Mortgage Market News

This year is shaping up to be one of the best years for the U.S. Stock markets. The meteoric rise has due in part to a rebounding economy, a robust housing market and on the heels of the massive stimulus program enacted by the Federal Reserve. The S&P 500 hit yet another record close of 1,842.02 yesterday and is considered a barometer for the U.S. Stock markets.
The 2013 holiday shopping season may not turn out to be a banner year for retailers. Sales of holiday items are estimated to be up 2.3% from 2012, but the gains were achieved by deep discounts. This year saw fewer shopping days with Thanksgiving coming later than usual, along with a pullback in spending by consumers.
In the labor markets, 1.3 million Americans are set to be cutoff from unemployment benefits on Saturday after Congress failed to extend the benefits before leaving for vacation. Another 1.9 million will also lose their checks in mid-2014. Views have been from both sides of the table...the recession has been over for almost four years with others saying the job market is still tight with three applicants for one job.
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Mortgage Market News

The big news this past weekend came on Friday night when incoming Federal Housing Finance Agency Chief Mel Watt said that he will delay the upcoming g-fee hikes that are supposed to begin in March 2014. The higher fees are typically passed on to borrowers in the form of higher interest rates.
Consumer spending rose in November and increased by the most in five months, up 0.5%, fueled by a surge in spending on long lasting durable orders. The number was inline with estimates. Personal incomes were up 0.2%, below the 0.5% expected. The rise in spending pushed the personal savings rate down to 4.2% from 4.5% in October.
The holidays did usher in lower gas prices at the pump falling to the lowest levels this year. The national average for a regular gallon of gasoline is at $3.25, the same as last year. AAA said that prices are lower that they were last week, last month and six months ago.
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Mortgage Market News

The home foreclosure front received some good news this morning as the sector digs out of a big hole left by the Great Recession. CoreLogic reported that completed foreclosures fell by 30% from October 2012 (68,000) to October 2013 (48,000). In addition, 791,000 residential properties returned to positive equity in the third quarter of this year, but nearly 6.4 million residential properties still have negative equity.
Inflation at the consumer level was tame in November, led lower by declining prices at the gas pumps and natural gas, which more than offset gains in electricity and fuel oil. The Consumer Price Index (CPI) was unchanged last month, below the 0.1% expected. The year-over-year headline CPI came in at 1.2% in November, up from the October annual reading of 1.0%.
Over on the housing front, the National Association of Home Builders reported today that its Housing Market Index rose by 4 points to 58, which reflected improvement in current sales conditions, sales expectations and traffic of prospective buyers. The increase was due in part to pent-up demand caused by the October government shutdown. The index is up 11 points since December 2012 and has been above 50 for the past seven months. Any number over 50 indicates that more builders view conditions as good than poor.
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Mortgage Market News

The Mortgage Bankers Association reported today that its Market Composite Index, a measure of loan application volume, increased by 1% in the latest week, after the steep drop in the previous week. The refinance index increased by 2%, while the purchase index saw a 1% increase.
Lawmakers on Capitol Hill reached a bipartisan budget deal last night that will prevent a government shutdown. The two-year deal will most likely pass through both the House and the Senate. There is one big subject left out of the compromise, extending federal unemployment benefits. The current federal program of 73 weeks is set to expire on December 28.
The new buzzword heard in financial circles, Bitcoin. A Bitcoin is a digital or virtual currency that uses peer-to-peer technology to facilitate payments. There are currently about $7 billion of Bitcoins in circulation around the globe. Transactions are verified by the same state-of-art encryption that is used in military applications.
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Mortgage Market News

Fannie Mae announced its November National Housing Survey results yesterday revealing that cautious consumers are stalling housing momentum as Americans remain vigilant about their personal finances and the state of the economy. The share of respondents who say mortgage rates will go up in the next 12 months increased by 2% to 59%.
The National Federation of Independent Businesses reported its small business index today showing a rise to 92.5 in November from 91.6 in October. The survey did reveal two trends - companies are looking to hire more workers, but they aren't interested in adding to current inventories.
The Federal Housing Finance Agency (FHFA) reported yesterday that in an effort to gradually contract the dominance of Fannie Mae and Freddie Mac in the mortgage arena, the FHFA will be raising the guarantee fees or g-fees by 10bp. This will enable Fannie and Freddie to deepen and broaden the risk-sharing with private investors initiated this year. The increase will take place beginning April 1, 2014, for those loans sold for cash, the change will take place on March 1, 2014.
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Mortgage Market News

The government reported today that economic growth in the U.S. for the third quarter grew at a faster pace than what was first reported. Gross Domestic Product (GDP) rose by 3.6% in the second of three readings, led by a large buildup in inventories. GDP measures the output of goods and services produced by labor and property.
Fewer Americans across the nation were seeking first time unemployment benefits in the latest week, as the job markets continue to improve. Weekly Initial Jobless Claims declined by 23,000 to 298,000, the lowest level since the week ended September 7, though the numbers could be skewed by the Thanksgiving holiday. The four week moving average, which irons out seasonal abnormalities, fell by 10,750 down to 322,250. Freddie Mac reported today that the average rate for the 30-year fixed conventional mortgage rose to 4.46% in the latest week. However, to obtain that rate, a potential borrower would have to pay 0.5 in points and fees, a charge that the media usually fails to report.
Outplacement firm Challenger, Gray & Christmas said that planned layoffs at companies across the nation fell marginally by 0.9% from October to November. The retail sector took a big hit in November due to the shutdown of the remaining Blockbuster video stores, along with a sell-off and closure of a store chain in Chicago. Recent cuts have been concentrated in the mortgage lending industry. The positive news was that there has been an almost 21% decline in planned layoffs year-over-year in the month ended in November.
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Mortgage Market News

The Mortgage Bankers Association reported this morning that its Market Composite Index, as measure of total loan application volume, fell by nearly 13% in the latest week. The refinance index declined by 18% while the purchase index fell by 4%. Home loan rates rose during the summer months, easing the demand for home purchase and refinance loans. The numbers could be somewhat skewed by the Thanksgiving holiday.
In the housing sector, the Commerce Department reported that the delayed New Home Sales report for September showed that sales declined by 6.6% to an annual rate of 354,000 and below the 432,000 expected. In October, sales rose by 26% to 444,000 and above the 420,000 expected. Both reports were delayed due to the government shutdown - the November report will be released on December 24.
In job related news, ADP reported that private employers added 215,000 jobs in November, the most in a year, and above the 160,000 that was expected. The October numbers were revised higher to 184,000 from 130,000. The service sector led the way and the gains were broad based. The report comes ahead of the government report, due out Friday morning, where it is expected that there were 188,000 jobs created
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