U.S. Mortgage Markets Heat Up As Interest Rates and Prices Rise

By SCOTT KIMBLER Potential homebuyers are rushing to mortgage offices to make sure they get a loan before prices and interest rates go even higher. Mortgage rates jumped again to an average of 4.67%, up from last week’s 4.42%, Freddie Mac reported Thursday. At the same time, the spring selling season is looking promising for sellers. Home prices rose 1.84% in February and 19.6% year-over-year – the largest annual gains on record – according to Black Knight’s Monthly Mortgage Monitor Report. These numbers, along with an awkward supply and demand situation, are pushing some buyers who are in a position to do so to go ahead with their home purchase now.  Jerry Stover, sales manager with Homeowners Financial, said this has been…

Consumer Sentiment Down To Its Lowest Point Since 2011

March brought another dip in consumer sentiment, with the University of Michigan’s index registering its lowest level since August 2011. The March index was revised down to 59.4 from a reading of 59.7 two weeks ago. An index of 100 is equal to sentiment in Q1 1966. A year ago at this time, the index was 84.9. Consumer sentiment is now down 41.6 points from its peak in February 2020 and is even below the lows seen in four of the last six recessions.  “When asked to explain changes in their finances in their own words, more consumers mentioned reduced living standards due to rising inflation than any other time except during the two worst recessions in the past fifty…

Morning Roundup (3/25/2022)– Rates, Forbearances Rise

Good Morning! Today is Friday, March 25. The U.S. imposed new sanctions on more than 300 members of Russia’s Parliament. Some journalists have quit jobs at Russian state media outlets, citing regret for promoting lies about the war. Arizona Republicans passed a bill banning most abortions after 15 weeks of pregnancy. The Mortgage Note Reports Rates Rise: Mortgage rates continued their upward march this week, averaging 4.42%. Forbearances Up: Forbearance plans rose for a second week, pushed up by plan re-starts, though new plan starts remained steady. And in other mortgage and housing news… Affordability Down: Homebuyer affordability decreased in February, with the national median payment applied for by applicants jumping 8.3% to $1,653. “We’re Concerned”: Liz Shuler, president of…

Forbearances Increase For Second Week

Forbearance plans rose for a second week, according to Black Knight’s blog, Vision. Overall, forbearances rose by 17,400 (2.4%). Forborne loans held by portfolios and PSLs drove the week with an increase of 7,800 (3.3%). FHA/VA loans saw an increase of 5,000 (3.3%), while GSE plans rose by 4,500 (2%). Black Knight said this week’s numbers “extended their upward trend this week following a typical pattern of increased mid-month restarts.” New plan starts held steady this week at 11,200, though restarts increased by 6,000 to a total of 31,700. Plan volume is down 47,000 (-6%) month-over-month.  The increase this week comes on the heels of a major drop in plans two weeks ago, so rates remain historically low. An analysis…

Rates Break 4% For The First Time Since 2019

Mortgage rates broke 4% for the first time since May 2019, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 4.16%. A year ago at this time, the 30-year FRM averaged 3.09%. “The 30-year fixed-rate mortgage exceeded four percent for the first time since May of 2019,” said Sam Khater, Freddie Mac’s Chief Economist.  “The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year. While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season.” The Federal Reserve raised interest rates by a…

Analysts React To Fed Rate Hike

The Federal Reserve raised interest rates for the first time since 2018 on Wednesday in an effort to combat rising inflation, and economists have mixed feelings about its impact on the housing market. The Consumer Price Index rose 0.8% in February, up 7.9% over the last year, to its highest rate in 40 years. As Americans spend more on less, the impact is becoming apparent. Retail sales rose 0.3% in February, a slowdown in the pace of spending that suggested inflation was taking its toll on American consumers. But while rising prices for gas and groceries may burden American households, it’s things like health insurance and housing that are the “silent killers,” according to Justin Wolfers, University of Michigan professor…

Morning Roundup (2/22/2022)– Rental rates, NJ Foreclosure Funding

Good Morning! Today is Tuesday, February 22. In a speech, Putin laid claim to Ukraine as a country “created by Russia.” Prime Minister Boris Johnson lifted all restrictions in England and announced an end to most free testing. A Biden administration plan to reduce drug deaths will include clean-needle exchanges. The Mortgage Note Reports Rental Rates Up By More Than 15%, Adding To Inflation: Monthly asking rates for rentals increased 15.2% year-over-year in January, and some economists say this is accounting for a significant portion of recent inflation. Foreclosures In New Jersey: $10 Million Set Aside To Help: State officials in New Jersey will use $10 million in federal funding to purchase mortgage notes of homes on the verge of…

Fed’s Bowman Suggests Half-Point Rate Hike In March

Federal Reserve Governor Michelle Bowman said the Fed could hike rates by half a percentage point in March, suggesting the move is necessary to fight inflation. Inflation is currently at a four-decade high, with the Consumer Price Index up 7.5% year-over-year in January 2022. “The nation is dealing with inflation at its highest level in decades, much of it driven by corporate greed and anticompetitive behavior, and the federal government must use every tool available to prevent price gouging and reduce prices for Americans,” Massachusetts Senator Elizabeth Warren wrote in a letter to the Department of Justice, asking it to take action against companies violating antitrust laws to hike prices for consumers.  Bowman said Monday that inflation is “much too high” and suggested…

Loan Applications Up, Though Refis Continue Trending Down

Mortgage loan application volume rose 1.4% from last week, though refinances once again fell, the Mortgage Bankers Association’s (MBA) weekly survey reported. The Market Composite Index, a measure of mortgage loan application volume, increased 1.4%. The seasonally adjusted purchase index rose 2%, while the unadjusted purchase index rose 51% and was 17% lower YOY. The refinance index fell 0,1% and was down 50% YOY. Refinances made up 64.1% of total applications, their lowest level in more than a month. Conventional refi applications are at their lowest level since January 2020. The survey attributed the drop in refinances to increasing interest rates. The 30-year fixed rate reached 3.52%, its highest level since March 2020, and the Fed signaled this week that…

Rates Rise To Highest Level Since May 2020

Mortgage rates rose to their highest level since May 2020, up to an average of 3.22%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.22%, significantly higher than last week’s 3.11%. It disrupts a trend of rates hovering around 3.10% or 3.11%. A year ago at this time, the 30-year FRM averaged 2.65%. “Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” said Sam Khater, Freddie Mac’s Chief Economist.  “With higher inflation, promising economic growth, and a tight labor market, we expect rates will continue to rise. The impact of higher rates…