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Pending Home Sales Index Posts Surprising Numbers

Riding on the declining mortgage rates, pending home sales have come around really well, beating all expectations. This further asserts that the housing market is the only silver lining in the Coronavirus-affected economy.  The National Association of Realtors  (NAR) has an index that puts the contract signings into perspective. According to it, the signings to buy previously owned houses have shot up 16.6% once again, building on the excellent show in May (44.3% rise). Lawrence Yun, the chief economist for NAR is surprised. In his statement, he suggested, “It is quite surprising and…continue reading →

Not since 2008 has the Homeownership Rate been this High

The rate of homeownership in America has reached a level untouched since 2008. Spearheaded by the young population, the housing boom that had been stalled by the Coronavirus seems to have found its feet back. The Census Bureau puts the Q2 rate at 67.9%. This is the fourth quarterly increase in succession, building on the 65.3% posted in Q1. Young buyers, specifically those below 35 years have registered a homeownership rate of 40.6%, which is the highest it has been in the last 12 years.  It is not hard to recall that businesses…continue reading →

Forborne Mortgage Numbers Drop Again; Albeit at a Lower Rate

The number of mortgages hitting forbearance has come down for a 6th consecutive week. The speed of fall has slowed down though. Forbearances triggered by the Coronavirus declined by 6 basis points  (7.8% to 7.74%) between 13th and 19th July, confirms the Mortgage Bankers Association. For the independent mortgage providers, the loans sitting in forbearance climbed to 7.85% from 7.83%. The MBA’s senior vice president (and chief economist) Mike Fratantoni suggested, "Although the GSE portfolio of loans in forbearance should continue to improve, Ginnie Mae's portfolio saw an uptick of both loans in…continue reading →

Mortgage Rates Up After Falling for 6 Weeks

Having fallen below 3% for the first time since Freddie Mac started recording, the mortgage rates have risen above 3% once again, thus arresting a fall which began 6 weeks ago. At this point, it is only symbolic though. From 2.98% on July 16, we are at 3.01% (July 23). On the year-to-year chart, the 30-year fixed-rate mortgage traded at 3.75%. To quote Freddie Mac’s chief economist, Sam Khater, "While housing demand continues to rebound, the month-long swoon in economic activity has caused the 10-year Treasury benchmark to drop," He added, "In the…continue reading →

In a First, Mortgage Rates Fall Below 3%

For the first time in the last 50 years, the mortgage rates for the 30-year fixed-rate loan have come below 3%. Freddie Mac reveals that the rates sat at 2.98% for the week closing on July 16. On the year-to-year chart, it is a 22% decline.   Unsurprisingly, the rate drop has raised the demand for homes and the meager rates have been "capitalized into asset prices in support of the financial markets," divulges Freddie Mac's chief economist, Sam Khater. Things might still get tight though, thinks Khater, if the reemergence of Covid-19 cases…continue reading →

Strengthened by Refinance Volume, Mortgage Applications Shoot Up

The 5.1% week-to-week hike in mortgage applications has piggybacked largely on robust growth in the volume of refinancing. The MBA's Weekly Mortgage Applications Survey (for the week closing on 10th July) reveals that the refinance index has more than doubled on the year-to-year chart and shot up 12% on the week-to-week chart. The weekly result has been adjusted for the 4th of July.  From 60.1% a week prior, refinance levels have hiked to total application’s 64.2% this week. To paraphrase Joel Kan, the MBA's associate vice president of economic and industry forecasting, the…continue reading →

Mortgage Forbearance Sees Biggest Drop Since Cares Act Became a Law

A significant part of active forbearance plans slated to expire in June has not been extended, leading to the biggest weekly drop  (435,000) in the volume of mortgage borrowers under forbearance.  Andy Walden, Black Knight’s Economist and Director of Market Research, suggested that "this latest decline in the number of homeowners in active forbearance is an encouraging sign of continued improvement". Notably, those servicing government-guaranteed loans were asked for by the government relief stimulus to grant residential borrowers an extension of forbearance, in case they asked for it.  For the week ending June…continue reading →

Mortgage Forbearances Register Biggest Dip

The Mortgage Bankers Association reveals that the coronavirus-related mortgage forbearance growth had its biggest drop of 8 basis points over the June 22-June 28 week. For the last week of June, nearly 4.2 million mortgages were under forbearance; this is 8.39% of the total loans outstanding. The percentage is less than 8.47% posted a week prior. For the banks servicing independent mortgages, forbearance loans fell from 8.42% to 8.33%. Mike Fratantoni, Senior Vice President and Chief Economist of MBA, suggested that the forbearance numbers are only expected to come down, now that the…continue reading →

Record-High Home Equity Levels Left Unused in Q1

Despite exceedingly low interest rates, a very limited number of borrowers pulled cash out of their houses in Q1. This led to a record-high for the dollar value of usable home equity, reports Integrated Technology firm, Black Knight.  The mind goes back to the housing boom when homeowners tapped their equity to buy cars and fund vacations. When the market crashed, many such owners were left with no equity at all in their homes. There is enough evidence to believe that many still fear cash-outs due to the memory of those days. Cash-out…continue reading →

Mortgage Rates May Not Have Hit Bottom Yet

While the mortgage rates have never come down as low since Freddie Mac started in 1971 with its Primary Mortgage Market Survey, there is a good chance we haven’t seen the bottom yet.  Freddie Mac’s Chief Economist, Sam Khater, feels that in the final few months, the 30-year fixed-rate mortgage could come down in a deficit of 3%. For the week ending June 25, the average for ‘30-year’ was 3.13%. It fell to 3.07, a week later. On the year-over-year chart, the 30-year fixed-rate mortgage has seen a 16% decline. The fall in…continue reading →