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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Mortgage Market News

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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