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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.Housing Headlines Disappoint. Mortgage Rates at 2009 Lows
2010 has been the year of "near record low" mortgage rates. Regular
readers are probably used to hearing us say:
- "We're bouncing along just above record lows"
- "Lenders won't go any lower"
- "The rewards of floating don't outweigh the risks of floating"
- "It would take a serious economic downturn for mortgage rates to
go lower"
Well. MBS prices are at all-time highs (AGAIN) and I think we can officially
say mortgage rates are priced at their best levels ever. If not, we're
pretty darn close!
Major lenders were actually buying 4.25% note
rates today! As far as I remember, that was the lowest rate I saw on a
rate sheet last year (that didn't cost 3 points). There were some days
last year when 4.125% loans were traded, but seldom few. Those loan rates
would've been quoted last March and early August.
For the most part I
think it's safe to say this is just about as good as it's ever been...
Don't
get me wrong. I'm not talking "no closing cost" deals here. To close at these
rates a consumer would have to pay more than one discount point, plus an origination fee. But the option is there if the borrower plans to live
in their house forever and can afford to pony up the extra $$$ at
closing. In reality, while record low rates are on the table, the best borrowers are finding their sweet spot around 4.625% while below average borrowers are priced around 4.875%.
What's funny is this all happened after the Federal
Reserve stopped buying mortgage-backed securities. THIS
POST EXPLAINS WHY
What drove mortgage rates this low?
After all the "European Union/Greece/Spain/Portugal/China/North Korea/Iranian/Germany" drama we've gone through over the last 3-4 months, global markets have finally turned a skeptical eye on the U.S. ECONOMY. And at the moment, attention is firmly focused on U.S. HOUSING
Here is quick recap of recent housing data...
- The Mortgage Bankers
Association (MBA) today released its Weekly Mortgage Applications Survey
for the week ending June 18, 2010. IT WAS
DISAPPOINTING. Mortgage loan application volume, decreased 5.9
percent on a seasonally adjusted basis from one week earlier. The
Refinance Index decreased 7.3 percent from the previous week. Refinances now
make up 74.8 percent of new apps. The seasonally adjusted Purchase Index
decreased 1.2 percent and is at 13-year low. READ MORE.
SEE CHARTS
- The FHFA Purchase Only Home
Price Index rose 0.8 percent in April. READ
MORE
- Existing-home sales, which
are completed transactions that include single-family, townhomes,
condominiums and co-ops, declined 2.2 percent to an annualized rate of
5.66 million units in May. WORSE THAN EXPECTED
First-time buyers purchased 46 percent of those homes, down from 49
percent in April. But home prices are up 2.7 percent from last year! READ MORE.
SEE CHARTS
- Sales of new single-family
houses in May 2010 fell 32.7 percent to an annual rate of 300,000. MUCH WORSE THAN EXPECTED! And...April, which
was supposed to see tax credit expiration rush, was revised lower, from
504,000 to 446,000. READ MORE.
SEE CHARTS
- The OCC/OTS says mortgage
payment delinquencies are on the decline but foreclosures are on the rise. Yikes Shadow Inventory.
Borrowers who've already had their loan modified are re-defaulting !
READ
MORE
We are going to hear more and more about a "double dip" in housing. Wait what? When did housing start recovering enough to warrant the classification of a double dip? We've seen some stabilization but the business feels the same now as it has over the past 10 months. Slow!
The fact is, purchase business was seasonal (around expirations) at best and borrowers looking to refinance over the last 10 months have been in no huge hurry to close. Mortgage operations haven't been overwhelmed by an onslaught of borrowers as much as they've been delayed by long lists of underwriting approval stipulations that send originators on wild goose chases. Yes business is slow right now, but business has been slow for quite some time!
How much worse can it really get at this point?
The only way mortgage rates move any lower is if global investors really start to believe that an
economic double dip is imminent. Unfortunately, at that point, low mortgage rates
wouldn't mean a darn thing! So I guess I am saying I wouldn't mind seeing mortgage rates increase a few basis points. Anything to avoid seeing the housing market go under a global microscope. Then everyone will know how slow the market has really been over the past 10 months!
Keep your head up everyone. We've seen worse days...
