Struggles with high homeowners insurance prices — and mortgage interest rates — have cooled demand in the Louisiana real estate market.
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Like most of the nation, Louisiana has experienced a hike in mortgage interest rates during the past few years. Even though housing prices haven’t seen the spike that other states have lately, this additional cost has priced many would-be homebuyers out of the market and weakened buyer demand.
Local and national factors are affecting mortgage rates, homebuyers, and the real estate market in the Pelican State. Despite the challenges, there are several programs available to Louisiana residents to help with down payments, closing costs, and more.
WEEKLY TRENDS AND INSIGHTS
On the week of September 5, 2024, the current average interest rate for a 30-year fixed-rate mortgage decreased NaN basis points from the prior week to %. The current average interest rate on a 15-year fixed-rate mortgage decreased NaN basis points from the prior week to %.
For context, a 30-year fixed-rate mortgage was NaN basis points higher a year ago. As for a 15-year fixed-rate mortgage, it was NaN basis points higher a year ago.
Louisiana has a unique predicament in that neither high interest rates nor prices are its biggest real estate problem. Property insurance rates in Louisiana are some of the highest in the nation. Residents of Louisiana are projected to pay an average annual premium of $7,809 for homeowners insurance this year, compared to the current U.S. average of $2,377, according to the National Association of REALTORS®.
This is largely due to the devastation from the 2020 and 2021 hurricane seasons, which caused more than 20 insurers to become insolvent or leave the state. The problem for homebuyers is that even if they can handle the mortgage payments, they may not be able to find affordable homeowners insurance to close the loan.
The sky-high insurance premiums have weakened demand for housing and kept mortgage interest rates lower than the national average.
Nationally, mortgage rates have risen since the pandemic in response to the hike in the federal funds rate by the Federal Reserve. This is the interest rate that banks charge each other for overnight lending. Mortgages tend to track slightly higher than this rate. The Fed raised these rates to combat the rising inflation in 2022 and 2023.
Additionally, the U.S. Treasuries influences mortgage rates. Mortgages are riskier securities than Treasurys, so they generally run about 2 percentage points higher as they have to be more competitive to account for the additional risk.
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Louisiana has several homebuyer assistance programs. They are administered through the Louisiana Housing Corporation. Some are for first-time homebuyers only, while others are available to people in certain professions
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Mortgage rates drop or rise daily, reacting to changing economic conditions, central bank policy decisions, and investor sentiment. The table below shows recent trends in mortgage rates.
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General Information and Rate Disclosures: The listings that appear on this page are from companies that pay Credible compensation. This table does not include all companies or all available products. Displayed information is valid as of Sep 08, 2024 and assumes a customer with a 750 credit score borrowing a conventional loan for a single-family, primary residence, at or near zero discount points, and a 80% loan-to-home-value ratio. For products indicated as a jumbo (e.g. 30-year fixed jumbo rate), displayed information follows the same assumptions as a conventional loan but set at loan above the conforming limit. Here is an example of your payment based on a $400,000 loan amount, for each advertised loan term:
*Payments do not include amounts for taxes and insurance premiums, your actual payment obligation will be greater. The IP address of the customer accessing this page has been used to determine which U.S state should be used for pricing. In states where Credible does not have a license to operate, we are providing information about rates available in a nearby state. If you are viewing this page from an IP address in one of the states where Credible is not licensed, the rates displayed above are for consumers located in the neighbouring state shown below: IP state without license - Assumed location Missouri - Kansas Hawaii - California Rates, payments, and all information displayed are for informational purposes only and are subject to change without notice. This is not a credit decision or commitment to lend. Mortgage rates and terms you may qualify for depend on your individual financial circumstances. Payment Disclosures: All monthly payment amounts above assume on time monthly payments each month for the full duration of the loan term (e.g. 360 monthly payments for a 30 year loan). Displayed monthly payment amounts do not include amounts for property taxes and hazard insurance. Your actual monthly payment obligation will be higher. Amounts for borrower-paid mortgage insurance premiums are included in the monthly payment if (1) the loan amount is below the “conforming thresholds” set by Fannie Mae and Freddie Mac, and (2) the loan-to-home-value ratio is greater than 80%; mortgage insurance premiums are excluded from the monthly payment if either the loan amount is above the conforming thresholds or the loan-to-home-value ratio is less than or equal to 80%. Your actual payment obligation may be higher. “Conforming thresholds” depend on the county where the property is located. Fees Disclosures: The fee amounts shown above include estimates of loan costs and closing costs you may pay in connection with a mortgage transaction with the assumptions above. This includes fees the lender charges, including points and underwriting fees, and third party services the lender does not let you shop for such as a flood certification fee. It does not include title charges, recording costs, prepaids, initial escrow deposit, and other fees. ARM Disclosures: Variable rate products, such as ARMs, have interest rates that can change over the life of the loan. Changes in the interest rate will cause required payment amounts to change.” The displayed rate and payment will be in effect for the number of years in the product’s description (e.g. 5/1 ARM means the initial rate and payment are in effect for 5 years, 7/1 means they are in effect for 7 years, etc.), after which the rate and monthly payment will change every 12 months. Last updated on Sep 08, 2024. These rates are based on the assumptions shown here. Actual rates may vary. |
While you have no control over the broader market forces that govern mortgage interest rates, there are steps you can take to position yourself to qualify for the best rate possible when considering a home purchase:
The most common types of mortgages on the market in Louisiana are conventional, FHA, VA, USDA, and jumbo loans. Private lenders administer conventional and jumbo loans while government agencies administer FHA, VA, and USDA loans. However, government loans are underwritten by third-party banks and credit unions that also set their own qualification guidelines.
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