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…
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…
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…
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…
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…
The Federal Open Market Committee (FOMC) announced it will double the pace of tapering its pandemic asset purchase program, and signaled it would likely raise interest rates next year. This would be its first rate hike since March 2020. The move comes in response to concerns about rising inflation. At its November meeting, the FOMC said it would reduce its purchases of Treasury securities from $80 billion to $70 billion and from $40 billion to $35 billion for mortgage-backed securities. Since then, inflation has reached a 39-year high and become a major sticking point for the American public. As to how this announcement affects the mortgage and real estate industries, analyst response has focused on rising costs. “Increasing mortgage rates…
Good Morning! Today is Monday, December 6. Former Senate Majority Leader and Republican Presidential Nominee Bob Dole died yesterday. He was 98 years old. Bitcoin recovered from a weekend crash that brought its value below $50,000. Omicron may have been spreading at a New York anime convention before cases were officially confirmed in the US. And in mortgage and housing news… Market-Crash Flashback?: Fannie Mae and Freddie Mac have raised their loan limits to nearly $1 million in some communities. Does that mean lenders are repeating the same mistakes which led to the 2008 crash? Analysts React To Omicron: How will Omicron impact the housing market? Analysts are optimistic it won’t cause significant damage. Zillow Bouncing Back: Zillow is recovering…
Investors and economic analysts are closely monitoring Omicron, the Covid-19 variant taking the news cycle by storm, as the country enters the busy holiday season. The question on mortgage professionals’ minds is: how will Omicron affect the housing market? Analysts’ answers are mixed, but the overall trend is cautious optimism. “Right now, we are looking at pretty severe reactions to the omicron news in the stock market,” Tomas Jandik, a finance professor at the University of Arkansas in Fayetteville, told Realtor.com. “The residential market may be more immune to COVID because of what we have already seen in the past waves of the virus.” “It is unlikely that rates will move down any further due to the new Omicron variant,”…
Pending home sales rebounded in October after a September drop, though the year-over-year (YOY) numbers were mild, according to the National Association of Realtor’s (NAR) Pending Home Sales Index. The Index, which is based on contract signings, rose 7.5% to 125.2 in October. An index of 100 is equivalent to the level of contract activity in 2001. However, signings fell 1.4% YOY. “Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still…
Good Morning! Today is Monday, November 29. The new Covid-19 variant, Omicron, may be more contagious among vaccinated people but less deadly overall. Japan, Israel, and Morocco have closed their borders to foreign travelers. Mark Esper is suing the DOD for not clearing his book manuscript for publication due to sections detailing his time working under Donald Trump. And in mortgage and housing news… Build Back Better’s Implications On Housing Prices: The House version of President Biden’s “Build Back Better” plan includes about $170 billion for affordable housing and people are asking what that means. CRA Changes: As the Fed weighs making the Community Reinvestment Act race-specific, what do the data say about CRA loans? Not much. Forbearance Starts Jump: …
