Mortgage Market News

Strength in the U.S. labor market rebounded in October to the fastest pace of the year, after weak numbers in August and September. The Labor Department reported that Non-farm Payrolls rose by 271,000 last month, which could push the Federal Reserve to raise interest rates in December. The 271,000 was well above the 181,000 expected, while August and September were revised higher by a total of 12,000.
Within the Jobs Report it showed that wage growth accelerated to the fastest year-over-year pace since 2009. The Unemployment Rate fell to 5% from 5.1%, the lowest level since April 2008, before the Great Recession began. Gains were seen in white collar businesses, health care, retailers and restaurants. The solid report signals that the world's largest economy is back on track. The so-called U6 number fell to 9.8%, the first time below 10% since May 2008. The U6 number are those people who can't find work or those with only part-time jobs.
The Mortgage Bankers Association (MBA) reported this week that mortgage credit availability continued to loosen in October, due in part to new conforming loan programs. The Mortgage Credit Availability Index rose 1.5% last month to 128.4, after an increase in September. A spoke person for the MBA said many of the new conforming loan programs were affordable housing programs, which have lower down payment requirements.
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Mortgage Market News

CoreLogic reports that distressed sales, which include real estate owned properties and short sales, made up 9.3% of total home sales in August. That figure is down 2.3% from August 2014 and down 0.4% from July 2015. In addition, the 9.3% share is well below the peak of 32.4% set back at the height of the Great Recession in January 2009. Before the peak, distressed sales were about 2% on average.
Staffing firm Challenger, Gray & Christmas reports that U.S. companies showed overall layoffs fell 14% in October from September, though oil industry cuts jumped to a six-month high. Layoffs totaled 50,504 of which 14,000 of those layoffs were related to the oil industry. In the retail sector, layoff announcements are up 67% from 38,948 in 2014 to 64,983, as of last month. “Despite the surge in job cuts across several sectors, it is hardly time to panic. While falling oil prices are impacting the bottom lines of companies in the energy and industrial goods sectors, they are helping many other employers, such as those in transportation and plastics manufacturing,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Mortgage rates rose in the latest survey ahead of a possible interest hike in December. Freddie Mac reported on Thursday that the average 30-year fixed-rate conventional mortgage ($417,000 or less) rose. Mortgage rates continue to hover just above the all-time lows. To put it into perspective, since 1971, the highest rates were seen in October 1981 (18.45%) with a low (3.35%) seen at the end of 2012.
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Automated Data Processing (ADP) reported on Wednesday that private payrolls rose 182,000 in October versus the 180,000 expected, down from the 190,000 created in September. Economic growth somewhat cooled across the nation and new job creations have been decreasing since August. The lower numbers are due in part to slowing in the energy and manufacturing sector. The report comes ahead of Friday's government Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.
The service sector of the economy received positive news today after the Institute of Supply Management (ISM) reported that its ISM Service Index rose to 59.1 in October, near the highest levels in a decade that it reached in July. The 59.1 was better than the 56.6 expected. Within the report it showed that the new orders and the employment component's both saw positive gains. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates the non-manufacturing sector is generally contracting.
Fed Chair Janet Yellen was on Capitol Hill this morning testifying in front of the House Financial Services Committee on the health of U.S. banks. When asked about future interest rate policy, Ms. Yellen did say that a December interest rate hike is a "live possibility". However, Ms. Yeelen said no decision has been made yet and any hike would be dependent on incoming economic data. Ms. Yellen went on to say that the U.S. economy is performing well and some downside risks have diminished surrounding the global economy.
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Mortgage Market News

Home price gains remained solid in September, due in part to tightening inventories of homes available on the market. CoreLogic reported that home prices, including distressed sales, rose 6.4% in September 2015 compared to September 2014. From August 2015 to September 2015, there was a 0.6% increase. CoreLogic is forecasting a 4.7% increase from September 2015 through September 2016. “The continued growth in home prices is welcome news for many homeowners but more markets are becoming overvalued. In the near term, this trend is likely to continue and pose evaluated risks to the housing economy,” said Anand Nallathambi, president and CEO of CoreLogic.
Government sponsored entity and mortgage finance company Freddie Mac swung to a loss of $475 million in the third quarter of 2015, compared with a profit of $2.08 billion in the same period last year. Freddie Mac said that the loss can be attributed towards fair value losses on derivatives used to hedge the company's interest rate risk. The loss was the first in four years. The company will not be making a dividend payment to the Treasury in December. Freddie Mac and Fannie Mae don't make loans, they buy up mortgages from lenders, wrap them into securities and provide guarantees to make investors whole if the loans default.
After going through rough times during the Great Recession, the auto industry is now on track for record sales in 2015, reported General Motors (GM) today. GM reported that October sales will come in around 18.2 million vehicles on an annualized basis, their highest level since 2001. At the height of the Great Recession, sales fell to 10.4 million per month. "October was a huge month for the industry, smashing expectations and continuing its hot streak," said Bill Fay, Toyota's U.S. general manager.
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Black Knight Financial Services reported on Monday that purchase originations in the second quarter of 2015 were 15% higher than the same quarter in 2014. The data shows that the uptick was driven by high-credit borrowers, or those with a credit score of 700 or above. Early figures show an increase of 11% in the third quarter from a year ago. In addition, 20% of purchase loans originated in the third quarter have gone to borrowers with credit scores below 700.
The October Jobs Report will be released this week on Friday morning where it is expected that U.S. employers added 181,000 new positions last month. The Unemployment Rate is expected to tick higher to 5.2% from 5.1%. The report will be closely watched by traders and investors around the globe to gauge if the world's largest economy can rebound from the low number of jobs created in August and September. From January through July, job growth averaged over 200,000 new jobs per month. October's report will be a key factor in the Federal Reserve's decision to raise its benchmark Federal Funds Interest Rate at its December meeting.
Gas prices at the pump continue to push lower across the nation as the summer driving season ended in September and demand for oil declines. The national average price for a regular gallon of gasoline is at $2.19, down from $2.29 a month ago and down from $2.98 a year ago. Oversupply of oil is also a key factor due to increased oil production here in the states and abroad. Gas prices hit an all time high of $4.11 back in July of 2008.
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Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that its Market Composite Index, a measure of total mortgage application volume, surged by 11.8% in the latest week. The index plunged in the previous week, but rebounded led by a sharp rise in government volume. The refinance index rose 9%, while the purchase index soared by 16%.
The MBA also reported that the average contract interest rate for 30-year fixed rate mortgages with conforming loan balances ($417K or less) decreased to the lowest since May at 3.95%, from 3.99%, with points declining to 0.29 from 0.41. The MBA sees mortgage rates rising in 2016, but they should remain below 5%.
Rental prices for apartments surged in 2014 and there doesn't seem to be a pull back any time soon. Annual rental growth in September saw a 5.2% increase, the highest since July 2011 and the eighth consecutive month with gains at 5% or above. Apartment research firm Axiometrics said, "the eight months the rate has been above 5% is the longest period of strength we have seen. The last growth cycle was only four years, and this cycle is already five years long–with no sign of stopping.”
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Mortgage Market News

