Mortgage Rates were unchanged in many cases today, with a handful of lenders inconsequentially better or worse versus yesterday's latest offerings. Despite moving lower on 4 out of the past 6 days, rates were never able to put meaningful distance between themselves and the highest levels in more than 4 months.
The slow progress was partly a market phenomenon and partly due to lender strategy. Mortgage rates are driven by bond markets--specifically, mortgage-backed-securities (MBS). Bond markets were hesitant to rush back toward lower rates after topping out in mid-October because traders continued to wait for key events for the green light. Now that one of those events (the European Central Bank's official comment on its longer term bond buying plans) is on hold until early December, traders are only more hesitant to make big moves....(read more)
Price gains accelerated in August, rising more year-over-year than they did in July according to data released today by both the Federal Housing Finance Agency (FHFA) and S&P CoreLogic Case-Shiller.
The Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, rose 5.3 percent compared to August 2015. In July the annual gain was 5.0 percent, revised from an original estimate of 5.2 percent. Before seasonal adjustment the National Index posted a month-over-month gain of 0.5 percent (the increase from July to August was 0.7 percent) and an 0.6 percent increase after seasonal adjustment.
The 10-City Composite Index increased 4.3 percent on an annual basis compared to 4.1 percent in July while the 20-City Composite reported a year-over-year gain of 5.1%, up from 5.0% in July. The monthly gains for both composites was 0.4 percent on a non-seasonally adjusted basis and 0.2 percent after adjustment....(read more)
Mortgage Rates bounced slightly higher for the first time in more than a week today, thus remaining in limbo near the highest levels in more than 4 months. On a positive note, recent movements have been small, with no change to the prevailing note rates of 3.5-3.625% on top tier conventional 30yr fixed scenarios. That means the deterioration is seen in the form of modestly higher upfront costs (or lower lender credit, depending the structure of the quote).
In other words, markets haven't moved enough for rates to rise a full 0.125%. Because mortgage rates are typically offered in .125% increments, lenders account for smaller market movement by adjusting the upfront cost/credit. Bottom line, you'd pay just a bit more to get the same rate you were quoted last week. Even then, the change is so small that some lenders didn't even change those upfront costs from Friday's levels....(read more)
Fannie Mae and Freddie Mac each announced what appear to be essentially identical changes in their loan underwriting programs - Fannie calls its new offering "Day 1 Certainty" while Freddie was less poetic, referring simply to new capabilities added to its Loan Advisor Suite.
Fannie Mae President and Chief Executive Officer, Tim Mayopoulos, described Day 1 Certainty today as a way to give lenders "freedom from representations and warranties and greater speed and simplicity when delivering loans to Fannie Mae." He said this will help transform the way lenders do business by moving a paper-based process to an automated one through the company's underwriting software.
We assume there are technical differences in the changes to Fannie Mae's Desktop Underwriter and Collateral Underwriter and Freddie Mac's Loan Advisor, but two of the principal changes outlined their respective press releases cover the following....(read more)
In unusually personal prepared remarks, David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA) told members gathered at the association's Annual Convention and Expo in Boston that he has "been battling an aggressive, but treatable, cancer." He went on to equate the necessity to work with others to accomplish that treatment to the task MBA has to work together to reset the housing agenda.
A home is more than the American Dream, he said. It is at the heart of every community and housing comprises about 18 percent of the gross domestic product, a steady source of hundreds of thousands of jobs, and it critical to the economic success of every single American. However, for the past 8 years the national housing policy has been shaped, not just by a crisis but a collapse....(read more)
Mortgage Rates held steady today, continuing a much-needed break from the move higher that dominated the first 2 weeks of October. While we've only seen modest improvements (or in today's case, a mere absence of deterioration), it's been enough to get the average lender back below last week's best levels. 3.625% remains the most prevalently-quoted convention 30yr fixed rate on top tier scenarios, though there are a few lenders at 3.5%.
In terms of underlying market movement, the past 2 days have been much calmer than they might have been. Expectations for volatility centered on the European Central Bank (ECB), and the risk that it would say something about reducing its bond buying program at yesterday's press conference. A reduction in the program would imply higher rates around the world, and indeed, the associated fears are part of the reason rates have been rising in general. But the ECB abstained from official comment and anecdotally has promised to let us know in early December....(read more)
Deja vu all over again?
Freddie Mac says economic growth is recovering from a weak first half of the year, the labor market is holding steady and Fed watchers are concluding that a rate hike will come in December; worldwide economic growth is weak and appears likely to get worse. The company's economists add, "We've been here before... last year."
The economy continues to sputter along and the housing market continues to be a bright spot although with "less room to run than in the prior few years." Refinance-spurred mortgage activity is starting to slow as rates rise and that will persist into 2017 as the mortgage market becomes more purchase-dominated....(read more)
Housing industry players have decried the absence of first-time homebuyers and the negative impact they have had on the housing recovery. Fannie Mae's Economic and Strategic Research team, in the most recent edition of Housing Insights, says that this absence, which has long been a result of lack of demand due to financial constraints, is now shifting to a supply issue.
As the labor market has improved and wages to recover and even though tight credit may still be an obstacle recent attention has shifted to the lack of available starter homes as an impediment to first-time buyer participation. Fannie Mae's analysts see several issues involved in this shortage....(read more)
Mortgage Rates were lower again today, after the European Central Bank (ECB) avoided sending any scary signals about tapering its asset purchases. Much like the Fed conducted quantitative easing (QE) in the US by buying US-based bonds, the ECB has been buying various European bonds under its own easing program. In both cases, the effects helped bring down rates around the world. There has been some speculation that Europe is getting close to their own version of the Fed's 2013 "taper tantrum" (which refers to the quick move higher in rates in response to the Fed saying it would soon be reducing QE purchases)....(read more)
Refinancing continued to hold its ground during September, rising from 43 percent of all loan originations in August to 45 percent. Ellie Mae's Origination Insight Report for the month noted that the refinancing share rose one or two points for all loan types and made up 56 percent of conventional originations. The share of total originations for each loan type held steady for the month with conventional loans having a 68 percent share, FHA getting 20 percent and VA loans 9 percent.
The average time to close all loans increased to 48 days in September, up from 46 days in August and the longest timeline since January. The time to close a purchase increased to 47 days while the time to close a refinance increased to 50 days, the most since August 2015. Most of the change was attributable to conventional loans; the time to close both refinances and purchase loans increased by three days....(read more)