Mortgage Market News

The Mortgage Bankers Association (MBA) reported today that its Market Composite Index, a measure of total loan application volume, declined by 8.5% in the latest week. The refinance index fell by 11.4%, which now makes up 58% of mortgage applications, lowest since September 2013. The purchase index declined by 3.5% to the lowest level since 1995.
Experts are calling it the greatest buried treasure unearthed in the U.S. after a California couple, while taking their daily walk on their property, recently uncovered a canister containing gold coins from the 19th century. The coins are said to be from 1847 to 1894 with a face value of $28,000, but could fetch more than $10 million in the open market, due to the rarity of the coins.
Despite the harsh weather last month, New Home Sales rose by 9.6% from December to January to an annual rate of 468,000, well above the 400,000 expected. The 468,000 was the best level since July of 2008. The median sales price is at $260,100, while there was a 4.7 months supply of inventory.
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Mortgage Market News

Housing data dominated the economic headlines this morning as the sector tries to replicate the big home price gains seen in 2013. The Case Shiller 20-city Home Price Index rose by 13.4% in December 2013 compared to December 2012. That is slightly lower than the 13.7% year-over-year increase seen from November 2012 to November 2013. A spokesman from Case Shiller said that gains are slowing from month to month, and the strongest part of the recovery in home values may be over.
The Federal Housing Finance Agency (FHFA) reported a year-over-year gain of 7.7% from the fourth quarter of 2012 to the fourth quarter of 2013. Prices were also up 1.2% in the fourth quarter of 2013 and this was the tenth consecutive quarterly increase in the purchase only, seasonally adjusted index. The FHFA said that price appreciation in the fourth quarter was considerable, but more modest than in recent periods.
The Conference Board reported on Tuesday that its February Consumer Confidence Index, fell to 78.1 versus the 80.8 expected, from the 79.4 recorded in January. The Conference Board said that the declines were due in part to concerns over the short-term outlook for business conditions, jobs, and earnings. The Index measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
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Mortgage Market News

The National Association of Realtors (NAR) reported this morning that January Existing Home Sales fell by 5.1% from December to an annual rate of 4.62 million units. The NAR cited prolonged winter weather patterns, tight credit, limited inventory, higher prices and higher mortgage rates for the drop. The median home price was $188,900, up 10.7% from January 2013.

Fannie Mae reported net income of $6.5 billion the latest quarter and earned a record $84 billion for 2013. Fannie also paid the Treasury $7.2 billion, pushing its bailout payback to a total of $121.1B, compared with the $116.1B of federal aid it received. Fannie Mae cited the return to profitability to the recovery in the housing sector and as it raised fees. Fannie Mae and cousin Freddie Mac provide liquidity to the mortgage market by buying loans and packaging them into guaranteed securities.

The Mortgage Bankers Association reported yesterday that the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.39% of all loans outstanding at the end of the 4th quarter of 2013, the lowest since the 1st quarter of 2008. The delinquency rate includes loans that are at least one payment past due, but does not include loans in the process of foreclosure.
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Mortgage Market News

The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) in January rose by 0.1%, which was below the 0.2% expected. The Core CPI rate, which strips out volatile food and energy, was inline at 0.1%. Looking at the year-over-year numbers, the headline CPI rose to 1.6% from 1.5%, while the Core fell to 1.6% from 1.7%, both below the Fed's upper end of 2% range. The Consumer Price Index measures monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.
Americans filing for first time unemployment benefits held nearly steady in the latest week as the labor market continues to jump hurdles. Weekly Initial Jobless Claims fell by 3,000 in the latest week to 336,000 and just near the 335,000 expected. The numbers come after two weak readings on job creation in December and January.
The nation's largest employer and bellwether for the retail industry, Wal-Mart, reported that earnings per share fell to $1.34 in the 4th quarter of 2013 from the $1.67 reported in the 4th quarter of 2012. In addition, Wal-Mart's also forecasted lower than expected numbers this year. However, online sales topped $10 billion, a 30% rise from last year in the same period. Wal-Mart cited bad weather for the decline.
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Mortgage Market News

Economic news was abundant today, mostly dominated by housing related data. The Commerce Department reported that Housing Starts in January declined by 16% to an annual rate of 888,000 revised from the higher December number of 1.048 million, as harsh winter weather continues to impact the sector. Building Permits, a sign of future construction, fell by 5% to an annual rate of 937,000. Both Housing Starts and Building Permits numbers were below expectations in January.
 