Construction on new homes rose in September from August after declines in the two previous months. The Commerce Department reported that September Housing Starts rose 6.5% from August to an annual rate of 1.210 million units, above the 1.150 million expected. The report went on to reveal that single-family starts rose modestly, while there was a 17% increase in multi-family units. However, Building Permits, a sign of future construction, fell 5%.
The Mortgage Bankers Association (MBA) reported on Tuesday that it forecasts that purchase originations should increase by 10% in 2016 from 2015. However, the MBA sees refinance originations decreasing by one-third in the same time period. The MBA is forecasting purchase originations of $978 billion and refinance originations of $331 billion for a total of $1.31 trillion. "We are projecting that home purchase originations will increase in 2016 as the U.S. housing market continues on its path towards more typical levels of turnover based on steadily rising demand and improvements in the supply of homes for sale and under construction," said Michael Fratantoni, MBA's chief economist.
The National Retail Federation released its Holiday Consumer Spending Survey on Tuesday and expects the average spending per consumer this year will be $805.65, up slightly from 2014's $802.45. That figure is the highest in the surveys 14-year history and includes food, gifts, decorations and other items. In addition, online purchases will make up 46% of consumer buying, above 2014's 44.4%. Online retailer Amazon expects to hire 100,000 U.S. workers to handle holiday orders.
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The foreclosure segment of the housing market continued to receive positive news today. Analytics firm CoreLogic reported on Monday that completed foreclosures declined year-over-year from 46,000 in August 2014 to 36,000 in August 2015, a near 21% decrease. Completed foreclosures reflect the total number of homes lost to foreclosure. CoreLogic went on to say that the national foreclosure inventory declined by 25.2% from last year. On a month-over-month basis completed foreclosures were up 0.8% from July to August.
A recent study from LendingTree shows that American consumers are more likely to go out of their way to shop for the lowest gas prices than they are to look for the lowest possible mortgage rate. The study showed that 80% of consumers will drive around town for the cheapest gas prices, but only 14% said they would comparison shop when looking for a loan, whether it be personal, mortgage or auto loan. "Consumers are generally very savvy with their shopping behavior when it comes to day-to-day purchases and material goods. But, once it comes to a major financial investment, we see a collapse of the normally rational pattern of behavior and mentality for saving,” said Andrea Woroch, LendingTree’s consumer savings expert.
The holiday season is just around the corner, but this year the pendulum is swinging the other way when it comes to stores opening on Thanksgiving. In the past few years stores have been looking to cash in on holiday sales earlier and earlier and many went as far as opening on a big family day, Thanksgiving. However, in 2015 more and more stores are now saying they won't be open for the holiday and are recognizing that Thanksgiving is a time for family and friends. And where it may mean lower sales to begin the holidays, there are a few positives. Aside from employees being able to spend time at home on Thanksgiving, the stores that will not open could get a marketing boost by touting its focus on family values over profits. In addition, lower overhead by not staffing stores could offset some of the lost sales. Notables that will not be open include, Nordstrom, Marshalls and Staples along with a host of others.
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Mortgage Market News

The recent market turmoil here in the U.S. coupled with a delayed hike in interest rates by the Federal Reserve have increased the chances of a recession in the world's largest economy. According to a recent survey in early October, the chances that the U.S. will fall into a recession in the next 12 months has jumped to 15%, the highest level since October 2013. The big global concern is China, as its red hot economy continues to cool.
The U.S. Energy Department reported this week that costs to heat your home this winter should be lower than the past two winters. The Department said that those using propane to warm their home will see a savings of $322 and those using heating oil will spend $459 less than last season. The forecast is based on warner weather for most of the country.
Mortgage giant and government sponsored entity Fannie Mae reported this week that its Home Purchase Sentiment Index rose to 83.8 in September. Consumer confidence in the home buying and selling market bounced back from a recent dip, suggesting continued gradual improvement in housing activity. The "Good Time to Sell" indicator rose 13 points in September, most likely due to a strong home price environment. The "Good Time to Buy" component increased 3 points as high rental costs may be encouraging more renters to consider homeownership.
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Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that mortgage application volume soared in the latest week before a key regulation for the industry went into effect on October 3. The MBA's Market Composite Index, a measure of total loan application volume, surged 25.5% in the latest week. The purchase index soared 27%, while the refinance index surged 24%. The MBA went on to report that the 30-year fixed rate mortgage with conforming loan balances ($417,000 or less) fell to 3.99% from 4.08%, with points declining to 0.25 from 0.35.
Gas prices at the pumps continue to edge lower following the end of the summer driving season. Less demand and low oil prices are a few reasons behind the decline. The national average price for a regular gallon of gasoline is at $2.29, down from $2.39 a month and below the $3.27 recorded a year ago. Prices have moved lower 43 of the past 49 days on ample gasoline supplies. The national average price tends to move lower during the autumn and winter months due to seasonal declines in both driving and gasoline demand, and pump prices have fallen during the month of October for three years in a row.
Flu season is upon us and this year's flu shot is expected to be more effective than last season's. The season generally begins in October and continues through May. It is the time of year when you see more colleagues at work calling in sick and more children staying home from school. Doctors are advising to get your shot early, for it typically takes a few weeks for the body to build up immunity
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Mortgage Market News

Home prices, including distressed sales, rose 6.9% in August 2015 from August 2014, due in part to higher demand along with constrained supplies, as reported by analytics firm CoreLogic. In addition, an improving job market, an uptick in wage growth and historically low mortgage rates are strengthening home sales and home price gains. July to August saw a 1.2% gain. CoreLogic forecasts that prices will rise 4.3% from August 2015 to August 2016.
The Mortgage Bankers Association (MBA) reported on Tuesday that mortgage credit availability increased marginally in September from August, due in part to Freddie Mac's affordable lending programs. The MBA's Mortgage Credit Availability Index (MCAI) gained 0.3% last month to 126.5. This comes after an uptick in August, after recovering in July, following a stall-out in June. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.
"It's The Most Wonderful Time of the Year!" That popular holiday song by Andy Williams is a favorite of retailers across the nation as they usually make a big chunk of annual sales during the holiday shopping season, which starts around Thanksgiving and ends at the end of December. Due to an improving labor market, lower gas prices and an increase in home prices, holiday sales are expected to rise 4% this year. However, the increase this season may be smaller than last year as personal income growth was flat in the first quarter of this year.
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Mortgage Market News

Black Knight Financial Services reported on Monday that cash -evels seen in 2005. Despite the big drop off in refinancing, Black Knight said that "borrowers have been capitalizing on the increased equity available to them." Black Knight went on to say that low mortgage rates have also been a factor in refinancing activity.
The Institute for Supply Management (ISM) said on Monday that the service sector of the U.S. economy expanded at a slower pace than expected in September, which be partly due to slowing economies overseas. The ISM Service Index (non-manufacturing) fell to 56.9 in September, down from the 59 recorded in August and below the 58 expected. A reading above 50% indicates the non-manufacturing sector of the economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting. The report covers restaurants, bars, builders, bankers, hotels and other service providers.
On the lighter side, U.S. consumers are expected to rack up nearly $7 billion in sales this coming Halloween. The National Retail Federation reports that consumers are expected to spend on goods ranging from ghosts to goblins to Batman and Superman along with decorations and candy. However, spending is expected to be lower with average spending coming out to $74.34 a person, down from $77.52 last year. Many consumers are expected to spend at discount stores, while 17% of Americans say they will purchase their Halloween paraphernalia online.
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Mortgage Market News

