Mortgage rates fell this week as global market concerns resurfaced and government bond yields moved lower. Meanwhile, more data shed light on the housing market's strengthening recovery.
Sales slow down, prices inch up
Sales of existing homes fell from a downwardly revised, seasonally adjusted annual rate of 5.58 million in July to 5.31 million in August, which amounts to a 4.8% decrease, according to data released this week from the National Association of Realtors.
However, the August rate is 6.2% higher than the same time last year.
"The housing report may be viewed as negative, but I think we can dismiss the decline as being a normal down after several ups," says Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Also released this week was the Federal Housing Finance Agency's monthly house price index. Prices increased 0.6% on a seasonally adjusted basis from June to July, and were up 5.8% from July 2014.
2015%30-year fixedJulAugSept4.004.104.20
30 year fixed rate mortgage -- 3 month trend
Yields take a tumble
U.S. Treasury yields continued falling this week following the Federal Reserve's decision last week to hold off raising the federal funds rate.
"We did see a pretty decent drop in the 10-year (Treasury yield), which has a high correlation to where mortgage rates are priced," says Bryan Sullivan, chief investment and strategy officer at loanDepot in Foothill Ranch, California.
Falling oil prices and China's ongoing economic turmoil added to the demand for government bonds, MarketWatch reported Tuesday. With bonds, yields fall as prices rise.
A look at this week's rates
The benchmark 30-year fixed-rate mortgage fell to 4% from 4.06%, according to Bankrate's Sept. 23 survey of large lenders. A year ago, it was 4.3%. Four weeks ago, the rate was 4.03%. The mortgages in this week's survey had an average total of 0.26 discount and origination points. Over the past 52 weeks, the 30-year fixed rate has averaged 4%. This week's rate is equal to the 52-week average.
The benchmark 15-year fixed-rate mortgage fell to 3.18% from 3.25%.
The benchmark 30-year fixed-rate jumbo mortgage fell to 3.89% from 3.97%.
The benchmark 5/1 adjustable-rate mortgage fell to 3.19% from 3.28%.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-092415.aspx
Thursday, September 24, 2015
Wednesday, September 16, 2015
Resilience of Refinancing About More Than Just Low Rates
The refinance mortgage market's unexpected resilience in 2015 has come as the result of a number of well-timed factors coalescing to create a welcomed surprise to lenders.
Traditional industry wisdom is for lenders to not over-rely on refinancing to support volume. While that continues to hold true, refis this year have had more life than expected.
The combination of still-low interest rates, rising home prices and government housing initiatives all had a hand in bolstering refinance originations, not to mention throwing industry forecasts for a loop.
For example, a year ago the Mortgage Bankers Association projected the refinance share of first quarter 2015 originations would be 38%. But refis ended up accounting for 53% of volume. Now, the MBA is expecting a 42% refinance share for all of 2015, up from its previous estimate of 35%.
"The primary influence is the rate drop. A secondary factor is that from 2011 to 2013, we had very low rates in the conforming sector but credit for jumbo borrowers was very tight. Now we're not quite as low as we were in 2013, but jumbo credit availability has expanded," said MBA chief economist Michael Fratantoni.
Lower-than-expected rates and concerns about when they might rise have been key drivers as they traditionally are, but there's more to it than that. Rates have been relatively low for a long time and burnout has long been anticipated.
A stronger housing market is another contributor.
"While it's clear that historically low interest rates have played a role in the pace of mortgage refinancing, rising home valuations, which have added to the pool of eligible borrowers in the government's Making Homes Affordable program, and a brisk national housing market, have been key drivers in the resilience of the sector," said Terry Moore, senior managing director at Accenture Credit Services.
Consumer confusion has plagued the Home Affordable Refinance Program and deterred some borrowers from taking advantage of the program, said Doug Duncan, senior vice president and chief economist at Fannie Mae. He added the government-sponsored enterprises have worked to clarify information for consumers.
"There were several misconceptions, like you have to bring a bunch of money to the table. Actually you don't," said Duncan. "The structure can be done so you don't have to bring any cash to the table," he said.
The reduction in the Federal Housing Administration's upfront premium also has bolstered refinancing. This "has led to a significant churning in the government space," said Duncan.
Another reason refinancing has continued to have legs is that some people are slow to respond to rate drops, ensuring demand continues.
"It's surprising the number of people who, if you look at their mortgage, they're in the money, but they don't act," said Duncan.
read more: http://www.nationalmortgagenews.com/news/origination/resilience-of-refinancing-about-more-than-just-low-rates-1061085-1.html
Traditional industry wisdom is for lenders to not over-rely on refinancing to support volume. While that continues to hold true, refis this year have had more life than expected.
