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 →

Millennials to have a Big Say in 20s’ Residential Real Estate

The novel Coronavirus has come in a year when a good percentage of millennials are turning 30. What this means is that this demographic is stepping into its prime home-buying years in a scary situation. True that 2020 may be a headache-inducing year but looking at the big picture, “millennials may be poised to fuel a ‘roaring 20s’ of homeownership demand”, according to  First American Financial’s Chief Economist, Mark Fleming. Fleming feels that all that the millennials need to do is make the right lifestyle choices.  Not all millennials are serious about buying…continue reading →

Mortgages in Forbearance Up after Falling for Three Weeks

Integrated Technology company Black Knight says that the total mortgages in forbearance have shot up after three successive weeks of decline.  The update on June 23 divulges that the number of mortgages under forbearance ran up to 4.68 million, a clean 83,000 above its tally a week before that.  The Government-sponsored Enterprise (GSE) mortgage (Conforming) forbearance numbers rose to 1.925 million, representing a 1.3% hike. The Federal Administration and Veteran Affairs numbers shot by 3% to 1.509 million. The uncleared forbearance principal balance shot up by 1.28% to $1,025 trillion for June 23.…continue reading →

CFPB Proposes Amending the 43% DTI Cap for QM

According to the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage (QM) rule, all the mortgages that can be eligibly bought by Fannie Mae or Freddie Mac are exempt from the 43% debt-to-income cap. This exemption is referred to as the GSE patch (GSE stands for government-sponsored enterprises). The GSE patch is slated to expire on 10th January 2021. Convinced that both Freddie Mac and Fannie Mae benefit from a competitive advantage in underwriting, CFPB now proposes to extend the GSE patch and also make changes to the definition of QM.  Loans that have…continue reading →

Inventory Shortage May Obstruct Corona-rebound Sales

Aspiring homeowners are likely to come hard once the Coronavirus scare recedes but real estate marketplace Zillow feels that housing inventory shortage may obstruct any possible sales rebound.  Its Weekly Market Report reveals a drop of 17.1% in inventory compared to the same time last year. Over the week, it has fallen by 0.4%. Houses which are on for-sale supply also took a beating in many of the top 35 metros. The figures show a 35% dip in Cleveland, 36% in Seattle, and 34.4% in Philadelphia. To paraphrase Skylar Olsen, Zillow’s senior principal…continue reading →