The number of U.S. workers being fired across the nation remained near 10-year lows in the latest weekly survey as the labor markets continue to improve. The Labor Department reported that Weekly Initial Jobless Claims rose by 10,000 in the latest week to 277,000, above the 270,000 expected. Domestic demand for goods and services remain solid, which is one of the main reasons employers are retaining staff.
Manufacturing activity in the U.S. edged lower in September, though still expanding at a modest pace. Lower growth in the sector coupled with a stronger dollar and weak overseas demand are a few of the culprits behind the move lower. The Institute for Supply Management reported that its ISM Index fell to 50.2 in September, down from the 51.1 recorded in August and just below the 50.6 expected. Within the report it showed that the employment component also declined. Readings above 50 signal expansion, below 50, contraction.
The Bureau of Labor Statistics will report Non-farm Payrolls this Friday morning at 8:30 a.m. ET, where it is expected that employers added 205K jobs in September, after the 173K created in August. The Unemployment Rate is expected to remain at 5.1%. This month's report could be a key metric in the Fed's decision to move on interest rates either in October or December and it will be closely watched by investors around the globe.
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Mortgage Market News

Home prices continued to rise in July due to the ongoing strength in the U.S. economy. The Case Shiller 20-city Index showed a 5% gain year-over-year, which was in line with expectations. The index has risen at a 4% or higher rate since September 2012. From June to July, prices rose 0.6%. “Prices of existing homes and housing overall are seeing strong growth and contributing to recent solid growth for the economy,” said spokesperson David Blitzer.
Consumers across the U.S. felt a bit more optimistic about the economy in September. The Conference Board reported that its Consumer Confidence Index rose to 103.0 in September, well above the 96.0 expected and up from 101.5 in August. Consumer appraisals of current conditions were more positive in September. Labor market conditions were mixed as those feeling that jobs are plentiful increased, while the feeling that "jobs are hard to get" also increased.
Analytics firm CoreLogic reported on Tuesday that cash sales made up 31% of total home sales in June, down from 34% in June 2014. The year-over-year decrease has taken place each month since January 2013. Back in January 2011, cash sales peaked at nearly 47% of total sales across the nation, while before the housing crisis in late 2007, cash sales were 25%.
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Inflation remained tame at the consumer level as evidenced by the Core Personal Consumption Expenditure (PCE). The Core PCE rose by 0.1% in August from July, due in part to falling gas prices. Meanwhile, year-over-year Core PCE grew by 1.3%, which is well below the Federal Reserve's target level of 2%. Low inflation levels could keep the Federal Reserve from raising interest rates this year and they could hold off a hike until next year.
Americans opened their wallets in August on goods ranging from back-to-school items to new autos, signaling the U.S. economy continues to grow. The Commerce Department reported Monday that Personal Spending rose 0.4% last month, above the 0.3% expected. In addition, Personal Incomes rose 0.3%, just below the 0.4% anticipated and have been steadily rising since April. Since spending outpaced incomes, the personal savings rate ticked down to 4.6% from 4.7%.
Over in the housing markets, Pending Home Sales in August unexpectedly declined by 1.4% as rising home prices keep buyers on the fence. The National Association of REALTORS® (NAR) said that despite the weak reading, sales are still up 6.1% from a year ago. The biggest decline was seen in the Northeast falling by 5.6%, the Midwest saw a 0.4% decrease, the South saw sales fall 2.2%, while the West registered a 1.8% gain. Pending Home Sales measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes.
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The Commerce Department reported Thursday that single-family home sales surged in August, while July’s numbers were also revised higher, signaling continued strength in the U.S. housing market. New Home Sales in August rose 5.7% from July to the highest rate since 2008 and are up nearly 22% since August 2014. Expectations were calling for 515,000 units in August. In addition, July’s numbers were revised to 522,000 from 507,000. The New Home Sales report shows the number of newly constructed homes with a committed sale during the month.
Dow component and heavy equipment maker Caterpillar reported Thursday that it will be cutting up to 5,000 jobs by the end of 2016 for cost cutting measures due to tough conditions in the energy sector. The company went on to say that layoffs could total 10,000 through 2018, while revenues could decline in 2016 for a record fourth straight year. In addition, Caterpillar will also offer a voluntary retirement enhancement program this year for qualifying workers.
RealtyTrac released its August 2015 Home Sales Report on Thursday revealing that single-family home and condo sales through August were on pace for an eight-year high nationwide and in 110 out of 204 (54%) metropolitan statistical areas with sufficient sales data. A total of near 2 million single-family homes and condos sold through August in 2015, up 5.4% from the beginning of the year, to the highest total for the first eight months of the year since 2007.
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A recent study showed that the number of homes losing value monthly tripled in the past year. The report went on to say that a majority of the homes are still gaining value, however, the national trend is lower. Weiss Residential Research CEO Allan Weiss said, “In this environment buyers and investors should be careful to avoid buying properties that are losing value by reviewing metro and zip code maps on Owners.com that show hyper-local trends in changing value."
Mortgage application volume rose in the latest week as rates continue to hover just above historical lows. The Mortgage Bankers Association (MBA) attributed the rise to significant rate volatility last week surrounding the Federal Open Market Committee meeting as rates edged lower. The MBA's Market Composite Index, a measure of total loan application volume, rose nearly 14%, while the refinance index surged nearly 18% and the purchase index saw a 9% increase.
The recent problems at Volkswagen surrounding the German car company's attempt to cheat on federal emission standards has cast a dark cloud over the entire car making industry across the globe. The National Highway Traffic Safety Administration now says it will question everything when it comes to self-certified testing at auto makers. As the lawsuits mount up at Volkswagen, most of the major companies have also endured harsh penalties. General Motors agreed to a $900 million settlement over faulty ignition switches linked to over 100 deaths, Fiat Chrysler coughed up $105 million for failing to live up to safety regulations, while Toyota paid a $1.2 billion fine to settle a criminal investigation.
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How to save $3,000, one five at a time | Marketplace.org

How to save $3,000, one five at a time | Marketplace.org
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Mortgage Market News

