Mortgage Rates Hold Steady at 2.87%

Mortgage rates held steady despite a tug-of-war between economic recovery and the fiscal impact of rising Covid-19 cases, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS®). The 30-year fixed-rate mortgage averaged 2.87 percent with an average 0.6 point for the week ending August 26, 2021, up slightly from last week’s 2.86 percent. A year ago at this time, the 30-year FRM averaged 2.91 percent. The 15-year fixed-rate mortgage averaged 2.17 percent with an average 0.6 point, up slightly from last week when it averaged 2.16 percent. A year ago at this time, the 15-year FRM was 2.46 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.42 percent with an average 0.2 point, down slightly from last week when…

LA Eviction Moratorium Upheld By 9th Circuit Court

The 9th Circuit Court of Appeals upheld Los Angeles’ COVID-19 eviction moratorium, rejecting an effort by Southern California’s largest landlord organization to reverse the restriction. The Apartment Association of Greater Los Angeles sued the city on June 11, 2020, challenging the eviction ban, prohibitions on late fees and interest on unpaid rent, and moratorium on annual rent increases. AAGA consists of 55,000 rental property owners and managers. Judge Daniel Aaron Bress wrote for the three-judge panel that upheld the moratorium, writing “the moratorium’s provisions were likely ‘reasonable’ and ‘appropriate’ given the circumstances of the COVID-19 pandemic” and adding that there was “no apparent basis” on which the moratorium violates the U.S. Constitution’s Contracts Clause, as the landlord association alleged. The clause…

Investigation Finds Freddie and Fannie Algorithm Negatively Impacts Borrowers of Color

An investigation by The Markup found that lenders in 2019 were more likely to reject loan requests from people of color than white people, even if their finances looked much the same. The Markup examined more than 2 million conventional mortgage applications using statistical analysis that held 17 factors steady to account for explanations traditionally used to explain racial disparities in lending: the borrower’s credit history, debt-to-income (DTI) ratio and loan-to-value (LTV) ratio. According to The Markup, the bias was evident in the credit scoring algorithm “Classic FICO,” which was developed in the 1990s. Fannie and Freddie require lenders to use Classic FICO to determine whether an applicant meets their minimum threshold. Classic FICO focuses on traditional credit but does…

Mortgage Applications Up 1.6% Last Week

The Mortgage Bankers Association (MBA) reports mortgage applications increased 1.6 percent during the week ending August 20, 2021. They also report the Refinance Index increased 1 percent from the previous week and was 3 percent higher than the same week one year ago. Refis accounted for 67.3 percent of total applications, no change from the week before, while adjustable-rate mortgages fell to 3.1 percent of total applications.   Lower rates led to an increase in refinance applications, with government loan applications jumping 10 percent to the highest level since May 2021,” said MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan. As for the housing market as a whole, Kan says there may be signs of cooling. “There was…

Mortgage Refinancing Sees a Boost After FHFA Fee Repeal

Mortgage refinancing exploded in July, according to mortgage data analyst Black Knight.  The report shows rate lock volume, the number of borrowers who locked in their mortgage rate, jumped by 5.5% in July. Rate/term refinance grew 24% month-over-month, while cash-out refinance grew 20%. The Federal Housing Finance Agency (FHFA) decided in mid-July to remove the adverse market refinance fee put in place in 2020. The 0.5% fee was intended to alleviate any future financial burden placed on Fannie Mae and Freddie Mac by the effects of the pandemic. Instead of a downturn, the housing market soared. The boom in refinancing is directly linked to the FHFA’s decision to reverse course. And now “[r]efinance volumes were undoubtedly boosted” by its repeal, Black Knight…

Texas and Arizona Dominate 2021’s Best Real-Estate Markets

Texas and Arizona dominated top spots in WalletHub’s report on 2021’s best real-estate markets. Half of the top ten markets were in Texas, with Frisco, TX taking the number one spot. Five of the top thirty cities are in Arizona. WalletHub used two dimensions for the ranking: real-estate market data, such as median home prices, median days on the market, and number of seriously underwater mortgages; and economic environment data, such as job growth rate and housing affordability. The number of pending sales in Frisco, a suburb of Dallas-Fort Worth, rose by 42% from May 2020 to May 2021. High demand and low inventory forced Frisco’s median sale up by nearly 24% in the same time. The fourth, fifth, and sixth-ranked cities are also…

Are Private-Label Mortgages Making a Comeback?

Private-label mortgages, blamed by some for helping cause the Great Recession of 2008, are on the rise, accounting for 4% of mortgage bonds issued last quarter were private-label mortgages according to the Wall Street Journal. Private-label mortgages are packaged and sold to investors without the guarantees of payment provided by Freddie Mac or Fannie May, and were pivotal in the last financial crisis. The private-label market had more than $42 billion of issuance in the second quarter, more than almost any quarter since 2008. The left-leaning Center for American Progress says private-label lending fed the private-label securities market (PLS) which in turn caused the 2008 market crash. Defenders of the mortgages note private-label mortgage loans are made to people who can’t…

Existing Home Sales Up 2% in July

Existing-home sales rose 2% on a seasonally adjusted annual rate from June to July, with first-time buyers accounting for 30% of sales, according to a report from the National Association of Realtors®. This marks two consecutive months of increases in home prices. There were no sales declines in any region, with two of the four major U.S. regions seeing gains, while one declined and one was unchanged. Existing home sales, including single-family homes, townhomes, condominiums and co-ops, increased 1.5% from July 2020, up from 5.90 million to 5.99 million. Another sign it’s a sellers market: 89% of homes sold within a month of being put on the market. NAR’s chief economist Lawrence Yun acknowledged that many of the sales remain…

Report: Delinquencies Edge Closer to Pre-Pandemic Levels, But 1.45M Remain Seriously Past Due

The data and analytics company Black Knight reports the July’s numbers show the national mortgage delinquency rate dropped 5 percent in July and is now approaching pre-pandemic levels. However, about 1.45 million borrowers remained 90 or more days past due – though not yet in foreclosure – more than 1 million more than at the onset of the pandemic. “Delinquencies have now improved in 12 of the last 14 months, with the two monthly increases being calendar-related as opposed to being indicative of worsening performance,” the company reports. Their analysis follows last week’s news that the number of homeowners exiting mortgage forbearance is up. The “total number of loans now in forbearance decreased by 14 basis points from 3.40% of…

Mortgage Rates Remain Low, Steady as Supply Remains Low

Mortgage interest rates are remaining low and steady week-over-week, holding firm amid low supply and uncertain expectations about the overall direction the housing market is taking. Rates barely budged compared to last week, according to Freddie Mac’s weekly rate survey, with 30-year, 15-year and 5/1 ARM rates all moving no more than one basis point up or down: The 30-year rate dropped one basis point to 2.86 percent, while the 15-year rate went up one point to 2.16 percent and the 5/1 ARM dropped one point to 2.43 percent. “Mortgage rates stayed relatively flat this week,” Freddie Mac Chief Economist Sam Khater said in the press release. “Housing is in a similar phase of the economic cycle as many other…