The Federal Housing Administration is reducing annual mortgage insurance premiums by 50 basis points, from 1.35% to .85%.  That would save a family buying an average home about  $900 per year (that is the equivalent of lowering the interest rate a half a per cent).  THIS IS EFFECTIVE JANUARY 26TH!

From the Tennessee Association of Realtors:   

1. Mortgage Rates Fall to Lowest Level Since 2013!

Mortgage interest has dropped to levels not seen since May 2013, according to Freddie Mac. The company reports that average interest on 30-year fixed loans landed at 3.73 percent this past week compared to 3.87 percent the prior week and 4.51 percent a year ago. The 15-year fixed rate, meanwhile, slipped to 3.05 percent from 3.15 percent the previous week and from 3.56 percent at the same time in 2014. Despite the persistently low borrowing costs, many would-be home buyers remain on the sidelines due to the inability to cobble together a down payment or qualify for financing.

Note: this may include discount points

2. NAR Predicts Sales To Rise By Nearly 7 Percent in 2015

In a newly released video on his 2015 housing market expectations, National Association of Realtors (NAR) chief economist Lawrence Yun forecasts that resales will rise about 7 percent this year thanks to three factors: a strengthening economy, solid job gains, and a healthy increase in home prices.

In the video, Yun states, "Home prices have risen for the past three years cumulatively about 25 percent, which boosts confidence in the market and traditionally gives current homeowners the ability to use their equity buildup as a down payment towards their next home purchase." He also expects first-time buyers to slowly move from the sidelines, especially as new mortgage products are made available to them with low down payments and private mortgage insurance.

On the downside, Yun cites three areas of concern -- a likely rise in interest rates, lenders' slow pace in easing underwriting standards back to normalized levels, and homeowner unwillingness to move due to comfort with an existing low interest rate -- that could slow the pace of sales in 2015.