Latest news with #mortgage
Yahoo
6 hours ago
- Business
- Yahoo
Is AGNC Investment a Yield Trap? The Answer Is Complicated.
AGNC Investment has a huge dividend yield of more than 15%. The mortgage real estate investment trust's business model is a bit complex. If you're buying AGNC for the dividend, you might end up disappointed. 10 stocks we like better than AGNC Investment Corp. › The big story around AGNC Investment (NASDAQ: AGNC) is its shockingly large dividend yield of more than 15%. To put that yield into perspective, the S&P 500 index (SNPINDEX: ^GSPC) is yielding just 1.3%, and the average real estate investment trust (REIT) is offering 4.1%. You should never buy a stock just because of the yield, and that is important when considering AGNC Investment. Here's what you need to know. In general, REITs are simple to understand. They buy properties and lease them out to tenants, just like you would do if you owned a rental property. The difference is the scale of the assets, not the business model. AGNC Investment, however, isn't a property-owning REIT. It is a mortgage REIT. Mortgage REITs like AGNC buy mortgages that have been pooled together into bond-like securities. That's nothing like owning a property. What AGNC Investment does is more like running a bond mutual fund, which isn't something that most investors do. The mortgage securities it owns have pretty unique price drivers, including interest rates and things like housing market dynamics and mortgage repayment trends. It can be hard to track AGNC's business given the complexity here. There's a big data point that dividend investors need to understand. AGNC Investment's dividend, as the chart below highlights, has been falling for years. Even before that trend started, the dividend was a bit volatile. The stock price has basically tracked along with the dividend, up and down -- but mostly down -- over time. This isn't unique to AGNC Investment. The mortgage REIT sector is filled with graphs like the one above. Sometimes the dividend goes up and sometimes it goes down. If you bought this stock expecting a sustainable, and perhaps even growing, dividend, you ended up caught in a yield trap. The high yield just didn't live up to the expectations you had. The interesting thing here is that AGNC Investment's goal isn't exactly income. It is looking to provide an attractive total return, with reinvested dividends playing an important part in that story. As the chart below shows, AGNC's total return is actually pretty solid. Despite the stock price losing half its value over time, AGNC's total return has been competitive with that of the S&P 500 index. In fact, over some stretches, AGNC Investment's total return has handily beaten the index's return. That makes it an attractive choice for investors using an asset allocation model. But the key factor here is that total return requires shareholders to reinvest their dividends. If you spent those dividends, you ended up with less income and less capital, which is pretty much the worst possible outcome for a dividend investor. It's entirely possible that AGNC Investment will increase its dividend. Mortgage REIT peer Annaly Capital (NYSE: NLY) did just that at the start of 2025. But that doesn't change the fact that, like AGNC, Annaly has a long history of dividend cuts behind it. Volatile dividends are simply a part of the mREIT business model. If you buy AGNC Investment, or Annaly Capital, just because they have huge dividend yields, you are probably going to end up disappointed on the dividend front. If you buy them for their ability to provide a solid total return via an alternative asset class, well, you will likely be much happier. But you will need to reinvest the dividend to achieve strong long-term results. Before you buy stock in AGNC Investment Corp., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AGNC Investment Corp. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,670!* Now, it's worth noting Stock Advisor's total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is AGNC Investment a Yield Trap? The Answer Is Complicated. was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
6 hours ago
- Business
- Yahoo
M&T Bank quarterly profit rises on higher fees, lower rainy day funds
(Reuters) -M&T Bank reported a more than 9% rise in second-quarter profit on Wednesday, helped by higher fee revenue from its mortgage banking and trust businesses. Shares of the Buffalo, New York-based regional bank, which also set aside lower buffers in the quarter for potential losses on loans, were up 1.4% in premarket trading. U.S. consumers have remained healthy despite heightened uncertainty from tariffs and geopolitical turmoil. Executives across industries have noted that sentiment is improving, with businesses seeking further clarity on trade and monetary policy before making investments. Dealmaking has also picked up, anchored by tech-heavy initial public offerings and multi-billion dollar buyouts. M&T's total noninterest income rose to $683 million in the second quarter from $584 million in the year ago. This reflected a 23% increase in mortgage banking revenues, helped by higher residential mortgage loan servicing income. Trust income rose to $182 million from $170 million. The lender's provision for credit losses fell to $125 million from $150 million a year ago. M&T has historically had greater exposure to commercial real estate (CRE) loans compare with other regional banking peers. The lender has been trying to reduce the concentration of CRE loans on its balance sheet as the sector continues to struggle amid elevated interest rates and a dour macroeconomic outlook. Analysts believe the bank's loan growth will increasingly start pulling ahead of peers as CRE headwinds fade. The company recently said CRE forms about 19% of its balance sheet. M&T's average CRE loans fell 19.5% to $25.33 billion in the quarter, while average consumer loans rose to $25.35 billion from $21.97 billion in the year-ago period. Its net income rose to $679 million, or $4.24 per share, in the three months ended June 30 from $626 million, or $3.73 per share, a year ago. Melden Sie sich an, um Ihr Portfolio aufzurufen.
