Category: Mortgage News Daily

Posted To: MND NewsWireThe share of closed loans originated for home purchase continues to inch higher. Ellie Mae, in its September Origination Insight Report , says that share jumped from 68 percent in August to 71 percent . The upward trend in purchasing was most pronounced for FHA loans where the share rose 5 percentage points to 83 percent. For Conventional loans the share moved to 69 percent from 66 percent while there was only a 1-point increase in the VA share, to 73 percent. The distribution of loans did shift slightly for the first time in months. The VA and FHA shares of closed loans remained at 10 and 20 percent respectively but the Conventional shared dipped by 1 point to 65 percent. The share of adjustable rate mortgages (ARMS) increased to 7.2 percent from 6.6 percent in August. “We see refinances remain…(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 NewsWireFannie Mae’s Economic and Strategic Research (ESR) group is still expecting that economic growth will “likely” be solid in the third quarter, but they are otherwise hedging their bets. In their October Outlook, the economists said the lower job growth in September does not alter their view that the labor market is strong, but GDP growth has probably slowed from its second quarter pace, partly reflecting a deceleration of product investment and consumer spending. The surge of soybean exports that tried to get ahead of tariffs has subsided and with a strengthening dollar, the trade deficit has probably widened, and residential fixed investment is probably also down, extending that decline into a third straight quarter. Real estate sales commissions are part of that calculation and home sales…(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 CommentaryWe’ve talked a bit (in this commentary and in the live chat on MBS Live ) about the similarities between the October sell-off and one seen in April/May 2018. Both took yields to what were, at the time, the highest yields in years. Both examples have an initial spike followed by several weeks of narrower trading with a trend-line of “higher lows” being the most noticeable feature during those weeks. As you can see in the following chart, that’s the phase that we’re currently in (those “weeks of narrower trading with a trend-line of higher lows”). If October ends up like April/May, the there’s another spike left to come. The lines along the bottom of the chart are fast and slow stochastics–momentum indicators. The move in May 2018–where both are heading lower…(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 PressEveryone, and their brother, knows that the costs for builders to build a home are increasing. Politics aside, it turns out that the tariff changes are indeed impacting the cost of remodeling and building, and NAHB released a list of products affected by tariffs, including nails. Did you know that, per a Freddie Mac poll, 78% of Americans now say that renting is more affordable than owning? Higher rates and home prices are the obvious factors although in some areas wage growth has overtaken house price appreciation. New rental supply, on the other hand, has hit a three-decade high. Appraisal and valuation news In 2017, more than six million homes were sold in the U.S. and there were more than two million licensed real estate agents. By contrast, there were only about 80,000 appraisers. The…(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 NewsWireExisting home sales slipped in September, following a month in which sales were almost totally flat. The National Association of Realtors® (NAR) said that closed transactions for existing single family homes, townhouses, condos, and cooperative apartments was at a seasonally adjusted rate of 5.15 million in September. This was a 3.4 percent decline from both the July and August rate, both of which came in at 5.34 million units. The last month in which existing home sales posted a month-over-month gain was in March. Sales are now down 4.1 percent year-over-year from the September 2017 rate of 5.37 million. Analysts polled by Econoday, after overshooting the mark for five straight existing home sales reports, lowered the bar for September. Despite this, the NAR report missed even the lowest…(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 failed to extend yesterday’s modest improvement, moving modestly higher by the end of the day. This takes the average lender very close to the long-term highs seen on October 5th. Indeed, prospective borrowers shouldn’t be surprised to see the highest rates since early 2011. In and of itself, today wasn’t too dramatic. We were already fairly close to these highs yesterday and, in general, have been holding in a fairly sideways pattern nearby for most of the month. As has been the case for more than 2 years, we are in a rising rate environment, and there’s no compelling reason for an immediate change. That said, the higher rates go, the harder it will be for them to continue moving higher. Additionally, when rates are historically high, we tend to see more “false starts” that…(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 NewsWireEvidence is growing that the housing market is cooling, and Zillow is adding to the pile of proof. However, its contribution points more to a slowdown in the rental market than breaking any news about housing prices. The company says that annual rent growth has now slowed nationally for eight straight months and turned negative on an annual basis last month for the first time since July 2012. The annual rate of growth in September was -0.2 percent, not only a negative but far from the peak rate of appreciation, 6.6 percent, in July 2015. Still, monthly rent is hardly pocket change. The national median after that 0.2 percent or $36.00 decline, was $1,440. Rents were lower in 19 of the country’s 35 largest housing markets and were unchanged in three more. The largest decline , 2.7 percent, was…(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 recovered most of yesterday’s losses today, following turmoil in European financial markets. What does Europe have to do with rates in the US? A lot, actually. In fact, Europe deserves credit for most of the glacial move toward lower rates seen from early 2014 through mid-2016, and was a key ingredient of the low rate environment in 2011-2012. More recently, Europe has been heading in a more American direction when it comes to monetary policy, and that’s resulted in upward pressure on rates. Most recently, investors are having some doubts about Italy’s willingness to play nice with EU rules. When that happens, investors seek safety in the core of the European bond market. In other words, they buy bonds from Germany and other safe-haven countries. While US bonds aren’t high on…(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 CommentaryBond markets began the day almost perfectly unchanged relative to yesterday’s latest levels. That means the nasty little afternoon selling spree was still priced-in as of this morning. That continued to be the case until the 11am hour. At that point, European markets were beginning a decisive risk-off move heading into the end of their trading day. This was fueled primarily by Italy being put in the hot seat at an EU summit. While that wasn’t the initial aim of the summit, Italy became the focus due to concerns among other EU nations regarding adherence to budget rules. In other words, the other countries were telling mom and dad (EU Commission) “hey! make Italy play fair.” Italy has been throwing a bit of a tantrum saying “I don’t wanna and I’m not gonna!”…(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 CommentaryWhat is a pivot point ? In our primer on the topic, I talk mostly about levels that have repeatedly offered resistance or support to bond yields, but there’s another relevant addition to the definition. Pivot points can also be suggested by a singular bounce at long-term high/low. It’s not necessarily the first bounce that suggests a certain level as a pivot. Rather, it’s when yields return to that level and fail to break on through to the other side. With all of the above in mind, 2018’s previous ceiling at 3.128% (we’ll call it 3.13% ) is shaping up as just such a pivot point. It acted as a floor as long ago as last Thursday, but yields were holding close–something they often do before attempting to break through. Yesterday’s weakness pushed us far enough away from…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.