Mortgage rates jumped significantly this week, up to an average of 3.45% from 3.22%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.45%. A year ago at this time, the 30-year FRM averaged 2.79%. “Mortgage rates rose across all mortgage loan types, with the 30-year, fixed-rate mortgage increasing by almost a quarter of a percent from last week,” said Sam Khater, Freddie Mac’s Chief Economist. “This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given…
Fannie Mae’s Home Purchase Sentiment Index (HPSI) fell 0.5 points to 74.2 in December, the GSE reported. Three of the index’s six components fell month-over-month as consumers once again reported pessimistic views on the homebuying market. Year-over-year, the index rose by 0.2.
A record-low 26% of respondents reported they believe it’s a good time to buy a home, while 76% said it’s a good time to sell.
This is a drastic drop from December 2020, when 50% said it was a good time to sell and 52% said it was a good time to buy.
Month-over-month, the share of consumers that reported it’s a bad time to buy a home rose from 64% to 66%, while the net share of…
The Fannie Mae Economic and Strategic Research (ESR) Group boosted its expectation for full-year 2021 economic growth to 5.5% in its December commentary, up 0.7% from November’s projection. The group cited “stronger-than-anticipated consumer spending and inventory investment data” as the reason for its revised projection. Total home sales are now expected to increase 7.1% in 2021 rather than 5.3%. Total mortgage originations are expected to be $4.5 trillion, up from $4.4 trillion. But it also revised its 2022 expectations, downgrading its 2022 growth forecast from 3.7% to 3.2%. Though recent data appears strong, the group noted it “likely reflects a pull-forward of activity from the first half of 2022 and is unlikely to be sustained.” Inflation is the primary reason…
Lenders don’t feel optimistic about their future profit margins, with 65% reporting they believe their profit margins will shrink in the next three months, according to Fannie Mae’s Mortgage Lender Sentiment Survey. The share of lenders who feel pessimistic about future profits rose by 19% from Q3, citing competition from other lenders and changing market trends. If they prove right, next quarter will mark the fifth consecutive quarter of profit declines. “This quarter’s MLSS results suggest that the housing market may be poised to return to a more ‘normal’ state in the new year, following the boom experienced over the past two years due to historically low mortgage rates and pandemic-related changes in homebuyer behavior,” said Fannie Mae Senior Vice…
