rose

Apache is functioning normally

“New home construction is taking on an increased role in the marketplace because many home owners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level,” Alicia Huey, the NAHB chair, said in a statement. “While this is fueling cautious optimism among builders, they continue to face ongoing challenges to meet a growing demand for new construction. These include shortages of transformers and other building materials and tightening credit conditions for residential real estate development and construction brought on by the actions of the Federal Reserve to raise interest rates.” 

Although interest rates have more than doubled since 2021, home builders are still cautiously optimistic about business, something the NAHB attributes to builders’ usage of buyer incentives. However, as sales have picked up this spring and existing home sales remain at record lows, the use of sales inducements from homebuilders has slowed. 

In May, the share of homebuilders reducing home prices dropped to 27%, down from 30% in April and 36% in November 2022, with the average price reduction hovering at 6%, unchanged for the past four months. Additionally, the share of homebuilders offering some type of incentive dropped to 54% in May, compared to 59% in April and 62% last December. 

“Lack of existing inventory continues to drive buyers to new construction,” Robert Dietz, the NAHB’s chief economist, said in a statement. “In March, 33% of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7% average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”

The three other indices monitored by the NAHB rose in May. The gauge measuring current sales conditions rose to 56, up five points month over month. The component analyzing sales expectations for the next six months rose seven points to a reading of 57. Compared to a month prior, the gauge measuring traffic of prospective buyers rose two points to 33. 

Regionally, the three-month moving averages for HMI rose in three out of the four regions, with the West gaining three points to a reading of 41, the South increasing three points to 52, and the Midwest rising two points to a reading of 39. The Northeast held steady month over month at a reading of 45.

Another survey, the BTIG/HomeSphere State of the Industry Report, also reported an improvement in homebuilder outlook.

According to the survey, nearly twice as many builders reported sales that were better than expected (38%), than those who report sales that were worse than expected (20%) in April. In addition, nearly three times as many builders saw traffic as better than expected (42%) versus worse than expected (15%). The share of builders reporting a year over year decrease in sales also shrank to 34% in April, compared to 40% in March. 

The BTIG/HomeSphere study is an electronic survey of approximately 75-125 small- to mid-sized homebuilders that sell, on average, 50-100 homes per year throughout the nation. In April, the survey had 124 respondents.

Like the homebuilder confidence survey, the BTIG survey also found that homebuilders are easing up on buyer incentives. Of the 124 respondents, 17% cut some, most of all prices versus 22% last month, while just 22% of surveyed builders reported increasing some, most or all incentives compared to 27% a month prior. In addition, 30% of homebuilders reported raising some, most or all base prices in April, up from 21% in March.

“New home demand momentum has continued to accelerate throughout the spring season, which is in-line with anecdotal public builder commentary,” Carl Reichardt, a BTIG analyst, said in a statement. “With comparisons for both sales and traffic beginning to ease meaningfully, we expect results should become stronger on a year/year basis next month.”

Source: housingwire.com

Apache is functioning normally

The U.S. had another strong month for employment in June, according to the latest jobs report released by the Bureau of Labor Statistics (BLS) on Friday.

There are some signs of slackening, but not likely enough to satisfy the Federal Reserve and curb a federal funds rate hike later this month.

Key takeaways from the June jobs report:

  • Unemployment remains low. Unemployment declined just slightly from 3.7% in May to 3.6% in June. The unemployment rate has stayed within the range of 3.4% to 3.7% since March 2022.

  • Job growth is slowing. The number of jobs added in June — 209,000 — came in under expectations: Economists polled by Reuters on Thursday estimated 225,000 jobs were added in June. 

  • Prime-age employment reaches another high. The employment rate for prime-age workers 25-54 reached its highest level since 2001. That means a significantly higher portion of the population is currently working compared with the previous two decades.

  • The government is hiring quickly. The majority of job gains were found in both state government (+27,000) and local government (+32,000). The BLS notes that overall, the government has added an average of 63,000 jobs per month so far in 2023, compared with 23,000 jobs per month in 2022.

  • Three industries saw significant job growth: health care (+41,000); social assistance (+24,000); construction (+23,000).

  • Jobs declined in three areas: retail (-11,000); temporary help (-13,000); transportation and warehousing (-7,000).

