Mortgage Rates maintained their recent winning streak today, falling for the 5th straight day. The average lender is now offering the best rates in nearly 2 months. You'd have to go back early August or late July (depending on the lender) to see a better combination of rate and upfront cost.
This brings up a caveat that has been important in the past few months. The outright range of rate movement has been exceptionally small! We talk about "rates" moving every day, but that's just convenient shorthand for "the combination of NOTE RATE and UPFRONT LENDER COSTS." Those upfront costs are sometimes referred to as "points," but that isn't a universal definition. Regardless of the label, this refers to whatever costs the lender is charging (or paying) at closing. These usually include things like origination fee, discount, processing, etc... anything that is paid to the lender....(read more)
Fannie Mae has announced the implementation of a new version of its automated underwriting system. The company said Version 10.0 of Desktop Underwriter (DU) "provides more simplicity and certainty to lenders through the use of trended credit data for enhanced credit risk assessment and new automated underwriting capabilities to serve borrowers with no traditional credit and for borrowers with multiple financed properties."
The company introduced the concept of trended credit data with enhancements to DU in October 2015. It said the new version of the software will promote "the first widespread use in the mortgage industry, and will benefit both consumers and lenders."...(read more)
While the annual gains in its nationwide index accelerated slightly in July the S&P CoreLogic Case-Shiller 10- and 20-City Composite Indices showed a slight slowing on an annual basis. The U.S. National Home Price Index, covering all nine U.S. census divisions showed prices rising 5.1% over the 12 months ending in July compared to a June to June gain of 5.0 percent. On a month-over-month basis the National Index was up 0.7 percent (compared to 0.1 percent in June) on a non-seasonally adjusted basis and 0.4 percent when adjusted.
The 10-City Composite Index slowed from a 4.3 percent appreciation in June to 4.2 percent in July and the 20-City slipped by 0.1 point to 5.0 percent. Portland, Seattle, and Denver led in gains among the 20 cities for the sixth consecutive month with Portland posting a 12.4 percent increase followed by Seattle at 11.2 percent, and Denver with at 9.4 percent. Nine cities reported greater price increases in the year ending July 2016 than they did for the year ending in June....(read more)
Mortgage Rates were lower again today, marking the 4th straight day of improvements and the 8th day without a meaningful increase. This brings the average lender back in line with levels seen on September 7th. Before that, you'd have to go back at least to early August to see anything lower.
Admittedly, the "lowest rates since early August" sounds a lot more exciting than it actually is. The overall range of rates during that time continues to be exceptionally narrow. For most lenders conventional 30yr fixed quotes never went above 3.5% during that time, and never went lower than 3.375% on top tier scenarios....(read more)
Black Knight Financial Services released its Home Price Index (HPI) report for July on Monday and, unlike reports from CoreLogic and the Federal Housing Finance Agency (FHFA) reports for the month (the fourth report, the CoreLogic Case-Shiller indices is due out on Tuesday) it shows a distinct slowing in the pace of price appreciation over the past few months.
Black Knight reports its national index for July was $266,000. This is 0.4 percent higher than its index for June and up 5.3 percent compared to August 2015. The month over month increase in May was 1.1 percent, declining to 0.8 percent in June. FHFA showed a pickup in the appreciation rate month-over-month and annually in both June and July while CoreLogic showed a 0.3 increase in the annual appreciation rate in July....(read more)
After a spectacular run for new home sales in July, it was anticipated that August activity would be considerably more modest. While sales did retrench from the post-crash highs reached the previous month (which improved even further when revised), the August numbers still came in above analysts' estimates
The Census Bureau and the Department of Housing and Urban Development estimates that August sales of newly constructed single-family homes were at a seasonally adjusted annual rate of 609,000, a 7.6 percent drop from July when the rate was 659,000 units, a number originally reported at 654,000. The August sales rate was 20.6 percent higher than that of a year earlier, 505,000....(read more)
Mortgage Rates continued steadily lower today, adding to a string of improvements that brings them to their best levels in more than 2 weeks. Rates have now re-entered the narrow "post-Brexit" range that began shortly after the UK's vote to leave the European Union sent rates plunging toward all-time lows.
Our current position is precarious in the bigger picture. Market movements (specifically, bond markets) underlie mortgage rate movement. When it comes to market movements a narrow range like that seen in the wake of Brexit is typically followed by a more convicted move in one direction or the other. The direction tends to be that of the first major break of the range. Because the first major break was toward higher rates, we could say that markets are "breaking the rules" if rates now attempt to reenter the range and move lower....(read more)
Refinancing jumped to 43 percent of all loans originated in August, a 6 percentage point higher share than in July. Ellie Mae's Origination Insight Report says this takes the refi share back to a level last seen in March.
The share of all loans closed during the month with FHA backing slipped three percentage points to 20 percent with conventional financing increasing by that amount to a 68 percent share. The VA share was unchanged from the previous month at 9 percent. The mix of conventional loans shifted to reflect the surge in refinancing. Those loans rose from 47 percent of all conventional loans in July to 54 percent....(read more)
Mortgage Rates made more substantial gains today, after financial markets had more time to react to yesterday's announcement from the Federal Reserve. Although the Fed held its policy rate steady, the bigger story was a sharp downgrade in the longer term rate outlook. In short, the Fed sees interest rates remaining "lower for longer." They increasingly confirm this stance with their updated forecasts.
Although mortgage rates don't directly follow the Fed Funds rate, they are sensitive to changes in the expected path of the Fed's rate. With the Fed downgrading its rate hike expectations, mortgage rates have fallen. We likely would have seen more of a move yesterday, but with the Fed announcement happening in the afternoon, it doesn't leave as much time for lenders to react. Today's gains are partly due to those lenders getting "caught up," but there has been further improvement in financial markets as well....(read more)
Mortgage prepayments, generally a good indicator of refinance activity, skyrocketed in August. According to Black Knight Financial Services "first look" at its August mortgage data, the Single Month Mortality (SMM) or prepayment rate, fueled by post-Brexit interest rates, rose by 32 percent from July to hit a rate of 1.67 of all outstanding mortgages. It was the highest SMM rate in more than three years.
After spiking in July, delinquencies fully recovered in August. The rate of 30-day or more delinquencies was down 6.04 percent month-over-month and 11.41 percent on an annual basis to 4.24 percent. There were 2.15 million mortgages past due at the end of the month, a decline of 135,000. Serious delinquencies, loans 90 days or more past due but not yet in foreclosure, accounted for 669,000 of the total, a decline of 26,000 from July and 156,000 from the previous August....(read more)