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Mortgage Rates Barely Budge After Jobs Report

Mortgage rates were mostly unchanged today, though a few lenders were microscopically higher in cost.  That's an uncommon result for the day of the big jobs report release, but in today's case it may be somewhat understandable.  

More often than not, the most important part of the Employment Situation data--at least as far as markets are concerned--is the top line job creation (aka "nonfarm payrolls" or simply, NFP).  The median forecast for today's NFP was 190k and actual job creation fell well short of that at 151k.  Normally, that's all bond/mortgage markets would need to know before moving toward lower rates, but there were caveats.  

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MBA Reports Third Month of Credit Access Declines

Credit available was apparently slightly lower in January than in February, the third straight month that the Mortgage Bankers Associations' (MBA's) measure of that access has declined. The MBA said its Mortgage Credit Availability Index (MCAI) decreased by 0.4 percent to 123.8 in January.  A decline in the index indicates that lending standards are tightening, while increases are indicative of loosening credit.

The Index, which was benchmarked to 100 in March 2012, peaked at a post crisis high of 128.4 in October of last year and have dropped every month since although the December change was attributed largely to technical reasons. 

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Mortgage Rates Hold Lows Ahead of Jobs Data

Mortgage rates held their ground at 8-month lows today.  This time around, it was far less eventful than yesterday's session, which saw lenders changes rates several times throughout the day (and in opposite directions to boot!). Some lenders are in just slightly better shape vs their own rate sheets from yesterday while others are a little higher.  On average, the most prevalently-quoted conventional 30yr fixed quote is unchanged at 3.75% with 3.625% remaining a close runner-up.

The absence of volatility and drama in the realm of mortgage rates is indicative of the general absence of drama in financial markets.

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1 in 3 Homes Still Bought With Cash

The percentage of total home sales transactions that are completed in cash continues to decline on an annual basis as distressed homes become less and less of a market factor.  CoreLogic said on Thursday that 33.9 percent of home sales in October were all cash, a 2.6 percent decrease from a year earlier.  The cash share did increase by 1.4 percentage points from September to October but CoreLogic said that is normal for an uptick in such sales in October due to the seasonality of the market.

Cash sales are especially significant in sales of owned real estate (REO) and accounted for 59.7 percent of those sales in October.  However total REO sales constituted only 7.3 percent of the market.  When cash sales were at their peak in January 2011, accounting for 46.6 percent of home sales, REO played a major market role, providing close to a quarter of the homes that sold.

 

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Freddie Mac: Don’t Count Refinancing out yet

Freddie Mac's economists are expressing concerns about what they see as economic headwinds revealed by some recently released indicators.  In their current edition of Insight and Outlook the company downgraded its full year estimate for 2015 real GDP growth by a tenth of a point to 1.9 percent while calling the current expansion the weakest in postwar history.  They project growth in 2016 and 2017 at 2.5 and 2.3 percent respectively making them the sixth and seventh years of sub-3 percent growth.

The economists base their negative outlook on several factors, global growth, particularly in China; disappointing automotive and retail sales and wage growth, and energy prices.  Their negative outlook, however, does not extend to housing.

 

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Mortgage Rates Hold Long-Term Lows Despite Market Volatility

Mortgage rates had a far more tumultuous day despite ultimately hanging on to the lowest levels in more than 8 months.  Whether you wanted to be happy, sad, excited, or scared, there was something for everyone today.  The bond markets that underlie mortgage rate movement began the day in weaker shape (implying higher rates).  We'll never know if they would have been content to stay there because an important economic report sent bond yields and stock prices screaming lower at 10am.  Lenders who hadn't yet put out their first rate sheets of the day were able to open up at new 8-month lows.  Of the lenders who already had rate sheets out, most ended up publishing mid-day improvements within an hour or two.

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Mortgage Applications Fall On Adjusted Basis

Mortgage application volume during the week ended January 29 was again either disappointing or much improved depending on whether one viewed it on an adjusted verses an unadjusted basis due to the intervention of yet another holiday period. The Mortgage Brokers Association said its Market Composite Index, a measure of loan application volume, was down 2.6 percent on a seasonally adjusted basis during the week ended January 29 compared to a week earlier.  Results for the week ended January 22 had been further adjusted to account for the Martin Luther King holiday.  On an unadjusted based the overall index increased by 11 percent.

The Refinancing Index had a 0.3 percent uptick and the refinancing share of all applications eked out a 0.2 percent gain to 59.2 percent compared to the previous week.  The Purchasing Index declined by 7 percent on a seasonally adjusted basis while it was up 11 percent unadjusted.  The unadjusted index was 17 percent higher than it was during the same week in 2015.

 

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Mortgage Rates Down to New 8-Month Lows

Mortgage rates only paused for a brief moment of reflection yesterday before continuing with 2016's trend of improvement.  Today's gains bring them easily back to new 8-month lows.  Last Friday, that's a designation they shared with a few days in October.  Today's rates don't need need to talk about sharing the trophy until we get all the way back to April 2015.  The average lender is now easily down to conventional 30yr fixed rates of 3.75%.  The stronger lenders have gradually been moving down to 3.625%.

Rates continue taking cues from global financial market turmoil where stocks and oil prices lost quite a bit of ground.

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West Leads Nation with Double Digit Price Increases

Once again a report on home price changes indicates that appreciation has not yet slowed.  CoreLogic issued a report on its Home Price Index for December of Tuesday which indicates a pick-up in monthly increases.

The index shows prices nationwide, including distressed sales, rose 0.8 percent from November to December compared to a 0.5 percent change from October to November. On an annual basis there was a 6.3 percent gain, the same as the November 2014 to November 2015 pace.

"Nationally, home prices have been rising at a 5 to 6 percent annual rate for more than a year," said Dr. Frank Nothaft, chief economist for CoreLogic.

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Mortgage Rates Remain Near Long Term Lows

Mortgage rates were in line with the best levels in 8 months as of last Friday.  Although they moved slightly higher to begin the new week, today is still the 2nd best day in the past 8 months.  Lenders continue quoting conventional 30yr fixed rates of 3.75% for the most part with 3.625% being the next most prevalent rate.  

In general, rates are taking cues from the big picture economic considerations and global financial market turmoil.  Low oil prices and volatile stock markets have been helping.  Most of the more focused economic data has been falling short of its usual potential to move markets.

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