Friday Rate Update

Mortgage Rates Unchanged 

The rate for a 30-year fixed-rate mortgage averaged 3.43 percent this week, unchanged from the previous week, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.84 percent.

This week’s 15-year FRM averaged 2.74 percent, unchanged from last week. A year ago, the 15-year FRM averaged 3.06 percent---

ABA Daily Newsbytes

Black Knight: Fewer Homeowners Refinancing

According to a new report from Black Knight Financial Services, homeowners are not refinancing their mortgages despite rates being near all-time lows. The report shows that the number of borrowers eligible to refinance climbed to 8.7 million at the end of June, but prepayment speeds dropped 12 percent in July. Also in July, the national delinquency rate edged up 5 percent, marking the first gain above 4.5 percent since February. However, foreclosure starts were down 12 percent from June to 61,300 in July, which is the second lowest monthly total in a decade. Furthermore, foreclosure inventory declined 20 percent on a year-over-year basis to the lowest level since July 2007.

From "Black Knight: Fewer Homeowners Refinancing"
HousingWire (08/22/16) Ramírez, Kelsey

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Friday Rate Update

Mortgage Rates Down Slightly 

The rate for a 30-year fixed-rate mortgage averaged 3.43 percent this week, down from the previous week’s 3.45 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.93 percent.

This week’s 15-year FRM averaged 2.74 percent, down from 2.76 percent last week. A year ago, the 15-year FRM averaged 3.15 percent.

--ABA Daily Newsbytes

What Dearth of New Banks Means for the Industry's Future

The U.S. House Oversight and Government Reform Committee recently examined the fact that only three banks have been organized since 2009 and what that means for banking in this country. Prior to 2009, between 100 and 200 new banks were formed every year, according to the Federal Reserve Bank of Richmond. The Richmond study analyzed whether this pattern was similar to prior recessions and found it was very unusual. In all prior periods, the quantity of new bank applications dipped during the recession, but quickly rebounded to normal levels during the recovery. Following the last recession, however, the numbers dropped virtually to zero and remain flat-lined today. One outcome will be a lack of sufficient services for small businesses and consumers, with rural areas particularly harmed. Another concern is that a dearth of new banks will lead the industry to become even more concentrated in a few very large banks, eventually undoing the fundamental structure of the U.S. banking system. The Richmond study and other analysis suggest regulatory policies have a significant role in the dearth of new banks, not just economic conditions. Regulators tightened their standards during the recession, but the time may have come to readjust for the good of the economy.

From "What Dearth of New Banks Means for the Industry's Future"
American Banker (08/17/16) Sutton, George

Friday Rate Update

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Mortgage Rates Tick Up 

The rate for a 30-year fixed-rate mortgage averaged 3.45 percent this week, up from the previous week’s 3.43 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.94 percent.

This week’s 15-year FRM averaged 2.76 percent, up from 2.74 percent last week. A year ago, the 15-year FRM averaged 3.17 percent.

--ABA Daily Newsbytes

Credit Availability Isn't as Tight as Experts Thought

The Mortgage Bankers Association (MBA) changed its methodology to more accurately determine mortgage credit availability, which led to the finding that mortgage credit availability has actually increased over the past several months. "We expanded our historical series to cover over 10 years of historical data, and followed that with the introduction of four MCAI [Mortgage Credit Availability Index] sub-indices, conventional, government, conforming, and jumbo, to help users better understand what is driving changes in the overall MCAI," said Lynn Fisher, vice president of research and economics at the MBA. "We are excited to announce an updated methodology that responds more effectively to changes in the marketplace and better accounts for the frequent addition and subtraction of investor offerings." The MCAI increased 1 percent to 165.3 in July, with an increase indicating that credit is loosening. The jumbo and government MCAIs saw the greatest increase in availability, both up 1.3 percent monthly, followed by the conventional MCAI, up 0.7 percent, and the conforming MCAI, up 0.1 percent. "The overall credit availability increase in July was driven by an uptick in programs that allow for refinancing among relatively lower credit score borrowers," Fisher said. "We observed this trend in both the conventional and government programs."

From "Credit Availability Isn't as Tight as Experts Thought"
HousingWire (08/04/16) Ramírez, Kelsey

Friday Rate Update

Mortgage Rates Down 

The rate for a 30-year fixed-rate mortgage averaged 3.43 percent this week, down from the previous week’s 3.48 percent, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.91 percent.

This week’s 15-year FRM averaged 2.74 percent, down from 2.78 percent last week. A year ago, the 15-year FRM averaged 3.13 percent

--ABA Daily Newsbytes

1 Million-Plus More Homeowners Can Benefit From Refi Post-Brexit

Black Knight Financial Services says the drop in mortgage rates following the Brexit vote means 1.3 million more borrowers could benefit from refinancing, boosting the total to 8.7 million — the highest number since 2012. Newly eligible borrowers currently have rates at or above 4.25 percent. "Unlike the 66 percent of borrowers Black Knight identified a few months ago, who could have both likely qualified for and had incentive to refinance in the spring of 2015, but for whatever reason didn't do so, the vast majority of these new candidates did not have such incentive last year," said Ben Graboske, data & analytics executive vice president at Black Knight. "This has produced a nearly 50 percent increase in the number of borrowers with new-found incentive to refinance, which may well be creating a more pronounced impact on refinance applications and originations as these borrowers rush to take advantage." However, purchase applications are not getting the same boost from lower mortgage rates, as the savings are offset by higher home prices.

From "1 Million-Plus More Homeowners Can Benefit From Refi Post-Brexit"
CNBC (08/01/16) Olick, Diana