The Mortgage Bankers Association (MBA) reported today that its Market Composite Index, a measure of total loan application volume, fell by 4.1% in the latest week. The refinance index fell by 2.7%, the purchase dropped 6.3% to hit its lowest level since September of 2011. The MBA said the 30-year fixed-rate mortgage with a conforming loan balance rose to 4.750% from 4.45% in the latest survey.
 
The January Producer Price Index (PPI) was inline at 0.2%, Core at 0.2%, above the 0.1% expected. The headline PPI year-over-year rose to 1.2%, up from the December reading of 1.1%, Core at 1.3%, which was up from 1.2% in December. Both were a bit hotter than expected. The PPI has been revamped by the government. While the PPI had previously tracked wholesale prices of goods, it will now track services, such as banking, retailing and health care, along with construction. The index will also cover goods and services that are exported or bought by the government, when previously only goods bought by consumers and businesses were included.
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Mortgage Market News

The National Association of Home Builders (NAHB) reported this morning that severe weather across the country this month held potential buyer traffic low for newly-built single family homes. The NAHB Housing Market Index fell by ten points from January to 46, well below the 56 expected. The NAHB also cited concerns about meeting ongoing and future demand due to a shortage of lots to build on and labor.
The New York Federal Reserve reported that business conditions across the region fell from January to February as companies continue to cite harsh weather as the culprit. The Empire State Manufacturing Index fell to 4.48 this month from the 12.5 recorded in January and below the 7.5 expected. The report revealed that the new orders index fell to -0.2 from the 11 recorded in January, while the employment component was essentially unchanged.
In corporate earnings news, soft-drink giant Coca-Cola reported that 4th quarter global sales volumes rose less than expected and declined in North America. Consumers continue to cut back on soda consumption and look for healthier alternatives. The soda maker has been responding by pushing juices, teas, water and other non-carbonated beverages. Coke's revenues fell by 3.6% to $11.04 billion in the quarter, when estimates called for revenues of $11.31 billion.
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Mortgage Market News

The Mortgage Bankers Association reported today that its Market Composite Index, a measure of total loan application volume, fell by 2% in the latest week despite a decline in home loan rates in the past month. The refinance index declined by 0.2%, while the purchase index fell by 5%. The Market Composite Index hit its lowest level at the end of 2013 since December of 2000.
The National Association of Realtors (NAR) released its latest quarterly report revealing that a vast majority of homeowners have seen significant gains in equity over the past two years. There were 119 of 164 metropolitan areas seeing gains based on closings in the fourth quarter of 2013, compared to the fourth quarter of 2012. However, the NAR said that "home prices have been rising faster than incomes, while mortgage rates are above the record lows of a year ago."
The House of Representatives approved a bill to raise the nation's debt ceiling for one year on Tuesday as Republicans agreed to follow President Obama's advice to allow a debt limit increase without any conditions. The bill will go to the Senate today, where it is likely to pass, then to the President Obama to be signed into law.
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Mortgage Market News

Fed Chair Janet Yellen will face her first test in her semi-annual monetary policy testimony in front of Congress this week. Ms. Yellen will be in front of the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday. Ms. Yellen will be grilled a bit by those critical of the Fed’s actions to see what her take is on tapering QE3 and overall accommodative monetary policy. 
 
The trading week begins with Stock prices modestly lower, while Bond prices are pushing higher. The week features just a few economic reports on Weekly Initial Jobless Claims, Retail Sales and Consumer Sentiment. Stocks have been under pressure in 2014 due to weaker than expected economic data, profit taking by investors, and the Fed easing back on its massive stimulus program, which is geared towards promoting both job and economic growth.
 
