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Mortgage Rates Increase As Conflict Continues Overseas

By U.S. News & World Report

Thirty-year mortgage rates rose to 6.288% this week, an increase from 6.196% the previous week, according to U.S. News data. Mortgage rates have generally been dropping since the start of the year, but the recent conflict in Iran has pushed rates upward.

For the week ending March 6, mortgage applications rose 3.2% from the previous week, according to the Mortgage Bankers Association.

“Borrowers in recent weeks were able to get 30-year conforming rates below 6%, but with the current volatility, longer-term rates have moved up,” said Mike Fratantoni, MBA’s senior vice president and chief economist, in a statement.

Home Prices Continue to Rise, but Affordability Is Improving

In February, the median existing home sale price rose 0.3% year over year to $398,000, according to the National Association of Realtors. That marks the 32nd consecutive month of annual home price increases.

At the same time, NAR’s Housing Affordability Index rose to 117.6 in February, up from 117.1 in January and 103.1 a year ago. Affordability improved in all regions and just reached its highest level since March 2022. Given that home prices have continued to rise, lower mortgage rates may be the driving factor of improved affordability.

“Housing affordability is improving, and consumers are responding,” said Lawrence Yun, NAR chief economist, in a release. “Still, there is a long way to go to return to prepandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by 1 million.”

Interestingly, mortgage credit availability also increased in February, according to the MBA. A rise in mortgage credit availability suggests that lenders are loosening credit requirements, paving the way for more borrowers to qualify for home loans. However, the MBA confirmed that most of that increased credit availability applied to refinances.

“Most of last month’s supply growth was in loan programs that allowed for cash-out refinance and on investor homes,” said Joel Kan, MBA’s vice president and deputy chief economist, in a release.

[Read: Best Mortgage Refinance Lenders.]

Sluggish Real Estate Inventory Is Still a Problem

Lending to homebuyers’ struggle is the fact that housing inventory remains sluggish. In February, there was only a 3.8-month supply of homes for sale, unchanged from January, per the NAR. It typically takes a five- to six-month supply of homes to balance the housing market.

Although mortgage rates have been falling, they clearly haven’t dropped enough to push more property owners to sell. Many homeowners are sitting on low mortgage rates due to refinancing in the pandemic era when rates plunged. Until rates come down enough where existing homeowners are more motivated to sell, real estate inventory could remain stalled.

“Inventory is growing, but sluggishly,” Yun said. “If demand picks up notably in the coming months and outpaces supply growth, home prices will inevitably rise. That is why increasing supply is so important to help limit home price growth, improve housing affordability and boost transactions.”

More from U.S. News

How to Refinance a Rental Property

Is Mortgage Interest Tax Deductible?

Can You Get a Mortgage When You Owe the IRS?

Mortgage Rates Increase As Conflict Continues Overseas originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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