Category Archives: Lending

Mortgage Market Update 12-16-14

Home builder sentiment across the nation edged lower in December, but still remains robust as 2014 comes to an end. The National Association of Home Builders Housing Market Index fell to 57 this month, which was just below the 58 expected and down from the 58 recorded in November. Any number above 50 indicates that more builders view conditions as good rather than poor. Within the report it showed that current sales conditions and expectations for future sales declined, while the traffic gauge of prospective buyers held steady.

In another sign that the U.S. economy has improved from the depths of the Great Recession, the Federal Reserve reported on Monday that factory production rose by 1.1% in November from October. Output at factories has risen 4.8% over the past year, which is above levels seen before December 2007. Despite a global slowdown, the U.S. has continued to recover, led by a boost in auto sales, food, wood, plastics and rubber products.

Today is the busiest day of the shipping season for the U.S. Post Office and FedEx with just 10 days until Christmas. The nation’s largest shipper, the Post Office, says it will process 640 million pieces of mail on Monday, up 33 million from last year. The Post Office further reported that between Thanksgiving and Christmas, it expects to deliver 12.7 billion cards, letters and packages. FedEx reports that it will ship 22.6 million packages on Monday while it will deliver 290 million packages during the same period, up 9% from 2013.

Mortgage Market Guide 12-01-14

The National Federation of Retailers (NRF) reported today that Black Friday weekend sales didn’t sizzle, which could be attributed to deals that began before Thanksgiving. The NRF said that sales from Thanksgiving through Sunday is estimated to hit $50.9 billion, down from the $57.4 billion in 2013, an 11% decline. The NRF went on to say that during the four-day period, 2014 online sales will be flat from last year. Another reason for the ease in sales could be that shoppers are holding out until later in the holiday shopping season to see if they can get better deals.

In a move that could potentially make it possible for hundreds of thousands of additional consumers to get mortgages, Fannie Mae and Freddie Mac have relaxed lending standards beginning today, December 1st. The new measures stem from an agreement in October where lenders had blamed the lack of clarity on when they would be penalized for making mistakes on mortgages they sell to Fannie and Freddie. The new standards should include faster turnaround times for mortgage applications to be processed. In addition, lenders be able to consider reduced credit scores and look past one time events when consumers suffered a hit on credit scores.

Fannie Mae released its Economic and Housing Outlook report for November late last week revealing that “economic growth in the U.S. is slowing from the strong mid-2014 numbers to a more moderate pace heading into next year.” Fannie Mae said that full economic growth is expected to be around a modest 2.5% in 2015. Fannie went on to say their view of housing starts, home sales, and home price trends will be largely unchanged next year and that “mortgage activity in 2015 will be very similar to 2014.”

Mortgage Market Guide

Americans filing for first time unemployment benefits fell to multi-year lows in the latest week as the sector continues to recover and move into greener pastures. The Labor Department reported that Weekly Initial Jobless Claims fell by 10,000 to 278,000 and is the second lowest level since the Great Recession ended. The four-week moving average of claims, which irons out seasonal abnormalities, fell to a 14-year low of 279,000, down 2,950 from the previous week. Since June, claims have averaged 293,000 per week compared to last year’s same time period of 343,000 and well below the 594,000 average per week in 2009.

Global outplacement firm Challenger, Gray & Christmas reported today that after falling to a 14-year low in September, planned layoffs by employers across the nation surged by nearly 70% from September. U.S. employers announced planned cuts of 51,183 in October, well above the 30,477 planned in September. October is the second highest amount of planned cuts since the May 2014 figure of 52,961 and marks only the fourth time in the last 22 months that planned cuts were above 50,000.

With the Thanksgiving Holiday quickly approaching, more Americans are expected to take to the skies to visit friends and relatives this season. Airlines for America reports that 24.6 million passengers will fly domestically between November 21 and December 2. That’s up about 1.5% from 2013, or 31,000 more passengers per day. U.S. carriers have reaped some big profits in that past year and are making sure that there is enough room to meet the growing demand. The top three destinations for Thanksgiving are Chicago, Orlando and Cancun.

Mortgage Market Update 10-21-14

The National Association of REALTORS® reported today that sales of Existing Homes rose by 2.4% from August until September to the highest level this year. Sales rose to 5.17 million units on an annualized basis and above the 5.11 million expected. Within the report it showed that cash sales made up 24% of all transactions and down from 33% last year this time. However, sales are down 1.7% from the 5.26 million units recorded in September of 2013.

Consumer spending for candy, costumes and decorations this October is setting up 2014 as the most ever spent for Halloween. Spending is set to hit $7.4 billion this year and is making it the second-fastest growing holiday for consumer spending. The National Retail Federation said that 43% of shoppers start Halloween shopping in the first two weeks of the month, while just under 25% wait until the last minute.

Fast food giant McDonald’s reported on Tuesday that third-quarter earnings were worse than expected as the world’s largest restaurant company struggles with sales in other parts of the globe. President and Chief Executive Don Thompson said that there was a significant decline in the numbers from the same period as last year due to a higher effective tax rate, unusual events in Europe and Asia, as well as under performance here in the U.S. McDonald’s reported a profit of $1.07 billion in the latest quarter compared with $1.52 billion a year earlier.

Mortgage Market Guide 10-14-14

Bank earnings were abundant today with Citigroup, JPMorgan and Wells Fargo all reporting their quarterly numbers. Wells Fargo reported that revenues came in at $21.2 billion, above the $21.1 billion expected. JPMorgan reported a profit of $5.6 billion, a big surge from the $380 million in the same period last year, which was due to hefty legal bills. Lastly, Citigroup earned $1.15 per share, which was above the $1.12 expected.

The National Federation of Independent Business reported that its small business optimism index fell in September. Business owners are expecting an ease in profits and sales, a tightening in credit conditions, and are experiencing a harder time filling job openings with qualified candidates. The Index fell 0.8 points to 95.3, which is five points below where it was before the start of the Great Recession in late 2007.

The U.S. Stocks markets have lost some ground in the past few weeks. U.S. equities have lost almost $744 billion in values since October 8 due to slowing global growth concerns and as the Federal Reserve eases back on its latest stimulus program dubbed Quantitative Easing III (QE). The QE program was originally announced in November of 2008 to promote job and economic growth. The closely watched S&P 500 Stock Index has lost 6.3% since hitting its all-time closing high of 2,011 back on September 18, 2014.