The Washignton Post - 04.04.2020

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washington

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saturday,

april

4,

2020

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says even simple touches such as

white, fluffy towels, bright light-

bulbs, professionally cleaned

windows and raised blinds can

make a big difference.

The aim is for home shoppers

to “see themselves living there,”

says Nicholson, and then step for-

ward to make the home their own.

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sion it as a family room, office or

guest room.

“A ncillary bedrooms, smaller

or odd-shaped rooms” might be

staged minimally to suggest how

they could be used,” Atkins says.

In some rooms, a queen-size bed

and an 8-by- 10 rug, for example,

might be all that’s needed to dem-

onstrate the room size. Nicholson

tant eating and gathering center.

Not every room needs to be

staged. “The staples are the living

room, kitchen and master bed-

room,” Atkins says. Morrison’s

stager furnished the original,

s econd-floor master bedroom as

such; she gave the first-floor mas-

ter bedroom more versatile treat-

ment so that buyers could envi-

Because the rooms in Barrett’s

house are small, Morrison’s s tager

chose small-scale furnishings

that would not overpower the

space. She created an entry area

using a furniture arrangement,

and an inviting sitting area in the

living room. She was able to place

a small table and chairs in the

kitchen, to provide the all-impor-

store or discard them), and which

items to add from the stager’s

inventory.

Alex Williams, the third part-

ner of District Home Staging and

Homme Design Collective, says

the stager brings in and arranges

furniture and accessories, typical-

ly in a two-month rental, with

monthly extensions if needed.

Cover story

A step-by-step plan that can lead to selling a home for top dollar

[coronavirus] impacts. But these

well-intentioned measures may

have produced new challenges for

mortgage lenders and servicers,

who now face the prospect of

short-term cash shortages due to

missed payments and disruption

to u sually r eliable risk hedges.”

Uncertainty surrounding the

coronavirus outbreak has bred

volatility in mortgage rates. The

usual indicators of w here rates are

headed — namely the yield on the

10-year Treasury — are no longer

reliable predictors. Instead, what

is having a greater effect on mort-

gage rates is the capacity of lend-

ers to handle the huge volume of

refinances brought on by lower

rates and the increasing amount

of mortgage-backed securities the

Federal Reserve is b uying.

A mortgage-backed security, or

MBS as it is often known, is a

bundle of m ortgages that i s traded

on a secondary market. It’s a lot

like a Treasury. A mortgage rate is

largely based on MBS prices. The

higher the price, the lower the

rate. The MBS market usually is

one of the most liquid, meaning its

assets can be bought and sold

without causing significant price

changes. However, until the Fed

stepped in, a lack of buyers had

caused t he market t o seize up.

While the Fed’s action solved an

immediate problem, a new one has

popped u p. The erratic price chang-

es have caused margin calls on

mortgage lenders to reach record

levels. The margin calls are deplet-

ing the l enders’ working c apital and

jeopardizing their b usiness.

“Lenders are dealing with mul-

tiple issues at this point,” wrote

Michael Becker, branch manager

at Sierra Pacific Mortgage in Lu-

therville, Md. “Capacity to handle

the volume of loan applications;

liquidity constraints brought

about by margin calls largely as a

result o f the Fed b uying mortgage-

backed securities; and, most im-

portantly, uncertainty in regards

to the potential forbearance of

mortgage payments and the dam-

age that is doing to the value of

mortgage servicing rights. In this

environment, it’s hard to predict

the direction of mortgage rates as

there are wild swings day to day

and from lender to lender.”

Bankrate.com, which puts o ut a

weekly m ortgage rate trend index,

found that more than three-quar-

ters of the experts it surveyed pre-

dict rates will go down in the

coming week.

“The news is expected to get

worse, both economically and oth-

erwise, keeping bond yields and

mortgage rates low,” said Greg

McBride, c hief financial a nalyst at

Bankrate.com. “The functioning

of credit markets will also b e key to

rates remaining l ow.”

Meanwhile, mortgage applica-

tions picked up last week. Accord-

ing to the latest data from the

Mortgage Bankers Association,

the market composite index — a

measure of total loan application

volume — increased 15.3 percent

from a w eek e arlier. T he r efinance

index jumped 26 percent, while

the purchase index dropped

11 percent. It w as 24 p ercent lower

than t he same week a y ear ago.

The refinance share of mort-

gage activity accounted for

75.9 percent of a pplications.

“Mortgage applications reversed

course after two straight weeks of

declines, with refinances surging

26 percent and making up over

three-quarters of all activity,” said

Bob Broeksmit, M BA p resident and

CEO. “Meanwhile, the spreading

coronavirus is dampening what

was expected to be a very strong

spring buying season. Economic

uncertainty, job losses, and stay-in-

place orders imposed throughout

the country led to a considerable

decline in purchase activity on a

weekly a nd annual basis.”

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Mortgage rates

BY KATHY ORTON

As mortgage rates continued

their slide t his week, lenders faced

new challenges as they try to keep

up with refinancing demand and

cope with costly margin calls as a

result of the Federal Reserve’s in-

creased buying of mortgage-

backed securities.

According to the latest data re-

leased Thursday by Freddie Mac,

the 30 -year fixed-rate average

sank to 3.33 percent with an aver-

age 0.7 point. (Points are fees paid

to a l ender equal to 1 percent of the

loan amount and a re i n addition t o

the interest rate.) It was 3.5 per-

cent a week a go a nd 4 .08 percent a

year ago. In the past month, the

30 -year fixed-rate has fallen to a

record-low 3.29 percent, rebound-

ed to 3.65 percent two weeks later

and now gone back down.

The federally chartered mort-

gage investor aggregates rates

from 125 lenders across the coun-

try to come up with national aver-

age mortgage rates. It uses rates

for borrowers with flawless credit

scores. It is important to note the

rates quoted are not available to

every borrower.

The 15-year fixed-rate average

dropped to 2.82 percent with an

average 0.6 point. It was 2.92 per-

cent a week ago and 3.56 percent a

year ago. The five-year adjustable

rate average rose to 3.40 percent

with an average 0.3 point. It was

3.34 percent a week ago and

3.66 percent a year ago.

Mortgage rates continued “a

torrid stretch of wild swings that

has gone on for the better part of

the past three weeks,” said Mat-

thew Speakman, a Zillow econo-

mist. “A ggressive interventions by

the Federal Reserve initially

helped address some volatility in

rates brought upon by underlying

strains in the secondary markets

for mortgages. And actions taken

by other government agencies of-

fered support to many borrowers

who were at risk of missing

monthly payments because of

Rates tumble as lenders face increasing difficulties

istock

Lenders are struggling to keep up with refinancing demand, as the 30 -year fixed-rate average

sank to 3.3 3 percent.

Source: Freddie Mac

Weekly averages for

popular mortgage types

2.82

THE WASHINGTON POST

6%

4

5

3

2

1

’18 ’19 ’20

3.4 0

30 -YEAR FIXED

15 -YEAR FIXED

5-YEAR ARM

3.33

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