Mortgage Rate News
A four point jump in September has taken the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) to its highest reading since November of 2005. The increase, the fourth in as many months, elevated the composite measure of builder confidence in the market for new homes to 59.
The HMI is derived from responses new home buildersgive to a monthly survey which NAHB has conducted for 30 years. Builders are asked for their perceptions of current single-family home sales and their expectations for those sales over the next six months ranked as "good," "fair" or "poor." The survey also asks them to gauge current buyer traffic as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted composite index, the HMI. Scores over 50 for the HMI or any of its components indicates that more builders view conditions as good than poor....(read more)
The week ended September 12 saw the losses in application volume which occurred during the previous week which was shortened by the Labor Day holiday mostly reversed. Mortgage application volume increased in most categories by nearly the same percentages as they had fallen during the week ended September 5.
The Mortgage Bankers Association said that its Market Composite Index, a measure of mortgage application volume increased 7.9 percentfrom the previous week's seasonally adjusted index which had included an adjustment for the holiday. On an unadjusted basis the Index increased by 19 percent, offsetting the 17 percent decline the previous week....(read more)
As the U.S. economy improves and adds jobs, younger Americans-millennials-are slowly starting to move out from their parents' basements, where a record number of them have been living for the past few years. They're not buying homes as much as they are renting them, but how much and where is crucial to know in order to understand where the housing recovery is headed.
Over the past year, all the growth in net household formations has been among renters, according to the U.S. Census. For those 35 years old and younger, their home ownership rate has fallen from 44 percent to 36 percent over the past decade, which is why construction of multi-family apartments is at the highest level in a quarter-century this year.
Much has been made lately over the propensity of so-called millennials, the demographic cohort which is now between 18 and 34 years of age, to forgo homeownership. In its September Public Outlook Freddie Mac points out that this is not without an upside.
The monthly report, written by Freddie Mac's Chief Economist Frank E. Nothaft and Deputy Chief Leonard Kiefer, concedes that the recovery from the Great Recession has been "extraordinarily slow" but it has picked upover the last couple of years and that increasing recovery has been led by the multifamily sector, especially the development of rental apartments.
Lack of knowledge and misinformation may be discouraging Americans from buying a home according to a recent survey sponsored by Wells Fargo &Company. The survey, conducted in June by Ipsos Public Affairs, found that many prospective homebuyers do not take the plunge because of uncertainty about their ability to qualify for a mortgage or about navigating the homebuying process.
The survey, "How America Views Homeownership," found that many Americans say their financial houses are in order. Eighty percent said they know how to handle their personal financial affairs and 82 percent claim they generally don't spend beyond their means. Only 27 percent said that they tend to spend their money and not think twice about it. Sixty-three percent, including more than half of the millennials (ages 18 to 34) in the survey, said they have a "rainy day fund." These factors, the bank says, all improve on the ability to buy a home.
There are five key issuesconfronting the Federal Housing Finance Agency (FHFA) its director told a banking audience on Monday. The five, taken together, Director Mel Watt said, address both of FHFA's roles; conservator of the two government sponsored enterprises (GSEs) Freddie Mac and Fannie Mae and regulator of the two GSEs and the Federal Home Loan Banks.
Watt, speaking to the North Carolina Bankers Association's American Mortgage Conference, said his agency has requested public comment on all five of the issues and Monday was the deadline for comments on the first two; guarantee fee levelsfor the GSEs and eligibility requirements for their private mortgage insurercounterparties....(read more)
The Mortgage Bankers Association's (MBA's) measure of new home sales reflected a significant drop in the volume of applications for mortgages to purchase those homes in August. Data gathered through MBA's Builder Applications Survey (BAS) indicates that the number of applications decreased by 9 percent relative to the volume in July. The measure is not adjusted to account for typical seasonal patterns.
Based on the BAS and assumptions regarding market coverage and other factors MBA estimates that new single-family home sales in August were at a seasonally adjusted annual rate of 424,000 units. This is a change of -2.1 percent from the estimate for July of 433,000 units. On a non-adjusted basis sales in August were estimated to be approximately 34,000, down from 37,000 units the previous month, a decrease of 8.1 percent. Estimated August sales were 2.9 percent below sales in August 2013 of 35,000 units....(read more)
MBA's monthly report breaks down new home purchase applications by product type. Conventional loans made up 68.9 percentof loan applications and FHA loans...
Foreclosure activity increased significantlyin August according to the U.S. Foreclosure Market Report released Thursday by RealtyTrac. The increase included the first year-over-year uptick in scheduled foreclosure auctions in nearly four years.