  • Black unemployment ticks up again. After Black unemployment reached a record-breaking low of 4.7% in April, the rate rose for the second month in a row: 6% in June and 5.6% in May. 

What does this mean for the Federal Reserve?

This slight cooling of employment won’t likely curb the Federal Reserve’s desire to slow down inflation and bring it closer to its target of 2%, especially since the BLS report shows that average wage growth at 4.4% is above the current inflation level of 4%.

After 10 consecutive rate hikes, the Fed paused the federal funds rate at its June meeting. But the minutes from that meeting, which were released on Wednesday, show further tightening by way of rate hikes are likely.

For the Fed’s next meeting on July 26, the futures market’s CME FedWatch tool has a probability of a rate hike at above 90%.

The next jobs report will be released on Aug. 4.

Source: nerdwallet.com

Apache is functioning normally

Mortgage rates are easing today. We did see in the Freddie Mac PMMS today that mortgage rates moved higher for the ninth straight week.

Rates have been expected to climb higher throughout 2018, which is why we’ve been recommending that borrowers lock in a rate sooner rather than later. Read on for more details.

Where are mortgage rates going?                                   

Mortgage rates slide today

News from across the pond that the European Central Bank is no longer saying that they will increase the pace of its bond-buying program if the economic environment deteriorated is affecting U.S. market this morning.

Financial market participants have moved more into bonds as a result, pushing down Treasury yields. The yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) is down about three basis points to 2.85%. Mortgage rates typically move in the same direction as the 10-year yield.

Mortgage Rates Rise in the Freddie Mac Primary Mortgage Market Survey 

The Freddie Mac PMMS got released today at 10am sharp and it showed that mortgage rates rose for the ninth consecutive week. Here are the numbers:

  • The average rate on a 30-year fixed rate mortgage moved up three basis points to 4.46% (0.5 points)
  • The average rate on a 15-year fixed rate mortgage went up four basis points to 3.94% (0.5 points)
  • The average rate on a 5-year adjustable-rate mortgage moved up one basis point to 3.63% (0.4 points)

Here is what the Freddie Mac’s Economic & Housing Research Group had to say about rates this week:

“The 10-year Treasury yield has been bouncing around in a narrow 15 basis point range for the last month. While the yield on the 10-year Treasury is currently below the high of 2.95 percent reached two weeks ago, mortgage rates are up for the ninth consecutive week. The U.S. weekly average 30-year fixed mortgage rate rose 3 basis points to 4.46 percent in this week’s survey, its highest level since January 2014.”

It’s important to note that the data for the PMMS is collected early on in the week and therefore doesn’t necessarily reflect current market conditions. This is true today, as mortgage rates have moved a little lower.

Rate/Float Recommendation                 

Take action soon

Mortgage rates keep on climbing higher. The average rate on a 30-year fixed rate in the Freddie Mac PMMS has now risen fifty-one basis points since the start of the year.

Learn what you can do to get the best interest rate possible. 

Many analysts are calling for another fifty basis point increase by the time 2019 rolls around. If you want to minimize the risk of getting a higher rate and paying more, then you should consider locking in a rate as soon as possible.

Today’s economic data:                                 

Jobless Claims

Applications filed for U.S. unemployment benefits came in at 231,000. That’s up 11,000 from the prior reading (which was a 49-year low).

Notable events this week:                

Monday: 

  • PMI Services Index
  • ISM Non-Mfg Index
  • Fedspeak

Tuesday:    

  • Fedspeak
  • Factory Orders

Wednesday:      

  • Fedspeak
  • ADP Employment Report
  • International Trade
  • Productivity and Costs
  • EIA Petroleum Status Report
  • Beige Book

Thursday:        

  • Jobless Claims

Friday:       

  • Employment Situation for February
  • Fedspeak

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

A sign advertising home mortgage services at a Bank of America branch in Manhattan Beach, Calif.

Patrick T. Fallon | Bloomberg | Getty Images

The average rate on the popular 30-year fixed mortgage hit 7.22% on Thursday, according to Mortgage News Daily. That’s the highest point since early November.

Mortgage rates follow loosely the yield on the 10-year Treasury, which leapt higher following a much stronger-than-expected employment report from ADP.

