Mortgage Market News

The Commerce Department reported on Wednesday that December New Home Sales surged 10.8% from November to an annual rate of 544,000 units, above the 506,000 expected. It was third consecutive monthly gain and the third best annual gain since 2008. Sales rose 14.5% in 2015 to 501,000 due to increased confidence in potential home buyers, a strengthening labor market along with low mortgage rates. New Home Sales are based upon the following definition: "A sale of the new house occurs with the signing of a sales contract or the acceptance of a deposit." The house can be in any stage of construction: not yet started, under construction, or already completed.
Shares of Apple Inc. are falling in today's trading after a sobering report on its iPhone sales. The popular smart-phone has seen sales grow at their slowest pace since the introduction to the iPhone in 2007. The company also stated that revenues in the current quarter are expected to decline for the first time in 13 years, signaling the stratospheric growth may be cooling. Apple went on to say that the strong dollar and slowing global growth are the reasons behind the decline in sales. In addition, China, its largest overseas market, has begun to show "signs of economic softness" in the past few months.
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The National Association of REALTORS® reported on Friday that December Existing Home Sales surged nearly 15% from November to an annual rate of 5.46 million units, above the 5.12 million expected. However, the big gains could be because of closing being put off until December due to TRID rules or “Know Before You Owe”. Sales were up 7.7% from a year ago. Existing Home Sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops.
After the recent big losses racked up the U.S. Stock markets, prices rose yesterday and are rising today due in part to oil prices gushing higher. In addition, dovish comments from European Central Bank President Mario Draghi also helped to push prices higher. The closely watched S&P 500 Index has lost a little over 7% to start the year, its worst start to a year on record. To put things into perspective, at the height of the Great Recession in March of 2009, the S&P hit 666 and is now at 1,894.
A massive snowstorm is set to impact nearly 75 million people stretching from the Southeast all the way up to New York City. The storm, labeled Jonas, could dump up to 3 feet of snow in some areas with blizzard warnings throughout the Mid-Atlantic and Northeast states. Washington D.C. could see up to two feet of the white stuff, which has already prompted school closing and government shutdowns. Winds could reach up to 60 miles per hour with coastal storm surges and flooding set to occur.
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Mortgage Market News

After big gains in November, December Housing Starts declined 2.5% from the previous month, raising concerns about the health of the U.S. economy. The Commerce Department reported that Housing Starts came in at an annual pace of 1.149 million units, below the 1.197 million expected. This follows a recent spate of weak economic data. On the bright side, December was the ninth straight month that Housing Starts were above 1 million units, the longest stretch since 2007. For 2015, Housing Starts were up nearly 11%.
Inflation at the consumer level remained tame in December as energy prices continued to decline. The Consumer Price Index (CPI) fell 0.1% after being unchanged in November. The so-called Core CPI, which strips out volatile food and energy prices, rose 0.1%. In the 12 months ending in December, CPI increased 0.7%, the biggest increase in a year, while Core CPI was up 2.1%, the largest gain since July 2012.
The Mortgage Bankers Association reported on Wednesday that its Market Composite Index, a measure of total mortgage loan application volume, rose 9% in the latest week. With mortgage rates just above historical lows, would-be borrowers chose to refinance their homes.
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Mortgage Market News

The foreclosure arena got a little brighter today as RealtyTrac reported that 2015 foreclosure filings fell to their lowest level since 2006. RealtryTrac said that there were nearly 1.1 million properties with foreclosure filings in 2015, the lowest since 2006 with 717,522. In addition, the 103,373 filings in December were down 30% from December 2014. “In 2015 we saw a return to normal, healthy foreclosure activity in many markets even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis,” said Daren Blomquist, vice president at RealtyTrac.
Banking giant JPMorgan Chase reported solid earnings for the latest quarter, but CEO Jamie Dimon warned that the U.S. economy is likely to worsen after years of growth. Mr. Dimon isn't about to call for a recession and says that the economy "still looks okay," but cites concerns surrounding China's economy and the steep drop in commodity prices. The bank reported earnings-per-share of $1.32, above the $1.25 expected, but this was mainly derived from lower expenses as revenues fell 2% for the year.
Fitch Ratings reported that U.S. home prices are expected to rise by 4.5% this year, though there are some trouble spots, with some regional markets being called overvalued. Fitch went on to say that California and Texas may soften a bit, but "large downturns are unlikely." “U.S. mortgage rates are expected to rise 25 basis points to 50 basis points by year end, which should not affect existing borrower performance in a mostly fixed-rate market but it will encourage lenders to broaden loan eligibility requirements as refinance volumes dry up,” Fitch added
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Mortgage Market News