There were foreclosure filings on a total of 116,913 properties during the month. Filings include default notices or foreclosure starts, scheduled auctions, and bank repossessions or completed foreclosures. While there was a 7 percent increase from the total number of filings in July, it was 9 percent below the level of activity one year earlier. The number of filings in August translates to one in every 1,126 U.S. housing units.
Mortgage applications displayed their worst volumes in months during the week ended September 5. That the week was shortened by the Labor Day holiday accounted for someof the bright red results, but even after adjustments to account for the holiday the application numbers were way down.
The Mortgage Bankers Association said that its Market Composite Index, a measure of mortgage application volume, was down 7.2 percent on a seasonally adjusted basis to the lowest level since December 2000. It was also the largest one week drop in the index since the week ended June 13. On an unadjusted basis the Composite lost 17 percent compared to the week ended August 29.
The market share of all-cash home sales continues to falland in June made up the lowest share since the beginning of the financial crisis. CoreLogic said today that cash sales comprised 33 percent of all home sales in June compared to 34.4 percent in May. Prior to the crisis cash transactions generally averaged 25 percent of all home sales. Cash sales hit a peak of 46.2 percent of sales in January 2011.
The share was also down on an annual basis. Cash sales made up 36.3 percentof sales in June 2013. The year-over-year share has fallen each month since January 2013.
Freddie Mac's HomeStep program, the vehicle through which the company sells its foreclosed property or REO, is experiencing increased numbers of multiple offers on its property a company executive said today. Buyer demand is colliding with shrinking supplies of REO and, according to HomeSteps Senior Vice President Chris Bowden, Freddie Mac's real estate sales unit sold two homes during the second quarter for every new home the unit received.
In an article in Freddie Mac's Executive Perspectivesblog Bowden writes that this is good news for taxpayers who are currently benefiting from Freddie Mac's profits, however, some potential buyers may be worried about being priced out of the REO market. The brokers who handle HomeStep properties are getting more questions from those buyers about how multiple offers are handled and how buyers can best position themselves to submit a winning one.
Consumer sentiment toward housing appeared to turn a bit negativein August. Fewer participants in Fannie Mae's National Housing Survey thought it was now a good time to either buy or sell a house; expectations about continued home price gains ratcheted down, and views about the overall economy were less positive than in July.
Fannie Mae said respondents' view of their own income both retrospectively and prospectively turned more bearish despite ongoing improvements in the labor market. But while attitudes softened, they suggest that housing activity may result in a modest recovery in 2015 after some pullback this year. Those who feel the overall economy is on the right track was unchanged at 35 percent but those giving "wrong track"answers fell 3 percentage points to 56 percent....(read more)
Housing America's Older Adults, a new study conducted by Harvard's Joint Center for Housing Studies for the AARP Foundation points to the problems for housing as America's population enters a period of unprecedentedaging. A combination of the baby-boom generation and increasing longevity means that the country's 50-and-over population will increase about 20 percent by 2030 to 132 million people. In 15 years one in five Americans will be at least 65, a total of 73 million, an increase of 33 million in just two decades. By 2040 there will be more than 28 million persons over age 80, three times the number in 2000.
Housing, the study says, is the linchpinof well-being and ensuring the older adults have the housing they need to enjoy high quality, independent, and financially secure lives has taken on new urgency, not only for individuals and their families but for the nation as a whole....(read more)
The Mortgage Bankers Association (MBA) said on Thursday that overall access to mortgage credit tightenedvery slightly in August. The Association's Mortgage Credit Availability Index (MCAI) decreased 0.3 percentage points from 116.4 in July to 116.1 last month.
Michael Fratantoni, MBA's Chief Economists said that while overall access to credit tightened from July to August, "We did see some loosening in certain segmentsof the purchase market. In particular, lenders instituted additional offerings of loan programs like the FHA 203(k)home improvement program and one-time-close programs for financing new construction."
Mortgage applications were virtually unchanged during the week ended August 29. The Mortgage Bankers Association said that its Market Composite Index, a measure of application volume, increased a marginal 0.2 percent from the previous week on a seasonally adjusted basis and was down 1 percent unadjusted.
The RefinanceIndex rose 1 percent from the previous week and, as purchase applications fell, had a slightly increased market share of 57 percent compared to 56 percent the previous week. The refinancing share of applications has trended up, albeit raggedly, since bottoming out at 49 percent during the week ended May 2. Its share last week was the highest since March.