Housing news continues to stream in with mixed results as the sector deals with tightening inventories and rising prices. The Federal Housing Finance Agency reported on Tuesday that home prices were up 0.6% in July from June. In the year ended in July, prices were up nearly 6%. The survey is based on home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. The data comes after lower than expected results from Existing and New Home Sales in the past week. The index is 1.1% below its March 2007 peak and is roughly the same as the November 2006 index level.
A recent Harvard University study revealed that renters will continue to struggle for the next decade as an estimated 11% more households will fork over at least half of their incomes in rent in 2025. The study said that renters who pay more than half of their earnings in rent often need federal subsidies to find affordable places to live. One big factor for the recent uptick in renting was that many lost their homes during the Great Recession along with incomes declining. The report went on to say that if rents continue to grow faster than incomes, the number of households in hardship could rise as much as 25%.
U.S. Stock markets continue their roller coaster ride due to uncertainty surrounding the Federal Reserve's future interest rate hikes. Last week, the Federal Reserve held off from raising its benchmark Fed Funds Rate, which is currently at 0.00% - 0.25%. Markets hate uncertainty, and today's action sees the Dow Jones Industrial Average down well over 200 points. Yesterday, Atlanta Fed President Dennis Lockhart fueled the uncertainty flames when he said a rate hike later this year was still possible and that the Fed, in recent months, has added to the market instability and needs to refine its communication approach.
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The Commerce Department reported on Thursday that Housing Starts fell 3% in August from July to an annual pace of 1.126 million units, below the 1.158 million expected. Within the report it showed that multifamily units fell 3% in August after the 23% decline in July. This comes after multifamily starts were up nearly 40% in June and April. Housing Starts are up 7.5% since August 2014 and remain above a one-million pace for the fifth straight month, signaling that the sector has recovered a big portion of the losses sustained when the housing bubble imploded back in 2008. In addition, Building Permits, a sign of future construction, rose 3.5% to an annual rate of 1.170 million units, above the 1.158 million expected.
The price of renting in the U.S. rose in August for the 58th straight month and are up 3.6% so far this year. Rent prices have been on the rise due to a smaller amount of units available along with an increase in demand. The average rental is lowest in Arkansas at $760, to a high of $2,640 in New York. Just recently, the Census Department reported that home ownership rates fell to 63.4%, a 48-year low.
The Philadelphia Federal Reserve released its monthly manufacturing index showing negative readings on its top line index. The Philly Fed Index fell to negative 6.0 in September after a positive 8.3 reading in August and well below the +6.5 expected. It was the first negative reading since February 2014. Within the report it did show that the employment component rose 5 points to its highest level in five months while new orders showed growth.
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U.S. consumer spending grew in August. Retail sales increased 0.4 percent, excluding auto, gas, building materials and food. This follows July’s 0.6 percent increase and signals continued improvement in the economy. Overall, retail sales rose 0.2 percent. Strong auto sales were neutralized by a drop in sales at service stations which was fueled by lower gas prices.
The number of homes with negative equity also dropped in the second quarter. CoreLogic reported 91 percent of all mortgaged properties now have equity, after 759,000 properties regained equity in the second quarter. The total number of mortgaged residential properties with negative equity is now at 4.4 million, or 8.7 percent of all mortgaged properties, compared to 5.1 million homes, or 10.2 percent in the first quarter. The number of underwater homes has decreased year over year by 1.1 million, or 19.4 percent.
On the other side of the globe, the Shanghai Composite Index dropped for the second day in a row, marking its biggest two-day loss in three weeks. In a paper issued today, World Bank economists warn a Fed rate hike this week could further damage China and other emerging markets.
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U.S. Stocks opened lower this morning as investors await the Fed’s decision this week on whether or not to raise the benchmark Fed Funds Rate for the first time in nine years. While many believe the rate will increase before year’s end, growing skepticism is mounting that an increase will be announced in Thursday’s Monetary Policy Statement. Signs of sustained economic recovery remain mixed both here and abroad.
The Shanghai Composite Index fell 2.7 percent, the most in three weeks. Recent data continues to suggest the Chinese economy is weaker than expected. Lower industrial output as well as the slowest pace of investment since 2000 are among the latest data points.
In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stated it expects demand for its oil to increase 30.31 million barrels per day next year. Despite lower global demand, OPEC cited its strategy to let oil prices fall as a reason for a reduction in global surplus.
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Inflation at the wholesale level showed a mixed picture in August. The Producer Price Index was unchanged versus the -0.1% expected, mainly due to lower oil prices. But the Core Producer Price Index, which strips out food and energy costs, showed a beefy 0.3% rise, hotter than the 0.1% expected. Wholesale or producer inflation has not yet been passed down to the consumer, mainly due to lack of wage growth. If consumers are not being paid more, businesses can’t incrementally charge more for their goods and services.
Consumers were a bit downbeat about the U.S. economy in early September. The September Consumer Sentiment Index fell to 85.7 early this month, below the 91.9 recorded in August and below the 91.5 expected. The Index measures consumer attitudes towards the economy along with feelings on current economic conditions and futures prospects. Americans attitudes on current conditions and futures expectations hit their lowest level since late 2014.
Investment banking firm Goldman Sachs reported this morning that it sees oil prices plunging to near $20 in the next few years as a glut of oil flows through the pipes around the globe, while demand slips. Oil dropped to $44/barrel in current trading, which has pushed the price that we pay at the gas pumps down. The national average price for a regular gallon of gasoline is at $2.36, down from $2.57 a month ago. Most analysts feel that the national average price of gas could hit $2 in the coming months.
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The job market received some good news today as the number of job openings climbed to the highest level in 14 years in July. The Labor Department announced that its JOLTS (Job Openings and Labor Turnover Survey) showed that there were 5.75 million job openings in July coming from highly paid professional and business services to service sector jobs and retail trade. However, the labor market seems unable to fill many of the slots, which could eventually lead to an acceleration in wages, which have been stagnant over the past few years.
The Federal Reserve members will meet next week to discuss monetary policy and the direction of the short term Fed Funds Rate. The U.S. economy has been improving, with the expectations split between whether or not the rise in rates will come next week. However, the chief economist at the World Bank said yesterday that the Federal Reserve should wait until the global economy is on surer footing to avoid panic and turmoil in emerging markets. Early in September, Christine Lagarde from the International Monetary Fund said the Fed should not rush to raise rates this month.
Mortgage rates edged higher last week causing a decline in total mortgage loan application volume, reports the Mortgage Bankers Association (MBA). The MBA's Market Composite Index, a measure of total loan application volume, declined 6.2% in the latest week and comes after a big rise in volume in the previous week. The refinance index fell 10%, while the purchase index fell by 1%, which is 41% higher than the same week last year.
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Analytics firm CoreLogic reported on Tuesday that completed foreclosures were down nearly 25% in July from a year ago, led by job market gains and home price appreciation. Home prices were up 7% from a year ago, while the Unemployment Rate hit 5.1% in August, the lowest in seven years. There were 38,000 completed foreclosures in July, down from the 50,000 completed in July 2014, while foreclosures were down 6.2% compared to June 2015. "As we enter the final months of 2015, the housing markets continues to gather steam buoyed by improving economic conditions and the recent pent up demand for homeownership," said Anand Nallathambi, president and ceo of CoreLogic.
Small business optimism was little changed in August from July, reports the National Federation of Independent Business as the Index rose to 95.9 from 95.4. The slight increase was paced by job openings and earnings trends, as both components were up in August from July. A spokesperson said the small businesses were not influenced by the volatility in the Stocks markets, though the surveys were mostly done right before the gyrations sparked by slowing economic conditions in China.
A recent survey of mortgage lenders revealed that 2016 is expected to be a seller's market in housing, while a large portion feel that the market could cope with a possible interest rate hike this fall. Mortgage bankers are also looking ahead to 2016 for new innovations in banks' menus of mortgage products, continued home price gains along with lowering acceptable down payments amounts by 10%.
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Mortgage Market News

