Has The Predicted Surge In Mortgage Rates Begun?

By Elise Daniel Interest rates jumped to 2.97 percent last week, the highest they’ve been in six months. On its own, the increase is not significant—but it may actually be monumental if it is the beginning of a rate surge that has been long predicted. If the historic decline in rates that we have been experiencing has finally reached its bottom, then today’s rates may be the lowest available for months, and maybe years, to come. But if the surge doesn’t arrive and this week’s minor increase is just a predictable blip, then the frenzy will have been overblown. One market watcher has said that a “perfect storm is brewing,” but as any meteorologist knows, prediction is always a hard game. Market prediction…

Fannie Mae Reports $11.8B In Net Income

Fannie Mae released its 2020 financial results Friday, reporting $11.8 billion in net income for the year and $4.6 billion in the fourth quarter. Fannie’s net worth climbed to $25.3 billion at the end of the year, up from $14.6 billion at the end of 2019. The company reported providing a record $1.4 trillion in liquidity to single-family and multifamily mortgage markets. That includes 3.4 million refinanced loans amid historically low interest rates. “2020 presented the nation with an historic test and Fannie Mae rose to the challenge, delivering a record $1.4 trillion in mortgage liquidity to meet home purchase, refinancing, and rental housing needs,” Chief Executive Officer Hugh R. Frater said.…

Freddie Mac Reports $7.3B In Net Income

Freddie Mac on Thursday announced net income of $7.3 billion for 2020, up $100 million from the year before as the housing market surged amid pandemic-induced record low interest rates. Freddie Mac also reported: Net worth increased to $16.4 billion, from $9.1 billion at the end of 2019. Net income of $2.9 billion and comprehensive income of $2.5 billion in the fourth quarter, up $400 million and $100 million, respectively, from the prior quarter, driven by a reserve release due primarily to realized house price growth during 4Q 2020. “In 2020, Freddie Mac continued to serve the important role for which it was founded: supporting the housing market in all economic conditions. In the face of extraordinary economic uncertainty caused…

Waters Opposes Calabria’s Fannie, Freddie Goals

Mark Calabria wants to pull Fannie Mae and Freddie Mac from conservatorship by the time President Trump leaves office next month. Not so fast, says Rep. Maxine Waters. The chairwoman of the House Financial Services Committee sent Calabria a letter last week urging him to “fully engage with Congress, halt all efforts to raise the capital requirements for Fannie Mae and Freddie Mac and halt all efforts to release them from conservatorship.” “I believe that it is entirely inappropriate for you and your agency to be focusing on releasing the Enterprises from conservatorship during the pandemic with the assistance of a lame duck Treasury Secretary,” Rep. Waters wrote. “At the very least, the Congress and the American public deserve transparency…

Calabria Seeks To End Conservatorship By Jan. 20

Federal Housing Finance Agency Director Mark Calabria is trying to pull Fannie Mae and Freddie Mac out of conservatorship before the Trump Administration ends on January 20, the Wall Street Journal reported. Mark Calabria, a libertarian economist who heads the Federal Housing Finance Agency, has made it a priority to return Fannie and Freddie to private hands, a goal shared by Mr. Mnuchin. How that is done could affect the cost and availability of mortgages backed by the companies, which guarantee roughly half of the $11 trillion in existing home loans. Completing the complex process before President Trump’s term ends on Jan. 20 is a long shot, and President-elect Joe Biden is considered unlikely to continue the effort. But Messrs.…

Refinancing Surge Drives Huge Increase In Mortgage Applications

Everyone is refinancing. Mortgage applications increased 55.4 percent last week from a week earlier, driven by overwhelming demand to refinance, the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. More than 76 percent of those applications came from homeowners seeking to refinance. “Market uncertainty around the coronavirus led to a considerable drop in U.S. Treasury rates last week. … Homeowners rushed in, with refinance applications jumping 79 percent – the largest weekly increase since November 2008,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. The 30-year fixed rate is at its lowest level since 2012. Other findings in the report include: The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a…

Report: January New Home Sales Jump 18.6% For Year; Highest Level Since 2007

Sales of new single-family homes increased by 7.9 percent in January over a month earlier – and 18.6 percent above January 2019, according to estimates released Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development. The federal report estimated that 764,000 new single-family houses were sold last month – up from 708,000 in December and 644,000 in January 2019. It is the highest level since since July 2007. The report also found: The Midwest notched a 30.3 percent increase over December and a 47.8 percent increase over January 2019.The West came in with a 23.5 percent increase for the month and a 49.1 percent increase from a year earlier.In the Northeast, home sales were up…

Survey: 45% of Americans Plan To Move This Decade

Americans are looking to get their move on during the 2020s. A new survey finds that 45 percent of homeowners have plans to move during the coming decade – with 16 percent saying they plan to move within their city, 15 percent heading off to a new city within their state and another 15 percent moving to a new state. An additional 22 percent of homeowners aren’t sure on of their moving plans, according to the survey of 1,552 Americans commissioned by LendingTree. What’s motivating these plans? The top three drivers were: Moving to an area with a lower cost of living (30 percent)Moving to an area with better job prospects (28 percent)Moving to be closer to their children (21…

Census, HUD Report: New Housing Permits Soar in January

Housing starts fell slightly in January, while new permits jumped to a nearly 13-year high, reflecting a sustained strong housing market in the United States. Building permits in January increased by 9.2 percent above the revised December rate of 1,420,000 – and was 17.9 percent above the January 2019 rate, according to a monthly report released by the Census Bureau and the Department of Housing and Urban Development. Housing starts in January were at a seasonally adjusted rate of 1,567,000 – or 3.6 percent below the revised December rate but still 21.4 percent above the January 2019 rate. “The latest month’s decline in housing starts is nothing to be concerned about,” said Lawrence Yun, chief economist for the National Association of Realtors.…

Builders Have Historically High Confidence in Housing Market

Reflecting a strong market and low interest rates, builder confidence in the housing market remained high though slightly lower this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released Tuesday. Builder confidence dropped a point in February to 74, a number reflects nearly historically high confidence in the housing market. “Steady job growth, rising wages and low interest rates are fueling demand but builders are still grappling with increasing construction and development costs,” NAHB Chairman Dean Mon said in a news release. The NAHB/Wells Fargo HMI measures builder perceptions of current single-family home sales and expectations for sales over the next six months as “good,” “fair” or “poor.” Any number over 50 indicates that…