Mortgage Market Update – 03-28-14

Americans’ attitudes towards the economy fell to lows not seen since November as higher heating and gasoline costs put a strain on household budgets. The March Consumer Confidence Index came in at 80.0, which was inline with estimates and the February reading. Economic data in 2014 has been a bit disappointing, but the harsh winter weather could have been the reason. As spring blooms, consumers will be looking for signs of more positive economic data, which would confirm that the weather had a big impact on the early year tepid economic numbers.

Consumer spending rose by the most in three months in February on services such as health care and utilities. Personal Spending rose by 0.3% last month, which was inline with estimates. Personal Income also rose by 0.3% last month, which also matched estimates. Within the data it showed that the personal savings rate edged up to a four month high of 4.3% from 4.2% in January. In addition, inflation remained tame as evidenced by a 0.1% rate in the Core Personal Consumption Expenditure, the Federal Reserves favored gauge for inflation.

In an effort to brew up some business, fast food giant McDonald’s will be offering free small cups of coffee at no charge during breakfast hours from March 31 through April 13. The world’s largest restaurant chain is rolling out the campaign for the first time to lure in new customers and to get existing customers to come in more frequently. The company is figuring that it’s likely that those stopping in for the free coffee will purchase a breakfast sandwich or other items.

Existing Home Sales – Oct – Feb

The National Association of Realtors (NAR) reported on Thursday that February Existing Home Sales fell by 0.4% from January to 4.60 million units on an annualized basis. The 4.60 million was inline with estimates and was 7.1% below the 4.95 million units registered in February of 2013.


The NAR cited the unusually harsh winter weather, tightening of credit and higher home prices as the cause behind the stagnant sales data.fea_chart_032114_print

Lender Of The Year Press Release

3-24-2014 9-33-19 AM


WILMINGTON- Alpha Mortgage Corporation was recognized with an award for Lender of the Year at the 2014 MAX! Awards on Thursday, March 20, 2014.

 The MAX! Awards are presented by the Wilmington – Cape Fear Home Builders Association’s Sales and Marketing Council. The awards recognize the best in media, marketing, and advertising tools of WCFHBA members and industry professionals.

 Winners were selected by a panel of professionals who specialize in disciplines that are related to new home construction and sales industries. To ensure an objective review of all entries, judges from North Carolina were located outside of the judging region.

 The awards banquet was held at Balcony on Dock in downtown. Rhonda Bellamy of the Wilmington Arts Council was the mistress of ceremonies announcing each winner and presenting the awards. The event not only showcased industry achievements and offered networking opportunities for industry leaders in attendance.


Mortgage Market Update 03-24-14

A report from Bank of America Merrill Lynch revealed that the Federal Reserve needs to continue to back the mortgage market in order for the housing recovery to continue. The recovery may not be sustained if the Federal Reserve continues to scale back on its stimulus program, dubbed QE III, which will lead to higher interest rates. The investment bank sees that mortgage application activity has been weak, and if higher rates are ahead, they see application activity declining further.

Subprime mortgages are making a comeback after being almost non-existent after the housing market collapse. However, this time around they come with a few caveats…higher rates and big down payments. Lenders of subprime loans are now charging interest rates as high as 8 – 10%, with 25% to 35% down payments. The typical applicants for the new subprime loans are young, first time home buyers and former homeowners whose credit was destroyed in the housing collapse.

Malaysian Flight MH370 has been missing for two weeks and today news from the Malaysian Prime Minister revealed that the airliner crashed in the Indian Ocean, as observed from new satellite images from Britain. The plane had 239 people on board when it disappeared on March 8 after taking off from Kuala Lumpur bound for Beijing, China.

Mortgage Market Update 03-17-2014

Economic data had little impact t on the capital markets today as all eyes continue to focus in on the geopolitical news out of Europe. The republic of Crimea has voted to break off from Ukraine and join Russia. President Obama has stated that Crimea’s vote “would never be recognized” by the U.S. and warned of further military action toward other parts of Ukraine.

The New York Federal Reserve reported that its Empire Manufacturing Index rose to 5.6 in March, above the 4.5 recorded in February and nearly inline with estimates. Within the report it showed that both the new orders index and the employment component both saw positive gains. Readings over 0.0 indicates improving conditions, below indicates worsening.

Over in housing news, the National Association of Home Builders (NAHB) March Housing Market Index rose to 47 in March from the 46 recorded in February and below the 50 that was expected. The NAHB said that poor weather and difficulties in finding lots and labor weighed on the index. A number below 50 indicates that more builders view conditions as poor than good.

Mortgage Market Update 03-13-14

Americans filing for first time unemployment benefits fell to lows not seen since late November, signaling an uptick in the labor market. The Labor Department reported that Weekly Initial Jobless Claims fell by 9,000 in the latest week to 315,000, which was below the 329,000 that was expected. As the country moves out of the unbearable cold weather and massive snowstorms, the sector could be on its way to greener pastures.

In the foreclosure arena, RealtyTrac reported that foreclosure activity across the nation fell to its lowest level in more than seven years, due in part to the rise in home equity. February foreclosure starts fell by 9% from January to February and are down a whopping 27% from one year earlier. However, 14 states saw an increase in foreclosure starts last month, with New Jersey seeing an increase of 126% from a year ago.

The Commerce Department reported on Thursday that after falling for 2 months, Retail Sales rose by 0.3%, above the 0.2% expected in February, as consumers purchased a variety of goods, despite the harsh winter weather last month. When stripping out autos, sales also rose by 0.3%, above the 0.2% expected. Retail Sales make up about 1/3 of consumer spending, the main driver behind economic growth. If consumer spending can continue to expand, economic growth will continue to increase.