Rates had already begun rising last week, following signals from Federal Reserve Chairman Jerome Powell that the central bank may continue raising interest rates following a pause in June.

In remarks to Congress just after the June Fed meeting, Powell said the central bank has “a long way to go” to bring inflation back to the 2% goal. The next interest rate decision is on July 26.

The 30-year fixed mortgage rate has now risen 31 basis points in just the past week. For a homebuyer taking out a $400,000 mortgage, the monthly payment of principal and interest rose to $2,720 from $2,637 in just one week.

For sellers, higher mortgage rates have created a so-called golden handcuff effect. The vast majority of homeowners today have mortgages with interest rates below 4% or even below 3%, as rates hit record lows in the first year of the Covid pandemic. They now don’t want to move and have to give up that low rate to buy at a higher rate.

“Recent data indicated that nearly 82% of home shoppers reported feeling locked-in by their existing low-rate mortgage, while around 1 in 7 homeowners without a selling plan cited their current low rate as their reason for remaining on the sidelines,” Jiayi Xu, an economist at Realtor.com, said in a release.

Because of that, there is a currently a critical shortage of homes for sale, with year-to-date new listings now 20% behind last year’s pace.

Source: cnbc.com

Apache is functioning normally

Current mortgage rates are moving sideways today. We got a Consumer Price Index reading that was underwhelming, signaling to investors that the Fed might not be reading to hike rates at an aggressive pace just yet. Our recommendation remains, however, for borrowers to lock in a rate sooner rather than later. Read on for more details.

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Market Outlook 3.12.18 from Total Mortgage on Vimeo.

Where are mortgage rates going?                                         

Mortgage rates hold steady after CPI

It’s another snowy morning here Connecticut. If there’s anything more fickle than mortgage rates, it’s the weather in New England. Anyway, the big economic event for the day was the Consumer Prices Index.

Financial market participants were let down by the average hourly earnings reading in the monthly jobs report for February last Friday, and therefore eagerly anticipating another inflation reading today.

In similar fashion, the CPI reading came in with a mere 0.2% rise from the previous month. Anyone looking for a breakout in inflation was sorely disappointed.

The resulting market reaction was what you would expect, stocks moving higher and Treasury yields moving lower. The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going), dropped down a few basis points right after the report was released.

However, we’ve seen the 10-year yield inch back up to where it started the day since then. Mortgage rates typically move in the same direction as the 10-year yield, so we’re seeing rates just about flat on the day.

Rate/Float Recommendation                   

Lock now before rates move any higher

Mortgage rates have increased dramatically so far in 2018. The end doesn’t seem to be anywhere in sight, either, as many analysts are calling for the 30-year fixed rate to climb all the way up past 5% at some point this year.

Learn what you can do to get the best interest rate possible. 

Given this expectation, the smart decision for most borrowers is going to be to lock in a rate as soon as possible. The longer you wait on a purchase or refinance, the more likely it is you’ll be paying more with a higher rate.

Today’s economic data:                                 

NFIB Small Business Optimism Index 

The NFIB Small Business Optimism Index hit a 107.6. That’s slightly higher than the 107.0 that analysts had expected. This is the second highest level in the history of the reading.

Consumer Price Index 

Consumer Prices ticked up 0.2% from the previous month in February. That puts it up 2.2%, year over year. CPI less food and energy also rose 0.2%, month over month, bringing it to 1.8%, year over year.

Notable events this week:                

Monday: 

  • 10-Yr Note Auction

Tuesday:    

  • NFIB Small Business Optimism Index
  • Consumer Price Index

Wednesday:      

  • PPI-FD
  • Retail Sales
  • Business Inventories
  • EIA Petroleum Status Report

Thursday:        

  • Jobless Claims
  • Philadelphia Fed
  • Empire State Mfg Survey
  • Import and Export Prices
  • Housing Market Index

Friday:       

  • Housing Starts
  • Industrial Production
  • Consumer Sentiment
  • JOLTS

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

A variety of important mortgage rates inched upward over the last seven days. The average interest rates for both 15-year fixed and 30-year fixed mortgages both made gains. For variable rates, the 5/1 adjustable-rate mortgage also rose.

