting prospect for most Americans. Case in point: the salary required to afford a home that costs $400,000, considered to be the typical home price. 

To afford that, home buyers would need to earn a six-figure salary, according to calculations by Lisa Sturtevant, the chief economist at Bright MLS, a real-estate-listings service. 

The 30-year mortgage rate averaged 6.91% in the week of Jan. 2, according to Freddie Mac data. Assuming a 10% down payment, the monthly payment — which includes principal, interest, property taxes and insurance — for a $400,000 home would be about $2,900. In other words, a buyer would need to make almost $125,000 to qualify for a mortgage, Sturtevant said. 

The median U.S. household income, adjusted for inflation, is around $80,000, according to Census data .

Not a full recovery — yet 

To be sure, prospective home buyers are still looking at a frosty housing market, due to the yawning gap between the cost of buying a home and incomes.

Rates are still high enough to spook buyers who don’t have a pressing need to buy a home, and high home prices deter those who want to upgrade or downgrade but don’t want to give up their ultra-low rate for a higher one.

Most homeowners have a rate that’s lower than the current 7%. Only about two in 10 borrowers had a mortgage rate of 6% or more in the third quarter of last year, according to the most recent data available from the Federal Housing Finance Agency. 

The prevalence of low rates among people who already own homes is leading some real-estate pros to remain skeptical about whether the housing market has turned a corner. They expect homeowners to stay put for longer, while buyers struggle to find homes to buy.

“It’s like when you were a kid at a dance, and the boys are on one side and the girls are on the other, and nobody wants to make the first move,” Bess Freedman, chief executive of Brown Harris Stevens, a real-estate brokerage in New York City, told MarketWatch.

“We have been at a standstill,” she added, “and that is unhelpful.” 

So “we need to get more people on the dance floor. I want 2025 to come alive and get people out there in the market,” Freedman said.

Some also believe that the industry is overly optimistic about a turnaround in buyers’ attitudes toward rates. “I don’t know that there has been a broad acceptance of mortgage rates being at these levels,” Greg McBride, the chief financial analyst at Bankrate, told MarketWatch. 

“There are still a lot of prospective buyers that are pinning their homes on a return of 4% or 5% mortgage rates,” he added. “I just don’t think that’s what 2025 is going to deliver.”

Read more at MarketWatch

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