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Message:
YOUR MESSAGE HERE
Housing Headlines Disappoint. Mortgage Rates at 2009 Lows
2010 has been the year of "near record low" mortgage rates. Regular
readers are probably used to hearing us say:
- "We're bouncing along just above record lows"
- "Lenders won't go any lower"
- "The rewards of floating don't outweigh the risks of floating"
- "It would take a serious economic downturn for mortgage rates to
go lower"
Well. MBS prices are at all-time highs (AGAIN) and I think we can officially
say mortgage rates are priced at their best levels ever. If not, we're
pretty darn close!
Major lenders were actually buying 4.25% note
rates today! As far as I remember, that was the lowest rate I saw on a
rate sheet last year (that didn't cost 3 points). There were some days
last year when 4.125% loans were traded, but seldom few. Those loan rates
would've been quoted last March and early August.
For the most part I
think it's safe to say this is just about as good as it's ever been...
Don't
get me wrong. I'm not talking "no closing cost" deals here. To close at these
rates a consumer would have to pay more than one discount point, plus an origination fee. But the option is there if the borrower plans to live
in their house forever and can afford to pony up the extra $$$ at
closing. In reality, while record low rates are on the table, the best borrowers are finding their sweet spot around 4.625% while below average borrowers are priced around 4.875%.
What's funny is this all happened after the Federal
Reserve stopped buying mortgage-backed securities. THIS
POST EXPLAINS WHY
What drove mortgage rates this low?
After all the "European Union/Greece/Spain/Portugal/China/North Korea/Iranian/Germany" drama we've gone through over the last 3-4 months, global markets have finally turned a skeptical eye on the U.S. ECONOMY. And at the moment, attention is firmly focused on U.S. HOUSING
Here is quick recap of recent housing data...
- The Mortgage Bankers
Association (MBA) today released its Weekly Mortgage Applications Survey
for the week ending June 18, 2010. IT WAS
DISAPPOINTING. Mortgage loan application volume, decreased 5.9
percent on a seasonally adjusted basis from one week earlier. The
Refinance Index decreased 7.3 percent from the previous week. Refinances now
make up 74.8 percent of new apps. The seasonally adjusted Purchase Index
decreased 1.2 percent and is at 13-year low. READ MORE.
SEE CHARTS
- The FHFA Purchase Only Home
Price Index rose 0.8 percent in April. READ
MORE
- Existing-home sales, which
are completed transactions that include single-family, townhomes,
condominiums and co-ops, declined 2.2 percent to an annualized rate of
5.66 million units in May. WORSE THAN EXPECTED
First-time buyers purchased 46 percent of those homes, down from 49
percent in April. But home prices are up 2.7 percent from last year! READ MORE.
SEE CHARTS
- Sales of new single-family
houses in May 2010 fell 32.7 percent to an annual rate of 300,000. MUCH WORSE THAN EXPECTED! And...April, which
was supposed to see tax credit expiration rush, was revised lower, from
504,000 to 446,000. READ MORE.
SEE CHARTS
- The OCC/OTS says mortgage
payment delinquencies are on the decline but foreclosures are on the rise. Yikes Shadow Inventory.
Borrowers who've already had their loan modified are re-defaulting !
READ
MORE
We are going to hear more and more about a "double dip" in housing. Wait what? When did housing start recovering enough to warrant the classification of a double dip? We've seen some stabilization but the business feels the same now as it has over the past 10 months. Slow!
The fact is, purchase business was seasonal (around expirations) at best and borrowers looking to refinance over the last 10 months have been in no huge hurry to close. Mortgage operations haven't been overwhelmed by an onslaught of borrowers as much as they've been delayed by long lists of underwriting approval stipulations that send originators on wild goose chases. Yes business is slow right now, but business has been slow for quite some time!
How much worse can it really get at this point?
The only way mortgage rates move any lower is if global investors really start to believe that an
economic double dip is imminent. Unfortunately, at that point, low mortgage rates
wouldn't mean a darn thing! So I guess I am saying I wouldn't mind seeing mortgage rates increase a few basis points. Anything to avoid seeing the housing market go under a global microscope. Then everyone will know how slow the market has really been over the past 10 months!
Keep your head up everyone. We've seen worse days...
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