After hiking interest rates 10 times since March 2022, the Federal Reserve pumped the brakes during its June meeting. The central bank’s benchmark federal funds rate will remain at a range of 5.00% to 5.25% for the time being, although the Fed hasn’t ruled out the possibility of further increases if inflation doesn’t continue to moderate.

As long as inflation continues to trend downward, experts say a pause in rate hikes from the Fed could bring some stability to today’s volatile mortgage rate market.

Current Mortgage Rates for July 2023

Mortgage rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Mortgages hit a 20-year high in late 2022, but now the macroeconomic environment is changing again. Rates dipped significantly in January before climbing back up in February. Aside from a brief surge towards the end of May, rates continue to fluctuate in the 6% to 7% range.

Even though the Fed hit pause on rate hikes, mortgage interest rates will continue to fluctuate on a daily basis. That’s because mortgage rates aren’t tied to the federal funds rate in the same way other products are, such as home equity loans and home equity lines of credit, or HELOCs. Mortgage rates respond to a variety of economic factors, including inflation, employment and the broader outlook for the economy.

“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree. “I don’t anticipate them to spike or even show a sustained spike following this meeting,” Channel said.

Overall, inflation remains high but has been slowly, but consistently, falling every month since it peaked in June 2022.

After raising rates dramatically in 2022, the Fed opted for smaller, 25-basis-point increases in its first three meetings of 2023. The decision to hold rates steady on June 14 suggests that inflation is cooling and ongoing rate hikes may no longer be necessary to bring inflation down to the Fed’s 2% target. The central bank is unlikely to cut rates any time soon, but positive signaling from the Fed and cooling inflation may ease some of the upward pressure on mortgage rates.

“Rates are getting to a point of being steady. So, it’s more a question of how long it will take for rates to start ticking back down and when inflation will return to a place where your dollar starts buying a little bit more each month,” said Kevin Williams, founder of Full Life Financial Planning.

However, mortgage rates remain well above where they were a year ago. Fewer buyers are willing to jump into the housing market, driving demand down and causing home prices in some regions to ease, but that’s only part of the home affordability equation.

“Interest rates have been much higher in the past and people bought homes and financed homes at those rates. But it’s been hard for people to react to such a rapid increase in just a short amount of time,” said Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University. “Everybody had a target for how much they needed to save in order to go into the housing market, but when interest rates increased, those goal posts moved too,” he added.

What does this mean for homebuyers this year? Mortgage rates are likely to decrease slightly in 2023, although they’re highly unlikely to return to the rock-bottom levels of 2020 and 2021. However, rate volatility may continue for some time. “Expect mortgage rates to yo-yo up and down in the first half of the year, at least until there is a consensus about when the Fed will conclude raising interest rates,” said Greg McBride, CFA and chief financial analyst at Bankrate. McBride expects rates to fall more consistently as the year progresses. “Thirty-year fixed mortgage rates will end the year near 5.25%,” he said.

Rather than worrying about market mortgage rates, homebuyers should focus on what they can control: getting the best rate they can for their situation.

“The most important thing is that they find the right home. The second most important thing is obviously to find the most efficient way to finance it,” said Melissa Cohn, regional vice president of William Raveis Mortgage.

Take steps to improve your credit score and save for a down payment to increase your odds of qualifying for the lowest rate available. Also, be sure to compare the rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you compare apples to apples.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 7.31%, which is an increase of 14 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.59%, which is an increase of 9 basis points from seven days ago. You’ll definitely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You’ll usually get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 6.17%, an uptick of 10 basis points compared to a week ago. For the first five years, you’ll usually get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM could be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market could significantly increase your interest rate.

Mortgage rate trends

Mortgage rates were historically low throughout most of 2020 and 2021 but increased steadily throughout 2022. Now, mortgage rates are roughly twice what they were a year ago, pushed up by persistently high inflation. That high inflation prompted the Fed to raise its target federal funds rate seven times in 2022. By raising rates, the Fed makes it more expensive to borrow money and more appealing to keep money in savings, suppressing demand for goods and services.

Mortgage interest rates don’t move in lockstep with the Fed’s actions in the same way that, say, rates for a home equity line of credit do. But they do respond to inflation. As a result, cooling inflation data and positive signals from the Fed will influence mortgage rate movement more than the most recent 25-basis-point rate hike.