The combination of still-low interest rates, rising home prices and government housing initiatives all had a hand in bolstering refinance originations, not to mention throwing industry forecasts for a loop.
For example, a year ago the Mortgage Bankers Association projected the refinance share of first quarter 2015 originations would be 38%. But refis ended up accounting for 53% of volume. Now, the MBA is expecting a 42% refinance share for all of 2015, up from its previous estimate of 35%.
"The primary influence is the rate drop. A secondary factor is that from 2011 to 2013, we had very low rates in the conforming sector but credit for jumbo borrowers was very tight. Now we're not quite as low as we were in 2013, but jumbo credit availability has expanded," said MBA chief economist Michael Fratantoni.
Lower-than-expected rates and concerns about when they might rise have been key drivers as they traditionally are, but there's more to it than that. Rates have been relatively low for a long time and burnout has long been anticipated.
A stronger housing market is another contributor.
"While it's clear that historically low interest rates have played a role in the pace of mortgage refinancing, rising home valuations, which have added to the pool of eligible borrowers in the government's Making Homes Affordable program, and a brisk national housing market, have been key drivers in the resilience of the sector," said Terry Moore, senior managing director at Accenture Credit Services.
Consumer confusion has plagued the Home Affordable Refinance Program and deterred some borrowers from taking advantage of the program, said Doug Duncan, senior vice president and chief economist at Fannie Mae. He added the government-sponsored enterprises have worked to clarify information for consumers.
"There were several misconceptions, like you have to bring a bunch of money to the table. Actually you don't," said Duncan. "The structure can be done so you don't have to bring any cash to the table," he said.
The reduction in the Federal Housing Administration's upfront premium also has bolstered refinancing. This "has led to a significant churning in the government space," said Duncan.
Another reason refinancing has continued to have legs is that some people are slow to respond to rate drops, ensuring demand continues.
"It's surprising the number of people who, if you look at their mortgage, they're in the money, but they don't act," said Duncan.
read more: http://www.nationalmortgagenews.com/news/origination/resilience-of-refinancing-about-more-than-just-low-rates-1061085-1.html
Saturday, September 5, 2015
Improved housing market means fewer underwater mortgages
Fewer South Florida homeowners are plagued with problem mortgages, a new report shows.
lRelated
First-time homebuyers can get $2K per year
Personal Finance
First-time homebuyers can get $2K per year
See all related
8
In the second quarter of 2015, 16 percent of mortgaged homes and condominiums were "underwater" in Palm Beach, Broward and Miami-Dade counties, down from 22 percent a year earlier, real estate website Zillow.com said Thursday.
State program gives up to $2K a year to first-time homebuyers
Little-known program gives up to $2,000 a year to people buying their first homes.
In Broward County, 53,984 properties were underwater in the second quarter, while 34,276 properties in Palm Beach County were worth less than what's owed.
Fueled by rising home prices, the tri-county region's so-called negative equity rate has dropped in every quarter since early 2012.
During the height of the housing bust, close to half of all homes with mortgages were underwater, according to Zillow. Those owners likely bought or refinanced from 2004 to 2006, before prices plunged across the area.
Underwater mortgage holders can't sell without paying thousands of dollars at closing, and they can't easily leave the area for new jobs. Some frustrated owners have walked away from the homes.
Svenja Gudell, chief economist for Seattle-based Zillow, said lower-priced home values have shot up recently, helping to reduce the number of burdensome mortgages.
The least expensive third of homes in the three counties (below $159,100) saw values increase by about 11 percent in July from a year ago, while the most expensive tier (above $316,550) increased in value by about 4 percent, Gudell said.
Despite the steady improvement, home price appreciation is expected to slow in the coming months, meaning many homeowners won't soon shake their underwater mortgages, Gudell said.
"For some folks who are deeply underwater, it will still take years," she said. "We've made great strides, but we still have a ways to go to get back to a normal market."
South Florida's 16-percent negative equity rate is slightly above the national average of 14 percent. Among the nation's 35 largest housing markets, Las Vegas (25 percent), Chicago (22 percent) and Atlanta (21 percent) have the highest rates, Zillow said. San Jose, Calif., had the lowest rate at 3 percent.
see more at: http://www.sun-sentinel.com/business/realestate/fl-underwater-mortgages-20150903-story.html
lRelated
First-time homebuyers can get $2K per year
Personal Finance
First-time homebuyers can get $2K per year
See all related
8
In the second quarter of 2015, 16 percent of mortgaged homes and condominiums were "underwater" in Palm Beach, Broward and Miami-Dade counties, down from 22 percent a year earlier, real estate website Zillow.com said Thursday.
