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Thursday, March 23, 2017

Economic Update

Existing Home Sales Turn Downward Existing home sales fell 3.7 percent in February, landing at a seasonally adjusted annual rate of 5.48 million and following a 10-year high the month prior, the National Association of Realtors said yesterday. The increase was attributed to weakening inventory and affordability conditions. Sales were up 5.4 percent from a year prior, NAR said. 

FHFA Index: Home Prices Hold Steady
U.S. home prices were unchanged in January, according to the Federal Housing Finance Agency's House Price Index released yesterday. January's stagnancy followed a 0.4 percent rise the month prior. Year on year, prices were up 5.7 percent. The FHFA's monthly index is calculated using the prices of houses bought with mortgages backed by Fannie Mae and Freddie Mac. 

--ABA Daily Newsbytes

Wednesday, March 22, 2017

Is The American Health Care Act Pushing Down Mortgage Rates?


The day started where yesterday left off, interest rates working lower and MBS prices up. Stock indexes in pre-opening trade were generally unchanged prior to actual open. What is happening in the bond market, and why have the stock indexes lost most of their earlier momentum? We warned about it since the beginning of the Trump euphoria, the Trump policies are progressing very slowly. The healthcare reform, tax cuts and increases in fiscal spending that investors lapped up as done deals are now in question. Not that they may not happen, but all of those lofty goals will not happen as rapidly as equity markets and the bond markets had expected.
Tomorrow the House is set to vote on the healthcare bill, now dubbed as RyanCare; the prognosis isn’t good that it will pass with a number of Republican conservatives already at odds with the bill. Then even if it does pass, the Senate will not go along with it as it is presently structured. That leads to months of debate and politicking and in turn will delay any tax cuts and fiscal spending. Reality has set in that even though the political landscape has undergone a major shift, politics. The result, money leaving equities and searching for a momentary respite. Not news here; we have warned stocks are overbought and some pull back is likely. I doubt the strong bullish undertone will change but at current levels and the reality that the benefits promised won’t occur soon…. maybe not even this year.
At 9:00 am FHFA reported that Jan home prices were unchanged from Dec; forecasts were for an increase of 0.5%. Yr/yr prices 5.7% down from +6.2% in Dec.
Feb existing home sales just released at 10:00 AM EST; estimates were for a decline of 2.5% to 5.55 mil from 5.69 mil in Jan. As reported, sales were down 3.7% to 5.48 mil units yr/yr sales +5.4%; inventories dropped another 6.4%, median sales price $228.900 (yr/yr +7.4%).
The vote on health care tomorrow that looks iffy has pushed yields lower as investors are taking out insurance policies against the possibility stocks will succumb to additional sales pressures. The target we have now for the bellwether 10 yr note is 2.32% (2.40% now). Yesterday’s decline in stocks and declines in interest rates is not yet a trend, so far just a down day yesterday. Our models and other technical indicators have turned bullish now but still the wider outlook remains for higher interest rates with the Fed talking at least two more increases this year. Of course, that will not occur if the economic outlook changes or stocks collapse.

Source: TBWS

Friday, March 17, 2017

Friday Rate Update

Mortgage Rates Climb 

The rate for a 30-year fixed-rate mortgage averaged 4.3 percent this week, up from the previous weeks 4.21 rate. At this time last year, the 30-year FRM rate averaged 3.73 percent.

This weeks 15-year FRM rate averaged 3.5 percent, up from last weeks 3.42 percent. A year ago, the 15-year FRM rate averaged 2.99 percent.

--ABA Daily Newsbytes

Wednesday, March 15, 2017

Slightly Larger Down Payments....

First the good news: down payments among first-time homebuyers are getting slightly bigger.
Now the not-so-good news: that’s not saying much.

In 2009, when the National Association of Realtors started tracking such data in its monthly Realtors Confidence Index, nearly three-quarters of first-timers made down payments of between 0% and 6% of the purchase price. In February, only 65% did.

By that metric, any down payment not in the 0-6% range is bigger, and therefore probably better both for the system and for most individual buyers. But just barely: the median among first-timers in 2016 was 6%, according to separate data NAR tracks. Among all buyers, the median is 10%.

--by Andrea Riquier-- Market Watch  --Read more


Friday, March 10, 2017

ICBA meets with President Trump

ICBA community bankers met with President Donald Trump and other senior officials at the White House to discuss targeted regulatory relief that will unleash the power of community banks. ICBA Chairman Rebeca Romero Rainey, ICBA Chairman-Elect R. Scott Heitkamp, ICBA Vice Chairman Timothy K. Zimmerman and ICBA President and CEO Cam Fine shared examples of how excessive regulatory burdens affect lending and economic growth.

The meeting with President Trump, Treasury Secretary Steven Mnuchin, National Economic Council Chairman Gary Cohn and White House Chief of Staff Reince Priebus included a discussion of the most burdensome rules and ICBA’s Plan for Prosperity regulatory relief platform. Trump said community banks “play a vital role in helping create jobs by providing approximately half of all loans to small businesses” and pledged to continue taking on regulatory burdens that inhibit lending.

“Community banks are the backbone of small business in America,” Trump said. “We are going to preserve our community banks"


Friday, March 3, 2017

Friday Rate Update

Mortgage Rates Take Downward Turn
The rate for a 30-year fixed-rate mortgage averaged 4.10 percent this week, down slightly from the previous weeks 4.16 percent rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.64 percent.

This week's 15-year FRM rate averaged 3.32 percent, down from last week's 3.37 percent. A year ago, the 15-year FRM rate averaged 2.94 percent.

--ABA Daily Newsbytes

Monday, February 27, 2017

Dispelling Lending Myths....

 By , vice president of single-family affordable lending, Freddie Mac

Obstacles in the path to homeownership have reached mythical proportions, preventing many would-be homebuyers from even starting the journey. Loan originators are in a unique position to help cut borrowers’ concerns down to actual size and give them confidence that they can achieve their goals.

Myths about mortgages abound in the minds of many homebuyers. Loan originators must be aware of the presence of these myths and, armed with the facts, provide potential borrowers with a better understanding of the realities and possibilities of the loan-origination process. Let’s take a look at some of the most common myths, along with the facts originators can use to dispel these fairy tales.

Downpayment-amount myth

The notion that downpayments have to be in the 20 percent range is the most persistent myth out there, and we need to debunk it. The average downpayment among first-time homebuyers in 2016 was 6 percent, and for repeat buyers, downpayments were between 13 percent and 14 percent, according to the National Association of Realtors. Some mortgage products let eligible borrowers put down as little as 3 percent — or even less, in some cases.
Many people believe that the best — perhaps only — low-downpayment option is a Federal Housing Administration (FHA) loan. It’s worth checking into other offerings. A conventional product might prove more affordable for some borrowers. Loan originators can help spread this word to real estate professionals and consumers.
A survey of real estate professionals conducted for Freddie Mac by market-research company, GfK, found that 50 percent of potential borrowers trust real estate professionals to educate them on mortgage products that best meet their needs. Eighty percent of respondents were extremely or moderately familiar with FHA products, yet only around one-quarter knew about low-downpayment products from Freddie Mac or Fannie Mae (the government-sponsored enterprises, or GSEs).
More importantly, loan originators need to know that the return of low-downpayment loans does not mean we’re about to repeat the housing crisis. The eligibility requirements on these new loans set a higher creditworthiness bar and aim to expand homeownership responsibly.

Read the rest here.