Happy Halloween!

FHFA: GSEs Fall Short of Low-Income Housing Goals 

The Federal Housing Finance Agency in its Annual Housing Report on Friday said that both Fannie Mae and Freddie Mac failed to meet their affordable housing goals for low and very-low income buyers purchasing single-family homes in 2015.

The goal was for 24 percent of loans the GSEs buy to go to households with incomes under 80 percent of their area’s median income and 6 percent to go to households with incomes under 50 percent of AMI. According to the report, Fannie and Freddie hit 23.5 percent and 22.3 percent, respectively, for low-income households (those with incomes under 80 percent of AMI). For very-low income households (those with incomes under 50 percent of AMI), Fannie came in at 5.6 percent, while Freddie hit only 5.4 percent. Read the report. 

--ABA Daily Newsbytes




 The colonial jack o'lanterns are courtesy of Colonial Williamsburg.  Plan a visit there this fall!  

Friday Rate Update

Mortgage Rates Dip Lower 

The rate for a 30-year fixed-rate mortgage averaged 3.47 percent this week, down from the previous week's 3.52 percent rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.76 percent.

This week's 15-year FRM averaged 2.78 percent, down from last week's 2.79 percent rate. A year ago, the 15-year FRM averaged 2.98 percent.

--ABA Daily Newsbytes

Economic Bits

FHFA Index: Home Prices Rise in August 

U.S. home prices rose 0.7 percent in August, according to the Federal Housing Finance Agency’s House Price Index released yesterday, following a 0.5 increase the month prior. Prices were up 6.4 percent from a year earlier, marking eight consecutive year-on-year increases of more than 5 percent. The FHFA's monthly index is calculated using the prices of houses bought with mortgages backed by Fannie Mae and Freddie Mac. 

Consumer Confidence Declines
The Consumer Confidence Index decreased in October, landing at 98.6 points following an eight-year high in September, the Conference Board said yesterday.

“Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat,” said the Conference Board’s Lynn Franco. “Overall, sentiment is that 
the economy will continue to expand in the near-term, but at a moderate pace.” 




Home Price Growth Picks Up
Home price growth in 20 major metro areas accelerated in August, with year-over-year growth at 5.3 percent, according to the Standard & Poor’s/Case-Shiller Home Price Index released yesterday. Prices have grown at a rate of 5 percent or higher since early 2015. Ten cities reported year-over-year growth, and 14 cities reported increases in July. Year-on-year growth was highest in Portland, Seattle and Denver.   

---ABA Daily Newsbytes

FDIC: Share of ‘Unbanked’ Continues Downward Trend 

The share of the population that is unbanked continued falling in 2015, reaching 7 percent -- the lowest share yet recorded in the FDIC’s biennial survey of unbanked and underbanked households released yesterday. The reduction in the unbanked was also seen across many population segments and demographics that have historically been less likely to use mainstream financial services, including blacks, Hispanics, the disabled and low-income households.

Half of the ongoing decline in unbanked status can be attributed to economic improvements, the FDIC said. As people become employed or grow their assets, they often enter or return to the banking system. Major contributing factors to unbanked status include not having enough money to justify opening an account -- more than one-third of the unbanked said this was the main reason -- as well as income volatility.

Meanwhile, the share of households that were “underbanked” -- those that have a bank account but have also used nonbank, alternative financial services such as check cashers -- remained steady at 19.9 percent. Continuing a growing trend from previous surveys, more than a quarter of unbanked and 15 percent of underbanked households relied on prepaid cards in 2015, versus about 7 percent of fully banked households.

The survey indicated that prepaid card users often use the cards as a substitute for a bank account; unbanked households that had previously had a bank account were 22 percentage points more likely to use them than those who had never had a bank account. Indeed, 12.6 percent of unbanked households used a prepaid card as an emergency savings vehicle.

The survey, conducted every two years since 2009 by the FDIC and U.S. Census Bureau, found that 46.5 percent of unbanked households were previously served by a bank, consistent with previous survey results. About a quarter of these said they were likely to re-open a bank account in the next year, down 10 points from 2013.

Read the survey here.


--ABA Daily Newsbytes

Housing Starts Plunge 

Housing starts fell 9.9 percent to a seasonally adjusted annual rate of 1.05 million units, the Commerce Department said yesterday. The September figure was 11.9 percent below the September 2015 rate. Permits for new construction, which are considered a gauge of future demand, were 6.3 percent above August’s rate, landing at an annual rate of 1.15 million--   ABA Daily Newsbytes

Millennials Limit Their Spending

65% of Americans Are Concerned With Spending

 In this climate, who knows what lies ahead, so many Americans are choosing to play it safe.

To that end, nearly 2 in 3 Americans are limiting their monthly spending, according to a new report by Bankrate.com.

The majority of those polled cited the need to save more money as the reason behind a more cautious approach to spending, while one-quarter blamed stagnant income, followed by worries about the economy and having too much debt.

Read more here.

Friday Rate Update

Mortgage Rates Edge Up 

The rate for a 30-year fixed-rate mortgage averaged 3.47 percent this week, up from last week’s 3.42 rate, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 3.82 percent.

This week's 15-year FRM averaged 2.76 percent, up from 2.72 a week prior. A year ago, the 15-year FRM averaged 3.03 percent

---ABA Daily Newsbytes