Fast food giant McDonald's reported today that sales in January fell by 3.3% in the U.S., while total global sales were up 1.2%. The company cited bad weather last month for the decline in domestic sales. McDonald's has been promoting its Dollar Menu, but has been also fending off competition by Wendy's and Burger King.
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Mortgage Market News

The Labor Department reported this morning that employers added just 113,000 jobs in January, which was below the 175,000 expected, but up from the paltry 75,000 created in December. A freeze in hiring in the health care sector is one of the factors to the lower numbers. The Unemployment Rate fell to 6.6%, the lowest level since October 2008, but that can be due in part to people falling out of the work force than finding jobs.
Filling up at the pumps will begin to be more expensive as spring nears due to more drivers being on the road along with refineries shutting down for winter maintenance, which reduces supplies. The national average price for a regular gallon of gasoline is at $3.26. For 2014, AAA predicts that the nationwide average price will peak between $3.55 and $3.75 per gallon with the average price around $3.49.
The Census Bureau reports that the share of Americans who own their own homes was 65.2% in the fourth quarter of 2013, down from 65.4% in the previous quarter. Higher borrowing costs coupled with tight credit were the two factors behind the decline. The rate peaked at 69.2% in June of 2004.
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Mortgage Market News

Americans filing for first time unemployment benefits declined in the latest week, but have been stuck at current levels for the past month influenced by seasonal holiday hiring factors and unusually harsh weather across the nation. Weekly Initial Jobless Claims fell by 20,000 in the latest week to 331,000 and just below the 335.000 expected. The four week moving average of claims, which irons out seasonal abnormalities, was nearly unchanged to 334,000.
 
Planned layoffs at U.S. companies surged in January from December due to seasonal holiday hiring layoffs and weak sales at major retailers. Outplacement firm Challenger, Gray & Christmas reported that planned layoffs rose by nearly 50% last month after hitting a 13-year low in December to 45,000 from 31,000. Many retailers and restaurant chains stated the harsh winter has had an impact on sales.
 
#HashtagTwiiter down! Shares of popular social media site Twitter (TWTR) are crashing today after the company reported its first earnings as a publicly traded company. The price per share was down 17% in early trading after company stated that user growth may not be sustainable. In addition, the company also cited slowing sales.
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Mortgage Market News

Home prices continued to rise in the period from December 2012 to December 2013, but at a lesser pace than previous year-over-year readings. CoreLogic reported today that home prices, including distressed sales, rose by 11% in the period mentioned, but that is down from the 11.8% gain seen from November 2012 to November 2013. In addition, prices declined month-to-month by 0.1% from November to December.
Richmond Virginia Fed President Jeffrey Lacker reported today that U.S. growth could be muted in 2014, but the Federal Reserve will continue to taper its massive stimulus program, dubbed Quantitative Easing III. Mr.Lacker cited declining spending by both consumers and businesses. The Fed official went on to say he feels the growth will be closer to 2% in 2014, about the same rate that the country has seen since the end of the Great Recession.
Stock prices are rebounding today after yesterday's steep plunge, which was touched off by a weaker than expected reading from a national manufacturing report, the ISM Index. The S&P 500 had recently lost nearly 6% from its record closing highs hit in late December and mid-January. The declines have come from profit taking, Fed tapering, a slowdown in China and on the notion that a small correction was due after the record levels recently hit.
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Mortgage Market News

The top spot at the Federal Reserve Bank of the U.S. switches to former Vice Chair Janet Yellen from outgoing Chief Ben Bernanke today. Ms. Yellen is the first woman to be the Chairperson in its 100-year history and will guide the nation through the post recession era of the U.S. economy.
 
In economic news, the January ISM Manufacturing Index was released this morning and came in lower that expectations at 51.3 versus the 56.0 expected to the slowest pace in 10-months. Within the report it showed that the new orders component fell 13.2 points to 51.2, also the lowest since May. The hiring gauge fell by 3.5 points to 52.3. The decline was due in part to unusually poor weather in January.
 
The big economic report due for release this week is the January Jobs report, which consists of Non-farm Payrolls and the Unemployment Rate. Payrolls are expected to rise by 175,000, after the weak reading in December of only 74,000 jobs created. The Unemployment Rate is expected is expected to drop to 6.5% from 6.7%. The report will be released Friday at 8:30am ET.
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