Category Archives: Lending

Mortgage Market Update 07-08-14

he foreclosure numbers continue to decline year-over-year, but there was an increase from April to May, as reported by analytics firm CoreLogic. Completed foreclosures fell by 9.6% to 47,000 in May from the 52,000 recorded in May of 2013. However, from April to May there was a 3.8% increase in foreclosures. By comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.

In labor market news, the Bureau of Labor Statistics reported that job openings rose to 4.64 million in May from 4.46 million in April to the highest level since June 2007. Compared to last year this time, job openings have risen 19%. Those workers who have either quit or have been laid off, fell to 4.5 million in May from 4.55 million in April. The labor market has been improving since early in the year when job growth was stagnant due to the harsh winter.

The National Federation of Independent Business (NFIB) reported today that after a promising three month run, June’s Optimism Index fell 6.1 points to 95.0. Only two components improved, two were unchanged, and six declined. The NFIB said that while actual net job creations were positive, consumer business optimism remains low, with both spending growth and sales expectations weak.

Mortgage Market Update 07-07-14

Foreclosure starts across the U.S. unexpectedly rose from April to May by 9.5%, as reported by Black Knight Financial Services. The rise comes after eight straight months of declines with starts down 32% since January. Black Knight said that half of the foreclosure starts are repeat foreclosures, rather than new entries. Repeats are loans that had been in foreclosure, shifted back to either current or delinquent due to a modification, repayment plan or some action by the borrower, but have since fallen back into foreclosure.

Government sponsored entity Fannie Mae released its June 2014 Economic and Housing Outlook revealing that economic activity contracted in the first quarter, which could lead to lower growth in 2014 that was seen in 2013. Fannie Mae has forecasted just 2.1% overall growth in 2014, one-half a percentage point below the 2013 pace. Fannie went on to say that “overall growth in the housing market pulled back in the first quarter, with major housing indicators coming in lower year over year compared to the first quarter of 2013.”

Karl “Chip” Case of the Case/Shiller Home Price Index says that we have much more negative vibrations in the housing surveys abut home ownership that we have ever had before. Mr. Case went on to say that only buy a house for the long haul and says for first time home buyers, be sure you can afford the house and don’t expect a quick profit.

Mortgage Market Update 06-23-14

Housing news dominates the headlines this week as the sector tries to stabilize after the harsh winter weather early in the year weighed on the market. Black Knight Financial Services reported today that home prices rose 0.9% from March to April and were up 6.4% year-over-year. Within the report it showed that 19 of the 20 largest states saw month-over-month increases.

The National Association of REALTORS¬© (NAR) reported that May Existing Home Sales were up 4.9% from April to an annual rate of 4.89 million units. The 4.9% was the highest monthly rate since the 5.5% recorded in August 2011. The report showed that the median home price was $213,400, which is 5.1% above May 2013, while inventories account for a 5.6 month supply. The NAR said that “buyers are benefiting from slower price growth due to much needed, rising inventory levels since the beginning of the year.”

The cost of air conditioning homes across the U.S. is around $11 billion a year with air conditioning accounting for about 5% of all electricity produced in the U.S. There are a few tips to help cut costs. If you have central air conditioning, a shaded area for the unit is the best spot to ensure the highest efficiency. During the cooling period, change the filter once a month so that the unit doesn’t have to work extra hard to cool the house. Closing the blinds and curtains during the peak sun hours will also boost efficiency. In addition, installing ceiling fans will also reduce costs and try to keep the lights off during the long days of sunlight in the summer.

Mortgage Market Update 06-11-14

Low home loan rates fueled the surge in mortgage applications in the latest week as the spring buying season nears its end and summer buying begins. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, increased by 10% in the latest week. The refinance index was up 11%, while the purchase index gained 9%.

U.S. Treasury Secretary Jacob Lew said Wednesday morning that the economy is gaining traction and should grow stronger the rest of the year as the nation overcomes the effects of the harsh winter weather. However, Mr. Lew said that millions of Americans are still feeling the impact of elevated unemployment and slow economic growth. The Secretary went on to say that government and the private sector should seek out ways to boost the hiring of the long-term unemployed.

U.S. Stock prices are under pressure today after the World Bank cut its global economic forecast, which included reducing estimates for the U.S. and China. The World Bank reported that its forecast calls for global growth of 2.8%, down from the 3.2% projected in January. Growth of less that 3% is considered to be sub-par. Growth in the U.S. is expected at a tepid pace of 2.1%, down from 2.8%. The U.S. economy expanded at an anemic rate of -1% when the latest reading on first quarter 2014 Gross Domestic Product was released in May.

Mortgage Market Update 06-02-14

Construction spending picked up in April due in part to increases in home building and government construction. The Commerce Department reported that construction spending rose by a modest 0.2% in April to an annual rate of $953.5 billion, the strongest performance since March 2009. Construction spending had decreased by 0.4% in January, due to the harsh winter weather, but has picked up in recent months as the warmer weather unfolds.
The U.S. Stock markets finished with record highs on Friday as the closely watched barometer for Stocks, the S&P 500, closed at 1,923.57. The low interest rate environment that the Federal Reserve has been fostering, has been a boon for the Stock markets. The S&P 500 hit a multi-year low of 666 back on March 9, 2009 at the height of the recession, a 188% gain.
The manufacturing sector took a minor setback in May as business expansion slowed a bit. The ISM Manufacturing Index fell to 53.2 from the April reading of 54.9, but readings above 50 indicates expansion. The survey showed that 17 of the 18 sectors showed growth last month with just one said business was flat. Within the survey it showed that the employment component fell to 51.9 from 54.7 in April.

Mortgage Market Update – 05-21-14

Despite the spring buying season being in full bloom and mortgage rates at lows not seen in almost a year, mortgage application volume barely budged last week. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 0.9% in the latest week, while the refinance index increased 4%. The purchase index fell by 3%.

Zillow reported today that the national negative equity rate fell to 18.8% in the first quarter of 2014, meaning more is owed on the home than it is currently worth. In Q4 of 2013, negative equity stood at 19.4%. Zillow said that negative equity tends to limit inventory, which pushes home values higher, which in turn makes those homes that are available, that much less affordable.

Government controlled mortgage finance giant Fannie Mae said today that it has cut its outlook for home sales in 2014, as well as 2015. The move comes after markets for new and existing homes experienced weakness in the first quarter. Fannie is now forecasting that existing home sales will hit 4.98 million this year, down from the 5.04 million originally projected. Single family homes are forecasted to see sales of 476,000 this year, down from 494,000.