Home Ownership Rate Hits 20 Year Low Despite Low Mortgage Rates

U.S. homeownership rate has just hit a 20 year low despite near record low current mortgage rates. The U.S. Department of Commerce reported the homeownership rate fell to 64.3 percent in the 4th quarter of 2014. This is the lowest level since the 3rd quarter of 1994.

The all-time high rate for homeownership was during the housing bubble when ownership hit a high of 69.4 percent in 2004. Although homeownership recently hit a 20 year low, the outlook for housing in the future is positive. A stronger economy, lower unemployment, and other contributing factors will increase the ownership rate in the coming years.

A significant change that will promote homeownership is downpayment requirements by Freddie Mac and Fannie Mae. Starting last week, first time homebuyers can put down as little as 3 percent whereas the prior minimum was 5 percent.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #2473786

4.934%

15-Year Fixed

4.750%

$4,887

Includes 0.948 points for $3,792

Lender Fees: $1,095

$3,112 /mo

Next >

NMLS #1835285

5.026%

15-Year Fixed

4.875%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$3,138 /mo

Next >

NMLS #613839

5.192%

15-Year Fixed

4.990%

$5,351

Includes 0.866 points for $3,464

Lender Fees: $1,887

$3,162 /mo

Next >

NMLS #757416

5.226%

15-Year Fixed

5.125%

$2,652

Includes 0.663 points for $2,652

Lender Fees: $0

$3,190 /mo

Next >

NMLS #1067

5.241%

15-Year Fixed

5.125%

$3,044

Includes 0.761 points for $3,044

Lender Fees: $0

$3,190 /mo

Next >

NMLS #1312186

5.277%

15-Year Fixed

5.125%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$3,190 /mo

Next >

NMLS #1954591

License: 60DBO-113383

5.305%

15-Year Fixed

5.125%

$4,791

Includes 0.921 points for $3,684

Lender Fees: $1,107

$3,190 /mo

Next >

NMLS #2433973

5.309%

15-Year Fixed

5.125%

$4,965

Includes 0.750 points for $3,000

Lender Fees: $1,965

$3,190 /mo

Next >

NMLS #2473786

5.354%

5-Year ARM

5.250%

$4,671

Includes 0.894 points for $3,576

Lender Fees: $1,095

$2,209 /mo

Next >

NMLS #6606

5.398%

15-Year Fixed

5.250%

$3,880

Includes 0.970 points for $3,880

Lender Fees: $0

$3,216 /mo

Next >

NMLS #1835285

5.459%

5-Year ARM

5.375%

$3,767

Includes 0.817 points for $3,268

Lender Fees: $499

$2,240 /mo

Next >

NMLS #1025894

5.535%

15-Year Fixed

5.375%

$4,176

Includes 0.869 points for $3,476

Lender Fees: $700

$3,242 /mo

Next >

NMLS #2561451

5.840%

30-Year Fixed

5.750%

$3,926

Includes 0.794 points for $3,176

Lender Fees: $750

$2,335 /mo

Next >

NMLS #1835285

5.842%

30-Year Fixed

5.750%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$2,335 /mo

Next >

NMLS #2473786

5.858%

30-Year Fixed

5.750%

$4,731

Includes 0.909 points for $3,636

Lender Fees: $1,095

$2,335 /mo

Next >

NMLS #1067

5.931%

30-Year Fixed

5.875%

$2,420

Includes 0.605 points for $2,420

Lender Fees: $0

$2,367 /mo

Next >

NMLS #757416

5.949%

30-Year Fixed

5.875%

$3,220

Includes 0.805 points for $3,220

Lender Fees: $0

$2,367 /mo

Next >

NMLS #1312186

5.955%

5-Year ARM

5.875%

$3,480

Includes 0.870 points for $3,480

Lender Fees: $0

$2,367 /mo

Next >

NMLS #613839

6.009%

30-Year Fixed

5.875%

$5,827

Includes 0.985 points for $3,940

Lender Fees: $1,887

$2,367 /mo

Next >

NMLS #2433973

6.010%

30-Year Fixed

5.875%

$5,965

Includes 1.000 points for $4,000

Lender Fees: $1,965

$2,367 /mo

Next >

NMLS #1312186

6.070%

30-Year Fixed

6.000%

$3,000

Includes 0.750 points for $3,000

Lender Fees: $0

$2,399 /mo

Next >

NMLS #1954591

License: 60DBO-113383

6.096%

30-Year Fixed

5.990%

$4,631

Includes 0.881 points for $3,524

Lender Fees: $1,107

$2,396 /mo

Next >

NMLS #1954591

License: 60DBO-113383

6.097%

5-Year ARM

5.990%

$4,663

Includes 0.889 points for $3,556

Lender Fees: $1,107

$2,396 /mo

Next >

NMLS #399799

6.099%

30-Year Fixed

6.000%

$4,396

Includes 0.767 points for $3,068

Lender Fees: $1,328

$2,399 /mo

Next >

NMLS #1025894

6.099%

30-Year Fixed

5.990%

$4,700

Includes 1.000 points for $4,000

Lender Fees: $700

$2,396 /mo

Next >

NMLS #2433973

6.260%

5-Year ARM

6.125%

$5,901

Includes 0.984 points for $3,936

Lender Fees: $1,965

$2,431 /mo

Next >

NMLS #6606

6.328%

30-Year Fixed

6.240%

$3,732

Includes 0.933 points for $3,732

Lender Fees: $0

$2,461 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

Other changes include the FHA lowering insurance premiums by 0.05 percent, which will save 2 million homeowners $900 a year. This change is also expected to entice 250,000 new homebuyers to purchase their first home within the next three years.

Freddie Mac also announced their Home Possible Mortgages, which are designed to help low and moderate income borrowers. These borrowers will have more options for low down payment mortgages. All of these changes are designed to help the housing market recover from the worst bust since the Great Depression.

Mortgage rates are expected to increase in 2015 but will still be low, historically speaking. Current 30 year mortgage rates are averaging 3.80 percent, a decline from last week's average 30 year rate of 3.85 percent. By the end of 2015, average 30 year rates are expected to be near 5.00 percent, which is still low considering the double digit rates we saw in the 1970s and early 1980s.

Mortgage rates today on 15 year conforming loans are averaging 2.98 percent, a slight increase from the prior week's average of 2.97 percent. By the end of 2015, average 15 year rates are expected to rise to 4.00 percent, which is still a historically low rate.

Average 30 year jumbo mortgage rates are at 4.29 percent, up 1 basis point from last week's average of 4.28 percent. 30 year rates on average will also be near 5.00 percent by the end of this year.

Today's 15 year jumbo rates are averaging 4.10 percent, up from the previous week's average rate of 4.07 percent. Forecasts for 15 year rates by the end of this year are around 5.00 percent.

If you're thinking about buying a home, now is probably one of the best times over the past decade. Interest rates are still low and home prices are still lower than the peak bubble prices in many areas of the United States.

If you already own a home and are thinking about refinancing, now is the time. If you can refinance to a shorter term loan such as a 15 year instead of a 30 year loan, you will save tens of thousands or even hundreds of thousands of dollars in interest payments.