The Bureau of Labor Statistics (BLS) reported on Tuesday that job openings rose in November, which led to more Americans to leave their current jobs and search for better positions. The BLS reported that this was the most people that left their jobs in more than seven years. In November, the number of job openings waiting to be filled climbed by 82,000 to 5.43 million. The numbers came from the release of the JOLTS (Job Openings and Labor Turnover Survey) report.
The National Federation of Independent Business (NFIB) reported on Tuesday that its Small Business Optimism Index rose slightly in December. Business owners were split as some felt more confident about sales, but at the same time, more pessimistic surrounding general business conditions. The NFIB Small Business Optimism Index gained a modest 0.4% in December to 95.2, which is still below the 42-year average of 98.0.
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Mortgage Market News

Labor market news kicked off 2016 on the bright side as employers added more private jobs than expected in December. Payroll processor ADP reported that private payrolls increased by 257,000 in December, above the 190,000 expected. The warm weather in December was projected to bump gains in the job markets. ADP said large businesses added 97,000 jobs, midsize ones, 65,000, and small businesses, 95,000. The report comes ahead of the government's December Jobs Report, which is due out on Friday morning.
Reports that North Korea has successfully tested a hydrogen bomb along with economic woes out of China, are fueling a Stock sell-off on Wall Street today. Also weighing on Stock prices is that oil has fallen to an 11-year low due to continued buildups in supplies. The closely watched Dow Jones Industrial Average has fallen more than 200 points in today's session and has declined by nearly 800 points or 4.5% since December 29 of last year.
Popular smartphone maker Apple is reportedly slowing iPhone production by 30%, which signals a slowdown in sales later this year. Apple has reduced orders to suppliers leading to layoffs and idle capacity at Apple’s Chinese suppliers. Shares of Apple were down nearly 5% in 2015 and are down 2.2% this year. At the current price of $101, the Stock is well off last year's high of $133.
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Mortgage Market News

The housing sector continues to see solid home price gains due to strong demand and tight supplies, in addition to low mortgage rates. CoreLogic reported on Tuesday that home prices, including distressed sales, rose 0.5% from October to November and are up 6.3% from November 2014 to November 2015. Dr. Frank Nothaft, chief economist for CoreLogic says, "Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5% and 6% on a year-over-year basis for 16 consecutive months."
With the holiday shopping season over, sales figures are out for the period from Black Friday through Christmas Eve. MasterCard reports that total sales grew by a sold 7.9% this season, which excludes automobiles and gas, compared to the 5.5% gain in the same period in 2014. MasterCard went on to say that a delay in the onset of cold weather pushed back purchases of winter coats and winter-related apparel, so there was pent up demand after Black Friday. Consumers also had savings from lower gas prices, which they spent during the season.
After the holiday shopping season is over ... what comes next? The holiday return season. January is typically the month in which those gifts that are unwanted, the wrong size or the wrong color, will now have to be returned and exchanged or refunded. But know before you go: meaning, before you head out to the mall to return or exchange, be sure to know the retailers policies. Most retailers return policies remain pretty generous, but complicated, nonetheless. Go to ConsumerWorld.org for all the up-to-date return policies for retailers.
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The manufacturing sector of the U.S. economy continues in its malaise due to a strong dollar and weak demand from overseas. The national ISM Manufacturing Index slid to 48.2 in December, slightly lower than the 48.6 recorded in November. A reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 indicates contraction. Within the report it showed that the employment component declined, while the new orders index climbed.
Black Knight Financial Services reported on Monday that its Home Price Index report for October showed that prices rose 0.2% from September to October. In addition, home prices rose 5.5% higher in October 2015 from one year prior. It was the 42nd straight month of year-over-year home price appreciation. Black Knight went on to say that October's national home price index of $254,000 now puts prices up nearly 27% since the bottom of the market of 2012.
The U.S. Stock markets are getting off to a rocky start in 2016 as the major indexes plunge due to heightened tensions in the Mideast coupled with weak economic data out of Asia. Stock prices in China fell so hard that it caused the Shanghai Exchange to suspend trading for the session after a 7% decline. Here in the U.S. the closely watched S&P 500 Stock Index is down 2.50% or 52 points, while the Dow Jones Industrial Average plunged 450 points.
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