Mortgage rates broke from tradition today by maintaining an almost perfectly flat trajectory leading up to Thanksgiving. This time of year is typically marked by lighter participation among the trading community whose trades ultimately dictate mortgage rates. When fewer of them are about, volatility can increase in financial markets. In years past, it's been common to see a small imbalance among traders translate to a quick move in one direction or another for rates.
Perhaps there is more uncertainty and anxiety this year, resulting in market participants being less willing to bet too strongly for or against any particular rate movement.
In short, the general loan limits remain unchanged from 2015's levels, but several high-cost county limits have been increased. As a reminder, Fannie Mae has a useful Loan Limit Look-Up Table which has been revised with 2016's new amounts. Clicking this link will prompt a download of the excel spreadsheet, which includes every county's loan limits and numerical codes. Or you can access Fannie's loan limit page HERE. The FHFA provided a useful PDF that exclusively highlights the counties that changed HERE. Alternatively, here is the entire list (click to enlarge):
New home sales in October reversed their sharp downturn in September and also bucked other recent sales trends, rising by a substantial 10.7 percent. The U.S. Census Bureau and the Department of Housing and Urban Development reported today that sales of newly constructed homes were at a seasonally adjusted annual rate of 498,500 units, up from a revised September rate of 447,000. The October number was 4.9 percent higher than the previous October's pace of 472,000 units.
The revision of the September number paints an even dimmer picture of those sales. They were originally reported at a rate of 468,000 units, already 11.5 percent below sales in August. Despite the strong October number sales are still below the half-million and higher numbers posted in July and August.
Price increases did not slow in the third quarter as expected the Federal Housing Finance Agency (FHFA) said today. The agencies purchase-only seasonally adjusted House Price Index (HPI) for the quarter shows that prices rose for the 17th consecutive quarter and posted the largest month-over-month gain since at least that in March to April.
The combined report for September and for the third quarter is based on home sales price information taken from mortgages sold to or guaranteed by the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The monthly index rose 0.8 percent from August and the quarterly measure was 5.7 percent higher than in the third quarter of 2014....(read more)
Mortgage applications were a bit of a mixed bag during the week ended November 20, a week in a hammock strung between two holidays. The Mortgage Bankers Association said its Market Composite Index, a measure of application activity, was down by 3.2 percent on a seasonally adjusted basis from the previous week but increased by 6 percent on an unadjusted basis. The data from the week ended on November 13 had included an adjustment for that week's Veterans' Day holiday.
The Refinance Index decreased 5 percent from the previous week and the refinance share of all mortgage applications increased very slightly, from 58.6 percent to 58.7 percent....(read more)
Mortgage rates held steady today on average, with a few lenders improving almost imperceptibly. The most prevalently-quoted conventional 30yr fixed rate remains 4.0% with more than a few lenders still up at 4.125%.
If this week is to end up being anything like Thanksgiving weeks of the past, it has a lot of catching up to do, and a very small window of time to do it. The bond markets that underlie mortgage rate movement tend to see a quick move in either direction over the first 3 days of the week and a bounce back from that move by the following week. This time around, markets have been almost completely silent. If we don't see the characteristic holiday volatility tomorrow or Friday (markets are closed on Thursday), it will set the stage for even greater anticipation heading into December's market moving events.
Black Knight Financial Service's monthly "first look" at October month-end mortgage performance standards continues to show a steady decline almost all measures of mortgage distress. The company releases summary data from its loan-level database in advance of a more comprehensive analysis in its Mortgage Monitor published early the following month.
There were 2.415 million homes on which the mortgage was 30 or more days overdue in October but which were not yet in foreclosure, a national delinquency rate of 4.77 percent. The number of delinquent mortgages fell by 42,000 between September and October, -1.93 percent, and are down 316,000 units from October 2014 a -11.91 percent change....(read more)
Home prices continue to rise faster than the rate of inflation and the increase speeded up again in September. The S&P/Case-Shiller U.S. National Home Price Index (HPI), recorded a slightly higher year-over-year gain in September, up 4.9 percent compared to the 4.6 percent annual increase posted across the nine U.S. census divisions in August.
The 10-City Composite increased 5.0 percent over the 12 previous months in September compared to 4.7 percent change in August while the 20-City Composite's year-over-year gain was 5.5 percent versus 5.1 percent. After adjusting for the Consumer Price Index (CPI) core rate of inflation, the National HPI rose 3 percent from September 2014 to September 2015.
Mortgage rates rose today for most lenders, albeit modestly. In fact, several lenders were unchanged from Friday's latest levels with the rest seeing varying degrees of weakness. In almost all cases, the weakness would be seen in the form of higher closing costs or lower lender credit (as opposed to the actual contract rate being higher). The most prevalently-quoted conventional 30yr fixed note rate continues to be 4.0% on top tier scenarios, though there are more than a few lenders at 4.125%.
The week of Thanksgiving is often marked by serendipitous volatility for the bond markets that underlie mortgage rate movement.
Pending sales, which had declined in both September and October did indeed prove to be a leading indicator for existing home sales in October. The National Association of Realtors® said on Monday that, while October sales were at a healthy pace, they did decline by 3.4 percent from sales in September.
Existing single-family homes, townhomes, condominiums, and co-op apartments were at a seasonally adjusted annual rate of 5.36 million units in October compared to 5.55 million in September. Despite the month-over-month dip sales were still higher than a year ago by 3.9 percent. Analysts were expecting sales to be at a 5.4 million annual rate.