The Independent
6 hours ago
- Business
- The Independent
The £200 billion landbank that could boost the UK's housing supply
West One Loans is a Business Reporter client How UK housebuilders are tapping into land to accelerate homebuilding amid rising demand, improved mortgage affordability and government pressure for delivery. The nation's biggest housebuilders have been using their landbanks, worth a combined value of £200 billion, to deliver more homes to market in the face of growing buyer demand spurred by improving market confidence and greater mortgage affordability. West One Loans, a leading provider of property finance and specialist mortgages, has analysed the latest company reports for eight of the nation's biggest housebuilders, to see which currently boasts the strongest pipeline with respect to their individual landbanks and the value of these plots in the current market. The government has been vocal in its demands for the nation's housebuilders to 'roll up their sleeves' to help achieve the ambitious target of 1.5 million new homes by 2029. So much so, it recently announced tough new rules forcing developers to commit to delivery time frames for planning permission, with those caught slacking risking losing their land to local authorities. However, the latest analysis by West One Loans shows that the majority of the nation's major housebuilders are already rising to the challenge, having reduced their landbank pipelines as a result of delivering more homes. The analysis shows that, across eight of the nation's biggest housebuilders, some 488,620 landbank plots were recorded within 2024 reports. Based on the current average UK new-build house price of £406,390, this means the total pipeline of these eight developers alone is worth an estimated £198.6 billion. Bellway currently boasts the most robust pipeline, with 95,292 landbank plots reported in its 2024 figures, holding an estimated market value of £38.7 billion. Persimmon ranks second, with 82,084 plots in its pipeline, worth an estimated £33.4 billion, whilst Taylor Wimpey sits third at £32 billion in market value across 78,626 landbank plots. However, while these developers have maintained a robust pipeline of plots, further analysis by West One Loans shows that there has been an increase in development activity on landbanks, no doubt driven by improving market conditions and increasing buyer demand as a result of a stabilising mortgage market. Across all eight major housebuilders, total landbank volumes have fallen by 3.6 per cent over the last year. In fact, all but one of the developers analysed by West One Loans has reduced the size of its landbank. Vestry Group has broken the most ground in this respect, with a -7.9 per cent year on year reduction in landbank volume. Berkeley Group has seen a -6.8 per cent reduction, while Crest Nicholson has seen an annual drop of -6 per cent. Only Miller Homes has seen an increase in this respect, although it's a marginal one, with its landbank volumes up by 0.1 per cent on an annual basis. 'It's clear that, while many of the nation's developers have been sure to maintain a robust pipeline of landbank plots, they have also been pushing forward and breaking ground in order to bring more homes to market to meet growing demand,' says Co-Head of Short-Term Finance at West One Loans, Thomas Cantor. 'This is despite the fact that the current landscape still presents a range of challenges. But, as interest rates have stabilised, we've seen more housebuilders turn to the specialist finance sector to help them facilitate their ambitions 'This has largely taken the form of a greater reliance on bridging in order to help part fund their initial project, as well as utilising development finance in order to exit existing builds in order to push forward with the next. 'We've seen numerous examples over the past 12 months where developers have utilised us to help them in both instances and, finding a finance specialist that can do so will ensure a far smoother process throughout.' Data tables and sources Data on landbank volumes sourced from each of the eight housebuilders individual company reports for 2024 - sourced within the data tables linked below.