We use data collected by Bankrate to track changes in these daily rates. This table summarizes the average rates offered by lenders across the US:

Average mortgage interest rates

Product Rate Last week Change
30-year fixed 7.31% 7.17% +0.14
15-year fixed 6.59% 6.50% +0.09
30-year jumbo mortgage rate 7.34% 7.20% +0.14
30-year mortgage refinance rate 7.41% 7.27% +0.14

Rates as of July 7, 2023.

How to shop for the best mortgage rate

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. In order to find the best home mortgage, you’ll need to take into account your goals and overall financial situation.

Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good credit score, a higher down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.

Beyond the mortgage interest rate, other factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. Make sure to shop around with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage that’s the right fit for you.

What is a good loan term?

One important thing you should consider when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are the same for the duration of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (typically five, seven or 10 years), then the rate changes annually based on the market interest rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your house. For those who plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don’t have plans to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Be sure to do your research and think about your own priorities when choosing a mortgage.

Source: cnet.com

Apache is functioning normally

Consumer confidence in housing may have plateaued, according to the latest home purchase sentiment index (HPSI) by Fannie Mae.

The HPSI — which tracks the housing market and consumer confidence to sell or buy a home — rose a mere 0.4 points to 66 as difficult supply and affordability conditions continue to weigh on the housing market, according to Fannie Mae. The full index is up 1.2 points year over year.

While most of the HPSI’s six components were little changed month over month, survey respondents did report that homebuying conditions improved slightly in June compared to May. 

About 22% of respondents said it is a good time to buy a home in June, up from 19% in the previous month. 

“Confidence in the housing market appears to have plateaued at a relatively low level, suggesting that many consumers may be coming to terms with elevated mortgage rates and high home prices,” said Doug Duncan, Fannie Mae senior vice president and chief economist.

​​The percentage of respondents who say home prices will go up in the next 12 months decreased to 36% in June from the previous month’s 39%. About 16% expect mortgage rates to go down in the next 12 months, declining from May’s 19%.

“A larger share of respondents think mortgage rates will stay the same over the next year, whereas mid-to-late last year, most thought rates would continue going up. This seems to signal that consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future,” Duncan noted.

Even so, about 78% believe it’s a bad time to buy a home – continuing a trend of pessimism towards buying since mid 2021. 

Fannie Mae expects ongoing affordability constraints and lack of housing supply are projected to slow down home sales in the second half of the year. 

The new home sales market, which has been increasing steadily over the past three months, is a silver lining in the sluggish housing market. 

Housing starts rose 21.7% in May from April and sales of new homes increased 12.2% during the same period.

The Mortgage Bankers Association expects the total existing home sales to decline to 4.3 million in 2023 from last year’s 5.1 million while new home sales to rise to 676,000 from the previous year’s 641,000.

Source: housingwire.com

Apache is functioning normally

The Community Home Lenders of America (CHLA) sent a letter to U.S. Rep. John Rose (R-Tenn.) this week that applauds the introduction of a bill to ban mortgage trigger leads outside of certain situations.

The bill, House Resolution (H.R.) 4198, the “Protecting Consumers from Abusive Mortgage Leads Act,” would prohibit trigger leads for mortgages unless one of two criteria are met: either a consumer has given their permission; or “a third party has submitted documentation to such agency certifying […] a current relationship, relating to credit, servicing or other financial services.”

“CHLA applauds you for introducing legislation to enhance consumer protections with respect to so-called trigger leads,” the letter states. “We hope that your introduction of this bill will lead to more rigorous debate in Congress and among federal regulators regarding the best solution to combat abusive trigger leads when a credit report is pulled in order to obtain a mortgage loan pre-qualification or a mortgage loan.”

Trigger leads are essentially mortgage customer leads that are sold by credit bureaus to lenders. When a potential borrower gives a lender permission to pull their credit for a mortgage loan, the lender uses certain codes to identify the purpose of the hard credit pull. Those codes signal to the credit bureaus that a consumer is inquiring about a mortgage, which triggers a potential lead that the credit bureaus then sell to other lenders.