The first of two key employment reports was released on Wednesday showing that private employers added fewer jobs than expected in August. ADP reported that private employers added 190,000 workers last month, below the 201,000 expected, while July was revised lower to 177,000 from 185,000. The report revealed that small businesses added 85,000 jobs, midsize, 66,000, and large companies, 40,000. Though below expectations, job growth has been steady and will be a key deciding factor for the Federal Reserve's decision on future interest rate hikes.
Worker productivity surged in the second quarter of 2015 and rose at the fastest pace since late 2013, though it has been running below more normal levels for the past year. Productivity rose by 3.3% in the second reading for the second quarter, above the 1.3% that was registered from the first reading and above the 2.8% expected. Within the report it showed that labor costs fell 1.4%, which signals that wages are not increasing, despite the fact that the Unemployment Rate has been declining.
Mortgage application volume soared in the latest week as home loan rates remained at their lowest level since late April. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 11.3% in the latest week. In addition, the refinance index soared 17%, while the purchase index was up 4%.
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Mortgage Market News

This week's August Jobs Report could turn out to be one of the most highly anticipated data points this year by both investors and the Federal Reserve.
 
The Jobs Report could be a key deciding factor in the Fed's decision to raise rates in September or hold off until a later date.
 
A strong Jobs Report, coupled with the robust Gross Domestic Product numbers last week, could signal the time is right for a rate hike. On the other hand, a weak Jobs Report would signal it's time to wait.
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Mortgage Market News

Investors around the globe will be eagerly awaiting the August Jobs Report, which is due to be released this Friday, September 4, at 9:30 a.m. ET. It is expected that employers added 217,000 new jobs during the month, down from the February high of 266,000. The Unemployment Rate is expected to fall to 5.2%, which would be the lowest level since April 2008. The jobs numbers will be one of the key deciding factors in the Federal Reserve's decision as to whether or not to raise the Fed Funds Rate, the country's benchmark interest rate,.in September,
The first of three key readings in the manufacturing sector was reported today showing that business activity in the Midwest region declined marginally in August, but still managed to show expansion. The Chicago PMI Index came in at 54.4, just shy of the 54.7 expected and down from the 54.7 recorded in July. Readings over 50 indicate expansion, below 50, contraction. The national ISM Manufacturing Index will be released on Tuesday.
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Mortgage Market News

Economic growth in the U.S. surged in the second quarter led by rising business investments and consumer spending. The Bureau of Economic Analysis reported that the second reading for second quarter Gross Domestic Product (GDP) rose by 3.7%, above the first reading of 2.3% and well above the anemic 0.6% recorded in the first quarter. GDP measures the value of all goods produced in the U.S. The consumer spending component of GDP rose by 3.1% compared to the 1.8% registered in the first quarter.
The National Association of REALTORS® (NAR) reported on Thursday that July Pending Home Sales were mostly unchanged, but did see a modest rise for the sixth time in seven months. Pending Home Sales rose by 0.5% versus the 1% expected and the index has increased year-over-year for 11 consecutive months. Lawrence Yun, NAR chief economist, says the housing market began the second half of 2015 on a positive note, with pending sales slightly rising in July.
Mortgage rates edged lower this week led by turmoil in the Chinese Stock markets. The 30-year conforming fixed-rate mortgage fell.
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Mortgage Market News

The Mortgage Bankers Association (MBA) reported on Wednesday that a recent study showed that housing demand will surge over the next ten years. The MBA feels that between 13.9 and 15.9 million households will be formed by 2023, making the next 10 years one of the strongest in housing in U.S. history. The MBA went on to say that the housing demand will be driven by Hispanics, Baby Boomers and Millennials.
Online real estate company Zillow reported on Wednesday that it sees the housing market slowing down a bit as home prices saw their first negative monthly change since the recovery four years ago. Zillow said that home prices declined 0.1% in July, falling to $179,900. On an annual basis, prices rose 3.0% from July 2014 to July 2015, down from 3.4% in the year ended in June. Of the 517 metro cities covered by Zillow, 204 saw a slowdown in prices and were back to more normal levels of appreciation.
With oil prices continuing to decline in world markets due to slowing demand and a surge in supply, prices at the gas pumps are falling. The national average price for a regular gallon of gasoline is at $2.55, down from $2.72 a month ago. Recently, gas prices have been slow to push lower with the big drop in oil and this is due to outages at several major refineries. Gas analyst Tom Kloza from the Oil Price Information Service sees prices below $2 per gallon by Thanksgiving. Mr. Kloza says that the summer driving season ends this month and with refineries able to refine oil into gas at less expensive prices for its winter blend, prices will begin declining.
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Mortgage Market News

Housing news was abundant today showing positive gains for the sector. The Case Shiller 20-city Index rose 5% in the year ended in June, which was near expectations and matched the May reading. On a month-over-month basis, the index was down 0.1%. The big gains were seen in Denver (10.2%), San Francisco (9.5%) and Dallas (8.2%). The component that covers the entire nation was up 4.5% in the past 12 month.
The Commerce Department reported on Tuesday that New Home Sales in July rose 5.4% from June to an annual rate of 507,000 units. The increase of 5.4% comes after a 7.7% decline from May to June. Sales were up nearly 29% from July 2014, while the median price of a new home rose 2% from a year ago to $285,900. On the supply side, the inventory of New Homes for sale was up almost 2% to 218,000, the highest level since March 2010, though still less than half below of what it was at the height of the housing boom.
Consumer across the nation felt confident in August over the current state of the U.S. economy, which was fueled by an improving labor market. The Conference Board reported that its Consumer Confidence Index rose to 101.5 in August, the best reading since January and well above the 93.0 expected. In addition, it was the second highest reading since the Great Recession began in late 2007. “Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the labor market," said Lynn Franco, Director of economic indicators at the Conference Board.
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Mortgage Market News

The National Association of REALTORS® (NAR) reported that Existing Home Sales in July were up 2% from June to an annual rate of 5.59 million units, the highest pace since February 2007. The 5.59 million was above the 5.42 million expected. Since July 2014, sales are up 10%. A spokesperson from the NAR said that tight inventories are driving prices up and that a more robust housing market could provide further support for the U.S. economy.
The Federal Reserve released the minutes from its July 29 meeting on Wednesday with a majority of the members saying the time is coming for interest rates to rise. "Most judged that the conditions for policy firming had not yet been achieved, but noted that conditions were approaching that point." Many analysts have been pointing towards a rate hike in September, but after the minutes were released, rates could rise later in the year and not next month.
Oil prices continue to edge lower this week, due to an over supply of oil around the globe. The price of West Texas Intermediate oil has fallen to $41/barrel, a six and a half year low. The drop in oil has lowered the price of gas at the pumps for most of the country. In parts of New Jersey, the price for a regular gallon of gasoline is at $2.07. The current national average price for a regular gallon of gas is at $2.66. Many gas analysts see the price of gas moving lower to a national average of $2 sometime in late fall.
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Mortagge Market News