Yahoo
6 hours ago
- Business
- Yahoo
Mortgage and refinance interest rates today, July 16, 2025: Small moves as home loan rates remain without direction
Mortgage interest rates are moving in opposite directions based on loan terms, but only slightly. According to Zillow, the average 30-year fixed rate dropped three basis points to 6.68%. Meanwhile, the 15-year mortgage rose nine basis points to 5.93%. Pressure is mounting for the replacement of Federal Reserve Chairman Jerome Powell, as the latest inflation data pushed expectations for an interest rate cut farther down the road. It is widely expected that any successor would be in favor of cutting short-term interest rates, as President Trump has insisted. Traders sold bonds Tuesday, including on the 10-year Treasury, a benchmark for mortgage rates. As a result, yields jumped higher. Read more: Housing costs are still the stickiest part of an otherwise cool inflation report Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.68% 20-year fixed: 6.43% 15-year fixed: 5.93% 5/1 ARM: 7.42% 7/1 ARM: 7.45% 30-year VA: 6.33% 15-year VA: 5.75% 5/1 VA: 6.50% Remember, these are the national averages and rounded to the nearest hundredth. Learn more: Here's how mortgage rates are determined These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.76% 20-year fixed: 6.51% 15-year fixed: 6.06% 5/1 ARM: 7.62% 7/1 ARM: 7.69% 30-year VA: 6.39% 15-year VA: 6.17% 5/1 VA: 6.34% Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case. Use the mortgage calculator below to see how various interest rates and loan amounts will affect your monthly payments. It also shows how the term length plays into things. To dive deeper, use the Yahoo Finance mortgage calculator, which includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and homeowners' association dues if those apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated your mortgage principal and interest. There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable. A 30-year fixed-rate mortgage has relatively low monthly payments because you're spreading your repayment out over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike with an adjustable-rate mortgage (ARM), your rate isn't going to change from year to year. Most years, the only things that might affect your monthly payment are any changes to your homeowners insurance or property taxes. The main disadvantage to 30-year fixed mortgage rates is mortgage interest — both in the short and long term. A 30-year fixed term comes with a higher rate than a shorter fixed term, and it's higher than the intro rate to a 30-year ARM. The higher your rate, the higher your monthly payment. You'll also pay much more in interest over the life of your loan due to both the higher rate and the longer term. The pros and cons of 15-year fixed mortgage rates are basically swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years sooner. So you'll save potentially hundreds of thousands of dollars in interest over the course of your loan. However, because you're paying off the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term. Dig deeper: 15-year vs. 30-year mortgages Adjustable-rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once per year for the remaining 25 years. The main advantage is that the introductory rate is usually lower than what you'll get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't reflect this, though — fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.) With an ARM, you have no idea what mortgage rates will be like once the intro-rate period ends, so you risk your rate increasing later. This could ultimately end up costing more, and your monthly payments are unpredictable from year to year. But if you plan to move before the intro-rate period is over, you could reap the benefits of a low rate without risking a rate increase down the road. Learn more: Adjustable-rate vs. fixed-rate mortgage The national average 30-year mortgage rate is 6.68% right now, according to Zillow. But keep in mind that averages can vary depending on where you live. For example, if you're buying in a city with a high cost of living, rates could be even higher. Mortgage rates will likely remain in a tight range over the next few months. There are many questions regarding the economy, inflation, and the job market. Don't look for big moves in interest rates unless bad economic news develops. Not significantly. Mortgage rates continue to be about where they were one year ago. In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing into a shorter term will also land you a lower rate, though your monthly mortgage payments will be higher.
Forbes
6 hours ago
- Business
- Forbes
Mortgage Rates Today: July 16, 2025
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. The current average mortgage rate on a 30-year fixed mortgage is 6.75%, according to the Mortgage Research Center. The average rate on a 15-year mortgage is 5.73%, while the average rate on a 30-year jumbo mortgage is 6.96%. Borrowers will pay more in interest this week as the average rate on a 30-year mortgage is 6.75% compared to a rate of 6.74% a week ago. The APR , which includes the interest and all of the lender fees, on a 30-year, fixed-rate mortgage is 6.78%. The APR was 6.77% last week. To borrow a $100,000 in a 30-year, fixed-rate mortgage with the current rate of 6.75%, you will pay about $649 per month in principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. You'd pay around $134,238 in total interest over the life of the loan. Today's 15-year mortgage (fixed-rate) is 5.73%, up 0.17% from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 5.72%. The APR on a 15-year fixed is 5.77%. It was 5.76% a week earlier. A 15-year, fixed-rate mortgage with today's interest rate of 5.73% will cost $829 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $49,705 in total interest. The current average interest rate on a 30-year fixed-rate jumbo mortgage (a mortgage above 2025's conforming loan limit of $806,500 in most areas) is 