But while the CHLA applauded Rose, the letter outlines suggested amendments to a few of the bill’s provisions, including its third-party submission proposal; eligibility standards saying that “any” financial firm with a current relationship to the consumer be notified of a pulled credit report; and the ways in which a consumer would notify their lender about opting out of trigger leads.

The CHLA letter also makes suggestions for trigger lead eligibility revisions under the bill, including “making a lender that previously originated a loan for that consumer eligible to engage in loan solicitations — and removing eligibility for firms like payday lenders and for banks with non-mortgage relationships with the mortgage loan applicant.”

The bill was introduced into the U.S. House Financial Services Committee in mid-June and is awaiting debate. If the bill is favorably advanced out of committee, it can then be deliberated in the House.

Source: housingwire.com

Apache is functioning normally

The Freddie Mac Primary Mortgage Market Survey this week is showing mortgage rates moving lower for the first time in 2018. With rates on the decline (for now) we strongly recommend that anyone looking to purchase a home or refinance their current mortgage takes action soon. Read on for more details.

Where are mortgage rates going?                                         

Rates fall in Freddie Mac PMMS

It’s Thursday after 10:00am, so that means that the Freddie Mac Primary Mortgage Market Survey got released. We’ve got a notable report out this week, with mortgage rates falling for the first time in 2018. Here are the numbers:

  • The average rate on a 30-year fixed rate mortgage fell two basis points to 4.44% (0.5 points)
  • The average rate on a 15-year fixed rate mortgage fell four basis points to 3.90% (0.5 points)
  • The average rate on a 5-year adjustable rate mortgage increased four basis points (0.4 points)

Here is what the Freddie Mac Economic and Housing Research Group had to say about mortgage rates this week:

“Tuesday’s Consumer Price Index report indicated inflation may be cooling down; headline consumer price inflation was 2.2 percent year-over-year in February. Following this news, the 10-year Treasury fell slightly. Mortgage rates followed Treasurys and ended a nine-week surge. The U.S. weekly average 30-year fixed mortgage rate fell 2 basis points to 4.44 percent in this week’s survey, its first decline this year.”

It’s always important to note that data for the survey was collected early on in the week and therefore doesn’t necessarily reflect current market conditions.

The downward trend has not reversed itself quite yet, though, and has actually continued throughout the week. Yesterday’s soft Producer Prices and Retail Sales readings certainly played a part in keeping rates lower.

If we take a look at the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, we can see that it’s down to 2.81% right now.

That’s nine basis points below is highest position of the week on Monday. Mortgage rates typically move in the same direction as the 10-year yield, so rates are even lower right now than in the PMMS.

Rate/Float Recommendation                     

Lock now before rates push higher

Mortgage rates are on track to finish out the week lower for the first time in 2018. This is obviously great news for anyone looking to buy a home or refinance their current mortgage.

We strongly recommend that you take action now while rates are low because the long-term trend remains for rates to move considerably higher; many analysts are still calling for the 30-year fixed rate to move above 5% sometime this year.

It really only takes a few minutes online or a quick phone call to one of our experienced mortgage professionals to get started.

Learn what you can do to get the best interest rate possible. 

Today’s economic data:                                  

Jobless Claims

Applications for U.S. unemployment benefits came in at 226,000 for the week of 3/10/18. That puts the 4-week moving average at 221,500. This is a drop of 4,000 for new claims, which points toward strength in the labor market.

Philadelphia Fed 

The Philly Fed’s general business conditions index hit a 22.3 in March. That’s below the prior reading but the details of the report are incredibly strong, with new orders and unfilled orders coming in hot.

Empire State Mfg Survey 

The Empire State General Business Conditions Index also posted a strong reading this morning, coming in at 22.5. That’s well above the 15.0 that analysts had expected.

Import and Export Prices 

Import prices ticked up 0.4% from the previous month in February, putting them at 3.5%, year over year. Export prices rose 0.2%, month over month, bringing the year over year change to 3.3%.

Housing Market Index 

The Housing Market Index for March hit a 70. That’s still a positive reading but it is a little below the 72 that analysts had expected.

Notable events this week:                

Monday: 

  • 10-Yr Note Auction

Tuesday:    

  • NFIB Small Business Optimism Index
  • Consumer Price Index

Wednesday:      

  • PPI-FD
  • Retail Sales
  • Business Inventories
  • EIA Petroleum Status Report

Thursday:        

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Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally


Washington
CNN
 — 

US mortgage rates jumped higher last week as uncertainty about the debt ceiling standoff sent bond yields rising.

