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Posted To: MND NewsWireBy mid-October the average interest rate for 30-year fixed rate mortgages (which at that point was at 4.85 percent) represented an increase of 85 basis points from the first of the year and 35 basis points just since August. In light of this, Black Knight’s September Mortgage Monitor attempts to measure how many homeowners might still have an incentive to refinance their homes. They estimate that the refinanceable population has been more than cut in half (a 56 percent reduction) since the beginning of 2018 as some 2.2 million people have lost that incentive. This leaves only about 1.86 million homeowners who would be likely to qualify for refinancing and still have a rate-based reason to do so. Black Knight defines the incentive as a transaction that would provide borrowers with at least a…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MBS CommentaryToday, and indeed the week in general was fairly straightforward as far as bond markets were concerned. Today brought a fairly well anticipated jobs report. It came out quite a bit higher than expected. There were no noticeable downsides . And the increasingly important wage growth component rose to its highest year-over-year level since before the recession. No one would be mad at the labor market if it simply decided to level-off around a job count of 125-150k, which would be more than enough to keep the unemployment rate pegged to the floor. The fact that job growth is accelerating is cause for concern in the bond market, and that concern is evident in today’s rate surge. It’s really that simple–nothing to do with “trade optimism” or whatever it is that the average news…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Mortgage Rate WatchMortgage rates had a bad week and an especially bad day following a much stronger-than-expected jobs report. The Employment Situation (the most important piece of labor market data and arguably the most important economic report as far as interest rates are concerned) showed the highest pace of wage growth since before the recession and a surprisingly robust addition of new jobs in October. Strong jobs data is the nemesis of low interest rates and today was no exception. Mortgage rates were already operating fairly close to long-term highs, but today’s move easily took them to new highs. The average lender is now quoting conventional 30yr fixed rates of 5% for relatively ideal scenarios. Those without a big down payment or without perfect credit/income can expect to see even higher rates. Most…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireBoth of the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which remain in government receivership ten years after the housing crisis, posted strong financial results for the third quarter of this year. Freddie Mac reported net income of $2.7 billion and comprehensive income of $2.6 billion while Fannie Mae’s comprehensive and net were both $4.0 billion. Freddie Mac’s results are slightly ahead of those in the second quarter when comprehensive income was $2.4 billion, but down from the $4.6 billion reported in the third quarter of 2017. The company realized $3.3 in net interest income and $728 million in derivative gains. The company said its results reflected continued strong earnings from guarantee fee income , which rose from $169 billion in the third quarter of…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Pipeline PressMany states “gain an hour” Sunday morning by setting clocks back. Robots don’t care what time it is – will they build your next house? Companies like Modular Home Builder or Baltimore’s Blueprint Robotics Inc. are attracting attention. Houses are built on an assembly line, using robots that fire thousands of nails into studs each day without missing. Other machines cut, sand, drill, and insulate. These factories are filling in for a shortage of skilled workers that’s crimped construction of residences across the country. Weather isn’t a factor, houses are constructed off-site for less money, and in a fraction of the time. These aren’t trailer homes, or Sears’ kit homes from the early 1900s. Builders and developers use the modular factories as…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MBS CommentaryThis morning brings the often-important jobs report. Traditionally, the key component has been nonfarm payrolls (NFP), which is just a tally of new jobs created during the past month. NFP is especially important in times of transition (i.e. heading into or out of a recession) as well as in times where markets are expecting labor markets to cool a bit after a strong run. In many ways, recent NFP data has filled that role recently. It’s offered positive surprises with respect to how well the labor market is doing even though analysts wouldn’t be surprised to see jobs data come off the boil. Simply put, it looked like average NFP was clearly declining from 2014 though 2017, but it’s recently moved up and out of that downtrend. That’s had noticeable ill effects on bonds. In addition…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MBS CommentaryToday ended up being somewhat triumphant for bonds. It didn’t begin that way, however. Yields were higher overnight and moved up just a bit more in the first hour and a half of domestic trading. Early economic data was largely ignored. At 9:30am, bonds started improving . Based on the timing, we can assume ETF trading played a key role as investors put on new trading positions for the new month. Stocks were also losing ground heading into 10am and that seemed to have a complimentary effect on bonds. Notably, bonds continued to fare well even as stocks bounced and moved higher by the end of the day. This leaves us with some evidence for a ceiling at 10yr yield levels near 3.16-3.17% and a floor at 3.06% based on the big bounce seen at the beginning of the week. Given that we’re currently…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Mortgage Rate WatchIt’s Thursday! That means it’s time, once again, to set the record straight on today’s actual mortgage rates as opposed to those suggested by almost any other news article on the topic today. Why should you trust me as opposed to a multitude of financial journalists telling you something else? Simply put, they’re relying on Freddie Mac’s weekly mortgage rate survey (which can be unavoidably stale) whereas I’m using a multitude of actual lender rate sheets to derive a highly reliable/accurate average. Those using Freddie’s numbers are relying predominantly on lender quotes from Monday and Tuesday whereas I’ve updated my averages in just the past hour, and for the 2nd time today! Because the Freddie survey is always based largely on Mon/Tue numbers, the higher rates at the beginning of last week…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireConstruction spending in September was largely unchanged from where it was in August. The U.S. Census Bureau said that private and public sector spending during the month was at a seasonally adjusted annual rate of $1.330 trillion, not statistically different from the 1.329.0 billion the previous month. The figure does represent a gain of 7.2 percent from September 2017 spending of $1.240.4 trillion. On a non-seasonally adjusted basis total spending during the month was $119.7 billion, down from $123.3 billion in August. In 2018 through September a total of $982.9 billion has been spent, a 5.5 percent increase over the first nine months of 2017. Privately funded construction in September was at an annual rate of $1.020 trillion, up 0.3 percent from August and 6.1 percent more than in September…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireSingle family home prices increased during the third quarter of 2018 in 93 percent or 166 of the 178 metropolitan areas tracked by the National Association of Realtors ® (NAR). NAR’s quarterly report on existing home sales and metro area prices again faults the low level of moderately priced homes for stifling home sales and continuing to drive prices higher. None-the-less, there was a tiny bit of deceleration noted in the third quarter report. NAR says the national median price for an existing single-family home was $266,900, an increase of 4.8 percent from the third quarter 2017 median of $254,700. This is a 0.1 point smaller rate of increase than in second quarter. The number of metro areas with double digit increases also declined, from 24 in the second quarter to 18 in the third. Lawrence…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.