Mortgage Rate News
Fifty-six percent of loans closed in December were for home purchase, somewhat lower than the average for 2014 as a whole according to the Origination Insights Report from Ellie Mae. Lower interest rates pushed refinancing numbers higher toward the end of the year, increasing originations for that purpose from the years low of 32 percent in July to 45 percent in November but the refinancing shared dipped to 43 percent in December, allowing the reciprocal share of purchase mortgages to increase for the first time in four months.
For the entire year purchase loans had a 61 percentshare of all originations and refinance loans were 38 percent of the total. In 2013 refinancing constituted 53 percent of all loans and purchases 47 percent. There was a big difference, however, in the statistics for FHA loans and conventional loans. Conventional loans were fairly evenly split as to purpose; 47 percent for refinancing, 52 percent for purchase. Eighty one percent of FHA backed originations in 2014 were purchase loans.
The rate at which contracts were signed to purchase homes was down slightly in December the National Association of Realtors® (NAR) said today. Even though buyers were looking at the lowest interest rates of the year NAR’s Pending Home Sales Index (PHSI) was down 3.7 percentto 100.7 from the November level of 104.6. This was the largest decline in the Index since December 2013 when it dropped 5.8 percent.
Despite the monthly number NAR said that the PHSI, a forward-looking indicator of sales, closed out the year 6.1 percent higher than at the same time in 2013, the highest annual gain since it rose 11.7 percent from June 2012 to June 2013.
Freddie Mac's Multi-Indicator Market Index (MiMi) rose nationally this month for the third consecutive time. This, along with improving three month trendsin thirty-four states and the District of Columbia and 37 of 50 metropolitan areas shows, the company said, that the U.S. housing market is continuing to stabilize. The same time last year, 34 states plus the District of Columbia, and 41 of the top 50 metro areas were showing an improving three month trend.
Len Kiefer, Freddie Mac Deputy Chief Economist said, "Housing markets are stabilizing. Low mortgage rates help to keep affordability in-check across many markets. Labor markets are strengthening, but generally have room for improvement. We're keeping an eye on markets with deep ties to energy. We've noticed some deteriorationon a month-over-month basis in some of these energy markets, especially smaller markets with less diversified economies. Overall MiMi has improved for the third consecutive month showing housing markets are getting back on track."
The law of physics prevailed last week and mortgage applications, riding high for the previous two weeks, returned to earth. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of loan applications volume, was 3.2 percent lower during the week ended January 23 than it had been a week earlier. On an unadjusted basis the index was down 12 percent.
It was another week in which seasonally adjusted numbers were tweaked to account for a holiday, in this case Martin Luther King Day, but the data was still an abrupt departure from the two full weeks that kicked off 2015. During the week ended January 16 the seasonally adjusted index rose 14.2 percent on top of an increase of 46.7 percent the week before. The unadjusted indices had been up even more dramatically, with increases of 17 percent and 119 percentrespectively.
Melvin L. Watt, appeared before the House Financial Services Committee on Tuesday, his first such appearance since he became director of the Federal Housing Finance Agency (FHFA) a year ago. Watt, in his prepared remarks, recounted to committee members some of the efforts of FHFA over the past year and its plans for the next few. FHFA is regulator of the Federal Home Loan Banks and both regulator and conservator of the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
The majority of Watt's testimony concerned the GSEs He said his agency had acted consistently over the past year to ensure their safety and soundness and to make sure they both provide liquidity to the housing markets and meet their obligations to homeowners as specified by the Emergency Economic Stabilization Act of 2008 (EESA).
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