The National Association of REALTORS® (NAR) reported that Existing Home Sales in July were up 2% from June to an annual rate of 5.59 million units, the highest pace since February 2007. The 5.59 million was above the 5.42 million expected. Since July 2014, sales are up 10%. A spokesperson from the NAR said that tight inventories are driving prices up and that a more robust housing market could provide further support for the U.S. economy.
The Federal Reserve released the minutes from its July 29 meeting on Wednesday with a majority of the members saying the time is coming for interest rates to rise. "Most judged that the conditions for policy firming had not yet been achieved, but noted that conditions were approaching that point." Many analysts have been pointing towards a rate hike in September, but after the minutes were released, rates could rise later in the year and not next month.
Oil prices continue to edge lower this week, due to an over supply of oil around the globe. The price of West Texas Intermediate oil has fallen to $41/barrel, a six and a half year low. The drop in oil has lowered the price of gas at the pumps for most of the country. In parts of New Jersey, the price for a regular gallon of gasoline is at $2.07. The current national average price for a regular gallon of gas is at $2.66. Many gas analysts see the price of gas moving lower to a national average of $2 sometime in late fall.
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Mortgage Market News

Inflation at the consumer level remained tame in July as rising housing costs were offset by by little changes in most other consumer goods. The Bureau of Labor Statistics reported on Wednesday that the inflation reading Consumer Price Index rose 0.1% in July, below the 0.2% expected and down from the 0.3% registered in June. It was the smallest increase in six months. Shelter costs rose 0.4%, the biggest gain in more than eight years, while year-over-year housing costs are up 3.1%, the largest annual increase since 2008.
Mortgage application volume rose in the latest week as interest rates to purchase and refinance remained near historic lows. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of total loan application volume, rose 3.6% in the latest week. Within the numbers it showed that the refinance index was up 7%, while the purchase index gained 0.1%. The MBA also reported that the average contract rate for a 30-year fixed rate mortgage with conforming loan balances ($417,000 or less) decreased to 4.11% with points increasing to 0.37.
Breakfast may be getting more expensive in the coming months as egg prices soar at supermarkets. Due to the worst avian flu outbreak in 30 years there is limited supply which has caused egg prices to spike this year, and prices will continue to rise. The current price for a dozen of eggs are at a range between $1.99 to $4.49 and could hit $6 per dozen by the fall. So don't be surprised by the higher price of a bacon, egg and cheese at your local breakfast spot in the coming months either.
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Mortgage Market News

Job openings across the nation edged lower in June, though current levels still suggest that demand for workers remains robust. The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) revealed that job openings totaled 5.25 million in June, down from the 5.36 million in May. The job openings rate for June 2015 remained at 3.6% for the third month in a row. Job openings have jumped 11% in the past year, a sign that companies feel that demand for goods and services will pick up.
The International Energy Agency reported its monthly data on oil showing that global demand is growing at its fastest pace in five years, as economic growth continues and consumers respond to lower oil prices. However, global oversupply through 2016 as a glut of oil is flowing through pipes around the world's largest producers. Oil prices have fallen below $50 per barrel, due to the oversupply and a strong dollar. As oil moves lower, prices at the pump are expected to move back to near $2 per gallon on average by December.
The recent move by China to devalue their currency has left global Stock markets in a panic feeling that the world's second largest economy is beginning to slow. The fallout here in the U.S. has pushed the closely watched S&P 500 Stock Index into negative territory for the year, after having plunged for two straight days. The U.S. Stock markets have been on a blistering pace higher since hitting multi-year lows back in March of 2009, which was the height of the Great Recession. The index hit 666 on March 9, 2009, and recently hit an all-time closing high of 2,130 back in May.
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Analytics firm CoreLogic reported on Tuesday that there were 43,000 completed foreclosures in June, down nearly 15% from the 50,000 in June 2014. In comparison, before the decline in the housing market in 2007, completed foreclosures were running at 21,000 per month on average from 2000 to 2006. On a month-over-month basis, completed foreclosures were up 4.8%. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. A CoreLogic spokesperson said, "the foreclosure rate has dropped to its lowest level since 2007, supported by a decline in loans made in 2009, gains in employment and higher housing prices."
Small business owners' confidence rebounded in July, after the sharp decline in June. The National Federation of Independent Business's Small Business Optimism Index increased 1.3 points to 95.4. The report revealed that seven of the ten subindexes increased in July. Within the report it showed that the job-creation index gained three points, though there were no indications of a second half liftoff for the amount of jobs created. In addition, the profits trend index decreased further as owners reported lower profits during the month.
The National Association of REALTORS® (NAR) reported that median home prices rose in 93% of 176 metropolitan areas in the second quarter of 2015. The big rise comes after the 85% rise recorded in the first quarter for those 176 metro areas. Insufficient supply was a key factor in the gains. Lawrence Yun, NAR chief economist, says the housing market has shifted into a higher gear in recent months. "Steady rent increases, the slow rise in mortgage rates and stronger local job markets fueled demand throughout most of the country this spring,"
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Mortagge Market News

The big talk on Wall Street continues to be whether or not the Federal Reserve will begin to raise the short term Fed Funds Rate sometime in the fall. Most economists feel that a rate hike will come in September, but Federal Reserve Vice Chairman Stanley Fischer put some doubts on that happening next month. Mr. Fisher said today that the interesting situation is that employment has been rising pretty fast, but inflation continues to run very low. Mr. Fischer does not want to see a raise in rates until we can see inflation return to more normal levels.
After falling for the last seven business days, Stock prices are rallying today on a series of bullish headlines. Warren Buffet's Berkshire Hathaway has agreed to purchase Precision Castparts, a U.S. aircraft parts maker for $37.2B. Additionally, Mr. Buffet made bullish comments on shares of IBM. Overseas, Chinese producer prices fell, conjuring up notions that its central bank may evoke additional stimulus measures. It was also reported that Greek banks may be getting capital infusions in the next few weeks.
With a glut of oil running through global pipelines and demand a bit low, prices have been falling since spring. The price of West Texas Intermediate (WTI) has fallen to $44/barrel from the $62 seen in the beginning of May. The recent decline in oil has sent the national average price for a regular gallon of gasoline at the pumps to $2.59, down from $2.75 in early May. AAA says that gas prices could drop even further if oil continues to fall and we could see another run towards $2 per gallon by the end of the year.
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Mortgage Market News

The highly anticipated July Jobs Report was released with little fanfare on Friday as the numbers came in close to expectations. The Bureau of Labor Statistics reported that July Non-farm Payrolls came in at 215,000, below the 229,000 expected, while the May and June numbers were revised higher by a total of 13,000. Job creation has been steady in 2015, though it has been running below last year's numbers up until this point in time. Within the Jobs Report it showed that the Unemployment Rate remained at 5.3%, while wage growth edged higher.
The report bolsters the case for a September interest rate hike from the Federal Reserve due to an improving economy along with an uptick in wage growth. The Federal Reserve members will meet in mid-September to discuss monetary policy and decide if the economy is healthy enough to usher in the first interest rate hike since 2008. With the Fed Funds Rate at or near zero at the current time, the path of least resistance will be higher. The timing will be in focus … will it be next month, October or December? Most analysts are looking for a September rate hike. The Fed Funds Rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight.
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Mortgage Market News