The 30-year fixed-rate mortgage averaged 6.79% in the week ending June 1, up from 6.57% the week before, according to data from Freddie Mac released Thursday. Rates jumped higher last week for the third week in a row. A year ago, the 30-year fixed-rate was 5.09%.

Mortgage rates tend to be pegged to US Treasury yields, which had been heading higher as America grows ever closer to default. A deal to raise the debt ceiling and avoid default is moving forward after a bill to suspend the nation’s debt limit through January 2025 overwhelmingly passed in the House.

A little over a year ago mortgage rates topped 5% for the first time since 2011 and have remained over 5% for all but one week during the past year. Since then they have gone as high as 7.08%, last reached in November. Since mid-March, rates have gone up and down but have stayed under 6.5%. Until a week ago when they tipped over 6.5%.

In addition, data shows the economy is strong, resurfacing concerns about inflation remaining too high and raising the prospect of another rate hike at the Federal Reserve’s June meeting. Although the Fed doesn’t have direct control over mortgage rates, higher interest rates tend to push bond yields higher, which also can nudge mortgage rates up.

“Mortgage rates jumped this week as a buoyant economy has prompted the market to price-in the likelihood of another Federal Reserve rate hike,” said Sam Khater, Freddie Mac’s chief economist. “Although there has been a steady flow of purchase demand around rates in the low to mid six percent range, that demand is likely to weaken as rates approach seven percent.”

A strong economy and debt ceiling standoff push rates up

The rate for a 30-year mortgage climbed this week as the debt ceiling standoff remained uncertain for much of this week.

“The fear of debt default affects mortgage rates through government-backed bonds,” said Jiayi Xu, and economist at Realtor.com. “If the U.S. defaults on its debt, bond investments become riskier, resulting in increased yields and potentially higher mortgage rates. With a debt deal pending, the likelihood of default remains very low.”

Once the deal is signed by President Joe Biden, the U.S. government is expected to quickly increase issuance of Treasury bills, said Xu. This, “has the potential to cause short-term liquidity challenges at banks, as businesses and households may reallocate their funds towards higher-yielding and relatively safer government debt.”

“In order to keep attracting depositors, banks might be compelled to raise interest rates, thereby squeezing profit margins,” she said. “This could lead to further rate increases across various loan products offered by banks, including both business loans and personal loans.”

However, the debt ceiling standoff isn’t the only thing troubling the markets or the economy.

Economic data this week highlight continued strength in the economy, said George Ratiu, chief economist at Keeping Current Matters.

The number of job openings rose in April to 10.1 million, exceeding market expectations and 3.8 million employees left their jobs during the month, with many finding better opportunities.

“Markets are keeping a close eye on Friday’s payroll employment report, looking for additional cues about the labor landscape,” Ratiu said. “The data are expected to inform the Federal Reserve’s rate decision at the June meeting.”

A cooler spring home selling season this year

Fewer homes to buy and higher interest rates are making for a cooler spring market than typical.

Mortgage applications declined for the third straight week, as higher rates, ongoing economic uncertainty, and declining affordability continue to dampen borrower demand, according to the Mortgage Bankers Association.

“The lack of homes for sale remains a headwind for the housing market this year, leading to elevated home prices and households deciding to delay buying a home,” said Bob Broeksmit, MBA president and CEO.

But if mortgage rates remain elevated, sellers looking to wrap up a move during the summer months may be motivated to cut prices.

“We may see a potential decrease in asking prices during the upcoming summer season,” said Xu.

While a decline in home prices would be welcome to first time home buyers who lack existing equity to leverage, said Xu, it could potentially erode some of the equity of current homeowners and pose risks to the financial system.

“However, thanks to today’s near-record high home equity levels, even in the event of a substantial 10% decline in home values from their level at the end of the fourth quarter, whether occurring suddenly or over two years with a climbing mortgage debt – this is an incredibly unlikely scenario,” Xu said. “Home equity as a share of total real estate value would still exceed 60%, offering a significant cushion for existing homeowners in aggregate.”

Source: cnn.com