Time to Refinance? The 4% Mortgage Is Back
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With your money briefing, I'm J.R. Whelan at The Wall Street Journal in New York. Have you thought about refinancing your house or apartment? Now could be an ideal time with mortgage interest rates on the way down again. But how long will rates stay low? We'll hear from the Journal's markets team in a moment. First, these money and market stories you should know. Robocalls have become public enemy number one for some people, and an estimated 48 billion unwanted robocalls were made to U.S. mobile phones last year.
Should I consider refinancing now that mortgage rates fell near 4%?
So what about that Do Not Call registry? Well, the FTC, which runs the Do Not Call registry, has fined violators of the registry about $1.5 billion since 2014, and it's collected about $121 million of that total. Meanwhile, the FCC hasn't been as effective in collecting from the robo-bad guys, It's levied about $208 million in fines since 2015, but so far has only been able to collect about $6,800. Both agencies tell the Wall Street Journal there are challenges to collecting penalties. For one, small illegal operations can quickly close up shop and change their names, and some are based overseas, making it difficult to identify or seize assets. And the Journal's Real Estate Bureau reports that actor Bruce Willis has put his sprawling beachfront compound in Turks and Caicos on the market for $33 million.
Willis bought the seven-acre property in 2000 and completed the home in 2004. It's a roughly 13,500 square foot Asian-inspired compound with five bedrooms across the main house and two adjacent smaller homes known as casitas. If you decide to buy, you get a shaded yoga pavilion along with banana, coconut, and papaya trees. And for the kids, an area for beach volleyball along with a pirate ship playground.
How does a 4% mortgage rate sound to you? Well, how about even lower? That's where we are now. The housing market is one of the most closely watched gears of the economy. And Journal of Markets reporter Ben Isen is here to go inside the numbers with us. So, Ben, it wasn't all that long ago that mortgage rates were averaging up near 5%.
Yeah, you had mortgage rates around 5% back in November, and since then they've really taken a dive. And especially in the last week, you've really seen mortgage rates fall. Now they're down at 4.06%, so pretty close to 4.
And you spoke to a gentleman in Connecticut who got two very different mortgage rate quotes in just the span of a week.
Yeah, last week he was quoted 4.375% and he checked back this week and he was at 3.99%. So what you've really seen is the yield on the 10-year Treasury note, which is sort of what guides the mortgage rate, has really fallen a lot over the last couple of days. You have that happening as the Federal Reserve takes a pause on interest rate increases. And there's also kind of some concern about the pace of the economy. So you have all of that contributing to pressure on the 10-year Treasury yield. And with that, mortgage rates have really just kind of shot down.
Now, even though the mortgage rates have come down, and that could be good for homebuyers, the housing market faces still some obstacles.
It's true. Home prices have really kind of risen a lot over the last few years, and affordability has become an issue. It's been an issue for the last decade, but especially now, after all the home price appreciation we've seen, By one analysis that we looked at, pretty much almost three quarters of people who earn an average wage would find home ownership unaffordable based on the counties they live in. And that's definitely a big obstacle.
So where are some of the areas where housing prices are really out of control and not seen as being affordable? And then there are places where housing is more affordable.
This is sort of a long running trend here, which is what contributes to the unaffordability of housing. But The kind of more expensive coastal areas are where you're seeing things become particularly unaffordable. Places like Los Angeles, San Diego, Orange County, Miami, also Phoenix. Whereas the places that are still kind of more affordable are more in the Midwest, places that haven't experienced as rapid growth.
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