The labor market suffered a minor setback today after headlines read that private employers added less jobs than was expected in July. Payroll service firm ADP reported that private employers added 185,000 jobs in July, below the 220,000 expected and down from the 229,000 created in June, which was revised lower from 237,000. And though job growth has been strong, it has been moderating since the beginning of the year, noted Mark Zandi, chief economist at Moody's Analytics Inc. The ADP report comes ahead of Friday's government Jobs Report where it is expected that 220,000 were created in both the private and public sector.
The Institute for Supply Management (ISM) reported that its ISM Service Index (non-manufacturing) jumped to 60.3 in July, up from the June reading of 56 and above the 56.3 expected. The 60.3 was the best reading in 10 years. All of the components within the index showed strong gains with new orders and employment the standouts. Most respondents continue to have a positive outlook on business conditions and the overall economy. A reading above 50 indicates the non-manufacturing sector economy is generally expanding; below 50 indicates it is generally contracting.
Home loan rates edged lower in the latest survey from the Mortgage Bankers Association (MBA) falling in the previous week with .034 points on top of the rate. The recent rise in Bond prices was the catalyst behind the push lower in rates, as mortgage rates are generally tied to the ebb and flow of Bond market fluctuations. Within the data it also showed that the MBA's Market Composite Index, a measure of total loan application volume, jumped 4.7%, while the refinance index was up 6%, purchase index gained 3.3%.
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Mortgage Market News

Home prices across the nation jumped in June due to pent-up demand and affordability, along with a more robust labor market. CoreLogic reported on Tuesday that home prices, including distressed sales, rose 6.5% from June 2014 through June 2015, the 40th consecutive month of year-over-year price gains. May to June saw a 1.7% increase. Prices are down 7.4% from the peak seen back in April 2006. Looking ahead, prices are expected to increase 0.5% from June to July and 4.2% from June 2015 to June 2016.
The Federal Reserve released its July 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices yesterday revealing that banks reported having eased lending standards for a number of categories of residential loans over the past three months. Most banks reported no change in standards and terms on consumer loans. Banks also reported stronger demand for home-purchase loans, while they also saw greater demand for auto and credit card loans.
Freddie Mac reported a profit of $4.2 billion in the second quarter of 2015 citing big gains in its loan guarantee and investment portfolio. The $4.2 billion is up a whopping 700% from the first quarter and allows the government controlled mortgage finance company the ability to cut a check for $3.9 billion to the U.S. Treasury. Both Freddie Mac and Fannie Mae were bailed out by the government when the housing bubble burst back in 2008 and have since been required to sweep profits to the Treasury under terms of the bailout.
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Mortgage Market News

Americans across the nation eased up on spending for goods and services in June as wage growth continues to be a bit of a drag on the economy. Personal Spending, which measures money spent on everything from bagels to refrigerators, rose 0.2% in June from May, the smallest monthly gain since February. The 0.2% is well below the 0.7% recorded in May and just below the 0.3% expected.
Inflation continues to run below the Federal Reserve's target levels of near 2% as the economy continues to grow at a slow pace in 2015. Core Personal Consumption Expenditures (PCE), which measures price changes in consumer goods and services, rose by 1.3% year-over-year in the month ended in June. Inflation remains subdued and has remained well below the Federal Reserve's aforementioned target level of 2% for the 38th straight month. Low inflation has been mainly due to a sluggish U.S. economy, lower oil prices along with weak global economies.
Lower oil prices continued to drag on energy related industries in July as reported by the Institute of Supply Management (ISM). The ISM Manufacturing Index for July fell to 52.7 from the June reading of 53.5 and below the 53.7 expected. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. Several of the components within the report declined, such as the employment index, which showed that employment levels declined from June, while new orders also decreased.
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Mortgage Market News




Will the new mortgage disclosures delay my closing?

The answer is NO for just about everybody.

When the Know Before You Owe mortgage disclosure rule becomes effective, lenders must give you new, easier-to-use disclosures about your loan three business days before closing. This gives you time to review the terms of the deal before you get to the closing table.


Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing. The new rule allows for ordinary changes that do not alter the basic terms of the deal.

Only THREE changes require a new 3–day review:




  1. The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans.1 A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
  2. A prepayment penalty is added, making it expensive to refinance or sell.
  3. The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.




 

1 Lenders have been required to provide a 3-day review for these changes in APR since 2009.







NO OTHER changes require a new 3–day review:



There has been much misinformation and mistaken commentary around this point. Any other changes in the days leading up to closing do not require a new 3-day review, although the lender will still have to provide an updated disclosure.

For example, the following circumstances do not require a new 3-day review:

  1. Unexpected discoveries on a walk-through such as a broken refrigerator or a missing stove, even if they require seller credits to the buyer.
  2. Most changes to payments made at closing, including the amount of the real estate commission, taxes and utilities proration, and the amount paid into escrow.
  3. Typos found at the closing table.


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U.S. economic growth rebounded in the second quarter of this year, led by a rise in consumer spending along with an increase in exports. The Bureau of Labor Statistics reported that Gross Domestic Product, the total value of goods and services produced in the U.S., rose by 2.3%. This was well above the anemic 0.6% recorded in the first quarter, which was revised from -0.2%. On the negative side, business spending declined during the quarter, led lower by decreased spending on buildings and plants, while inventories also fell. In addition, the report revealed that inflation remained subdued.
The Federal Reserve released its monetary policy statement yesterday leaving interest rates unchanged, which left investors scratching their heads as to the timing of the first rate hike. The statement read that that both the labor market and the housing sector were improving, while inflation continues to run below its long-run objective. There was no hint as to when the first rate hike may take place. The interest rate in question is the short-term Fed Funds Rate, which is the rate banks lend their balances to other banks overnight. The Fed Funds Rate has been at 0.25% since late 2008.
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Mortgage Market News

The Mortgage Bankers Association (MBA) reported today that total mortgage application volume was little changed in the latest week, while mortgage rates ticked lower. The MBA said its Market Composite Index, a measure of total loan application volume, rose 0.8% for the week ended July 24, 2015. The refinance index rose 2%, while the purchase index was unchanged. The MBA went to say that the average contract rate for 30-year fixed rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.17% from 4.23%.
A rise in home prices is beginning to push potential buyers to the sidelines. The National Association of REALTORS® (NAR) reported that Pending Home Sales (signed contracts to purchase existing homes) fell 1.8% in June from May. This was below the +1% expected. The NAR also said limited is constraining sales as "low inventories in many markets reduced choices and pushed prices above some buyers' comfort level."
United Parcel Service (UPS) reported earnings this week; the shipping company is considered by many to be a barometer of the U.S. economy. UPS is the biggest member of the Dow transports, which economists feel to have a good pulse of the economy. UPS said it sees the U.S. economy slowing, which is somewhat contradictory of what Fed Chair Janet Yellen a few weeks ago when she said that she sees the economy strengthening in the second half of 2015. The big reason that shipping companies may have their finger on the pulse of the economy is because they are the middle men between what goods are produced, and for what people consume
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Mortgage Market News

