MaineHousing drops interest rate to attract more first-time homebuyers
Photo / Maureen Milliken
MaineHousing has dropped its base mortgage interest rate as National Homeownership Month begins.
AUGUSTA — MaineHousing has dropped its base interest rate to 3.625%, down from 3.95%, beginning Saturday, June 1, to encourage more first-time home buyers, the agency said.
The drop, which is lower than the average mortgage interest rate in the state, is timed to kick off National Homeownership Month, MaineHousing Director Daniel Brennan said in a news release.
The current average for a 30-year fixed-rate mortgage in Maine is 4.51%, down 0.23% over the last three months, according to Lendingtree. The 15-year fixed-rate mortgage average is 4.02%, also down 0.23% and the 5/1 adjustable-rate mortgage average is 4.04%, showing no change over three months, but down 0.14 since last week.
The MaineHousing base rate interest drop comes at a time when the cost of housing in Maine is rising faster than income, according to statistics from MaineHousing's data page.
“In keeping with our mission of creating pathways for Mainers to own their own home, we’re excited to decrease our rate just in time for Homeownership Month,” said Brennan, He said that in addition to the other aspects of the organization's First Home Loan Program, which helps Mainers become home buyers, "We are committed to maintaining a low interest rate to make home ownership a reality for as many Mainers as we can.”
The agency said that rates may fluctuate, and the drop is in its base rate.
MaineHousing, which was created by the Legislature in 1969 as the Maine State Housing Authority, and combines public and private financing to make housing more affordable to low- and moderate-income buyers. It provides assistance and financing, with lower-cost mortgage options, as well as support, information and advocacy.
According to MaineHousing's affordability index, the median salary needed to buy a house in Maine has risen $16,386 from 2014 to 2018.
In 2014, the median price of a home in Maine was $170,000, and to afford that home, a person had to make $47,381. The state's income was $49,747, and a person making that could afford a home of $176,000.
In 2018, the state's median home price $212,500, and a person had to have an annual income of $64,367 to afford a house of that price. The state's median income was $56,987, and someone making that could afford a house costing $188,138.
The most recent U.S. Census figures, those for 2013-2017, shows that there are 746,596 owner-occupied housing units in Maine — some 72% of the state's housing is owner-occupied. The Median value of the units is $179,900 with the median monthly cost, including mortgage, $1,357. The statistics don't differentiate between whether it's a single-family home or other type of owner-occupied housing.
Aside from assistance to low to moderate-income home buyers, MaineHousing also funding for low-income rental projects in the form of the 9% Low Income Housing Tax Credit, which it allocates. It also provides subsidy and paying loans to the projects — some recent ones include Lewiston's Hartley Block and Auburn's 48 Hampshire.
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