6.96%. Last week, the average rate was 7.04%. If you lock in the latest rate on a 30-year, fixed-rate jumbo mortgage, you will pay $663 per month in principal and interest per $100,000 borrowed, which amounts to $139,098 in total interest over the life of the loan. Although mortgage rates mainly fell after reaching a high in spring 2024, they surged again in October 2024. This is despite the Federal Reserve's cuts to the federal funds rate (its benchmark interest rate) in September, November and December 2024. While rates have fallen somewhat since mid-January 2025, experts don't expect them to drop significantly anytime soon. Mortgage rates are influenced by various economic factors, making it difficult to predict when they will drop . Mortgage rates follow U.S. Treasury bond yields. When bond yields decrease, mortgage rates generally follow suit. The Federal Reserve's decisions and global events also play a key role in shaping mortgage rates. If inflation rises or the economy slows, the Fed may lower its federal funds rate. For example, during the Covid-19 pandemic, the Fed reduced rates, which drove interest rates to record lows. A significant drop in mortgage rates seems unlikely in the near future. However, they may decline if inflation eases or the economy weakens. Everyone's budget and financial goals vary. How much house you can afford comes down to a number of factors, including what you earn and what you owe. You'll also want to consider how much you want to save for retirement, school and other expenses down the road. Here are a few basic factors that go into what you can afford: Income Debt Debt-to-income ratio (DTI) Down payment Credit score Home loan borrowers can qualify for better mortgage rates by having good or excellent credit, maintaining a low debt-to-income (DTI) ratio and pursuing loan programs that don't charge mortgage insurance premiums or similar ongoing charges that increase the loan's APR . Comparing rates from different mortgage lenders is an excellent starting point. You may also compare conventional, first-time homebuyer and government-backed programs like FHA and VA loans, which have different rates and fees. Several economic factors influence the trajectory of rates for new home loans. For example, Federal Reserve rate hikes indirectly cause the interest rates for many long-term loans to increase. Rates are more likely to decrease when the Fed pauses or decreases its benchmark Federal Funds Rate. The inflation rate and the general state of the economy also impact interest rates. High inflation and a strong economy typically signal higher rates. Cooling consumer demand or inflation may lead to rate decreases. Many home buyers are eligible for several mortgage loan types . Each program can have its own advantages: Conventional mortgage. A conventional home loan is ideal for borrowers with good or excellent credit to qualify for competitive rates. Additionally, making a minimum 20% down payment helps you waive private mortgage insurance premiums. A conventional home loan is ideal for borrowers with good or excellent credit to qualify for competitive rates. Additionally, making a minimum 20% down payment helps you waive private mortgage insurance premiums. FHA loan. An FHA home loan is best when applying with imperfect credit or a low down payment. You can put as little as 3.5% down with a credit score above 580. A minimum 10% down payment is necessary for credit scores ranging from 500 to 579. An is best when applying with imperfect credit or a low down payment. You can put as little as 3.5% down with a credit score above 580. A minimum 10% down payment is necessary for credit scores ranging from 500 to 579. VA loan. Borrowers with a qualifying military background may prefer a VA loan for its flexibility. A down payment may not be required. While you pay a one-time funding fee , there are no ongoing mortgage insurance premiums or service fees. Borrowers with a qualifying military background may prefer a for its flexibility. A down payment may not be required. While you pay a one-time , there are no ongoing mortgage insurance premiums or service fees. USDA loan. Applicants in eligible rural areas can buy or build a home with no down payment, although an upfront and annual guarantee fee applies. Additionally, income requirements apply and this program requires a moderate income or lower. Applicants in eligible rural areas can buy or build a home with no down payment, although an upfront and annual guarantee fee applies. Additionally, income requirements apply and this program requires a moderate income or lower. Jumbo loan. Homebuyers in a high-cost-of-living area will need to apply for a jumbo loan when the loan amount exceeds the Federal Housing Finance Agency's conforming loan limits. The limit in most municipalities is $806,500 in 2025. Frequently Asked Questions (FAQs) Comparing lenders and loan programs is an excellent start. Borrowers should also strive for a good or excellent credit score between 670 and 850 and a debt-to-income ratio of 43% or less. Further, making a minimum down payment of 20% on conventional mortgages can help you automatically waive private mortgage insurance premiums, which increases your borrowing costs. Buying discount points or lender credits can also reduce your interest rate. Most rate locks last 30 to 60 days and your lender may not charge a fee for this initial period. However, extending the rate lock period up to 90 or 120 days is possible, depending on your lender, but additional costs may apply. National average interest rates depend on economic and market conditions, including the bond market, inflation, the economy and Federal Reserve decisions. Lenders set rates based on the loan type and term. In general, shorter terms tend to come with lower rates. Additionally, making a larger down payment signals less risk to the lender, which could get you a better rate. Other factors that can impact your rate include your credit score, debt-to-income (DTI) ratio, income and property location.