Consumers weren't feeling too confident in July as the weight of the geo-political issues in Greece and the instability in the Chinese Stock markets weighed on their minds. The Conference Board released its July Consumer Confidence Index today, which fell to 90.9, a 10-month low, down from the 101.4 registered in June and below the 100 expected. Consumers were also less optimistic surrounding the labor markets, while business condition optimism declined. The Conference Board is a global, independent business membership and research association working in the public interest.
Home price gains in a selected 20-city index remained solid in May, though the actual numbers fell a bit below what was estimated. The Case Shiller 20-city Home Price Index rose 4.9% from May 2014 through May 2015, though below the 5.6% gain expected. From April to May, prices rose 1.1%. Within the report it revealed that first time homebuyers are still sitting on the sidelines. Without those buyers, there is less activity as existing homeowners aren't seeing the liquidity and demand that supports selling their homes and trading up for a new purchase.
The U.S. Census Bureau reported today that the U.S. homeownership rate fell to 63.4% in the second quarter of 2015 as Americans have moved to rentals after the fallout from the housing bubble burst in 2008. The 63.4% is just below the 63.7% in the first quarter and below the 64.7% from the same period in 2014. Rates peaked at 69.2% at the end of 2004, during the housing boom. In comparison, multifamily dwelling construction surged 55% in June from June of 2014, while in the same period, single-family starts rose 15%.
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Black Knight Financial Services reported today that its Home Price Index in May rose 1.1% from April as the housing sector continues to gradually improve. The current price was pegged at $251,000, which is 5.1% higher than May 2014 and is up 25% from the market bottom. The price peak came in June of 2006 at $268,000. Black Knight tracks prices as of their transaction dates every month from more than 18,500 U.S. zip codes. New York led the gains in May with a 1.8% appreciation month-over-month.
Oil prices continue to edge lower due to an uptick in supplies and lower demand around the globe. The price of West Texas Intermediate fell to $47.20 a barrel on Monday morning, down from $62 in late June. The decline in oil prices has led gas prices at the pump lower in the last month, after having increased from the early 2015 lows. The national average price for a regular gallon of gasoline fell to $2.71, down six cents in the past month. It is forecasted that gas prices will continue to edge lower as summer gives way to fall.
U.S. Stock markets begin the week on a lower note after a big decline in the Chinese Stock markets. China's Shanghai Composite fell 8.5% overnight and is down nearly 30% since the June highs. The China market had been up 150% in June before the recent slide, which was deemed to overvalued or in bubble territory. Stock prices here in the U.S. fell last week as the Federal Reserve gears up to begin raising interest this year. This week, Fed members will meet to discuss monetary policy with the meeting centering on as to the timing of rate hikes later this year.
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Mortgage Market News

U.S. housing starts in June rose 9.8 percent to 1.17 million, the second-highest level since November 2007. The demand for apartments fueled the surge, following a 16.9 percent decrease the previous month and a 37.5 percent rise in April. Single-family home starts declined throughout the country, with the largest drop in the Northeast at 27.3 percent. Building permits also reached an eight-year high.
The Consumer Price Index rose 0.3 percent last month after increasing 0.4 percent in May. In the 12 months through June, the Core Consumer Price Index (sans food and energy costs) rose 1.8 percent after May's 1.7 percent increase. This inflation measure is still below the Fed’s target 2 percent. Price increases hit gasoline, rent, recreation, personal care, tobacco, airfare and food (most notably eggs at 18.3 percent — the biggest gain since 1973 due to an egg shortage caused by bird flu).
A Greek tragedy has been averted as the EU approved a bridge loan of 7.16 billion euros ($7.76 billion) for Greece. The loan saves Greece from defaulting on payments due to the European Central Bank and International Monetary Fund. It further buys time as terms of a third bailout are finalized.
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Investors seem to be putting positive stock in Greece’s bailout proposals. All signs this morning point to trading on the uptick. Standard & Poor’s 500 Index climbed 1 percent to 2,072.62 at 9:32 a.m. in New York, after closing yesterday down 1.2 percent this week. Dow kicked off with a 200-point rally led by Visa and JP Morgan. NASDAQ is up too. While the week could end on a positive note after wild swings, news headlines on the weekend could usher in an exciting Monday.
U.S. wholesale inventories rose at their fastest pace in six months, according to today’s release from the Commerce Department. Wholesale inventories increased 0.8 percent from a month earlier, more than forecast. Petroleum products, computer equipment and drugs saw the biggest gains. Inventories are a key component of gross domestic product changes.
Yesterday, the American Bankers Association released new data pointing to a healing housing market. Fewer Americans are falling behind on their home-equity loans. In fact, delinquency rates on fixed-term home equity loans fell to 3.12% in the first quarter, the lowest since 2008. The delinquency rate on home-equity lines of credit declined to 1.42% from 1.48% in the fourth quarter.
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Fannie Mae released its June 2015 National Housing Survey this week stating that consumer attitudes on housing may signal a healthier purchase market ahead. The survey said that those who believe now is a good time to sell a home reached a new survey high as the mark crossed above the 50% threshold for the first time in the survey's history. The positive results are due in part to an improving job market and income growth.
The International Monetary Fund (IMF) for the second time this year has warned the U.S. Federal Reserve to hold off on any potential interest rate hikes until 2016. The IMF cites the Greek saga, the slowing Chinese economy, the continued strength of the U.S. dollar, as well as still-depressed demand for housing despite a recovery. In addition, slower growth around the globe is another key factor to hold off on rate hikes.
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Black Knight Financial Services reported on Monday that between traditional and HARP programs, 6.5 million Americans could likely both qualify and benefit from refinancing in the coming months. The current refinance opportunities could result in savings of up to $500 each month at today's rates. Black Knight said that three million borrowers could save at least $200 per month. However, if rates go up a half percentage point, 2.6 million people will fall out of that refinanceable population.
The Institute for Supply Management released its ISM Service Index revealing that the sector remained steady in June as the economy continues to modestly improve. The ISM Index rose to 56.0 in June, up from the 55.7 recorded in May, though just below the 56.3 expected. Most of the components within the report saw gains, with the exception of the employment component, which fell to 52.7 from 55.3. In last week's June Jobs Report the numbers said that a large portion of the 223,000 jobs created were through private service companies.
This past holiday weekend drivers saw the lowest prices for gas at the pumps since 2009. The national average price for a regular gallon of gas is at $2.77. AAA spokesman Mark Jenkins said that gas prices peaked for the year in June hitting an average of $2.80. Prices averaged $2.45 in the first half of the year, which is the cheapest average for the first six months since 2009. AAA went on to say that the average price is likely to remain below $3 this year.
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