State program gives up to $2K a year to first-time homebuyers
Little-known program gives up to $2,000 a year to people buying their first homes.
In Broward County, 53,984 properties were underwater in the second quarter, while 34,276 properties in Palm Beach County were worth less than what's owed.
Fueled by rising home prices, the tri-county region's so-called negative equity rate has dropped in every quarter since early 2012.
During the height of the housing bust, close to half of all homes with mortgages were underwater, according to Zillow. Those owners likely bought or refinanced from 2004 to 2006, before prices plunged across the area.
Underwater mortgage holders can't sell without paying thousands of dollars at closing, and they can't easily leave the area for new jobs. Some frustrated owners have walked away from the homes.
Svenja Gudell, chief economist for Seattle-based Zillow, said lower-priced home values have shot up recently, helping to reduce the number of burdensome mortgages.
The least expensive third of homes in the three counties (below $159,100) saw values increase by about 11 percent in July from a year ago, while the most expensive tier (above $316,550) increased in value by about 4 percent, Gudell said.
Despite the steady improvement, home price appreciation is expected to slow in the coming months, meaning many homeowners won't soon shake their underwater mortgages, Gudell said.
"For some folks who are deeply underwater, it will still take years," she said. "We've made great strides, but we still have a ways to go to get back to a normal market."
South Florida's 16-percent negative equity rate is slightly above the national average of 14 percent. Among the nation's 35 largest housing markets, Las Vegas (25 percent), Chicago (22 percent) and Atlanta (21 percent) have the highest rates, Zillow said. San Jose, Calif., had the lowest rate at 3 percent.
see more at: http://www.sun-sentinel.com/business/realestate/fl-underwater-mortgages-20150903-story.html
Monday, August 31, 2015
NACA event offers affordable mortgage options
The housing market is improving but many still face payments they can't afford. A national non-profit is back in Sacramento helping homeowners modify their loans so they can pay less.
The The Neighborhood Assistance Corporation of America is holding the American Dream Event Friday Aug. 28 - Tuesday Sept. 1 from 8 a.m. to 6 p.m. to allow homeowners to meet with their lender on-site to work out a solution.
Constance Arnick is retired and struggling to make her monthly mortgage payment.
“You only get paid that once a month so then you're filling up your car with gas and hoping you'll have enough next time you need to fill up,” Arnick said.
Her son died 2 years ago, but she's determined to make sure she can provide for her 3 granddaughters.
“If my overall principal was lower it would it would make my mortgage payment lower and it would be better for us all,” Arnick said.
And that's what NACA says it can help homeowners accomplish.
“People are not only getting those interest rates down to 2 percent but they're also getting principal reductions of 100-thousand dollars or more,” Tim Trumble, with NACA, said.
NACA says banks are doing loan modifications much more than they were in the past. Chris Hawkins was at risk of losing his home before attending a NACA event.
“Instead of actually buying my home, my home was worth less and less and more and more of a debt,” Hawkins said.
read more: http://www.abc10.com/story/news/local/sacramento/2015/08/28/naca-event-offers-affordable-mortgage-options/71346268/
The The Neighborhood Assistance Corporation of America is holding the American Dream Event Friday Aug. 28 - Tuesday Sept. 1 from 8 a.m. to 6 p.m. to allow homeowners to meet with their lender on-site to work out a solution.
Constance Arnick is retired and struggling to make her monthly mortgage payment.
“You only get paid that once a month so then you're filling up your car with gas and hoping you'll have enough next time you need to fill up,” Arnick said.
Her son died 2 years ago, but she's determined to make sure she can provide for her 3 granddaughters.
“If my overall principal was lower it would it would make my mortgage payment lower and it would be better for us all,” Arnick said.
And that's what NACA says it can help homeowners accomplish.
“People are not only getting those interest rates down to 2 percent but they're also getting principal reductions of 100-thousand dollars or more,” Tim Trumble, with NACA, said.
NACA says banks are doing loan modifications much more than they were in the past. Chris Hawkins was at risk of losing his home before attending a NACA event.
“Instead of actually buying my home, my home was worth less and less and more and more of a debt,” Hawkins said.
read more: http://www.abc10.com/story/news/local/sacramento/2015/08/28/naca-event-offers-affordable-mortgage-options/71346268/
Tuesday, August 25, 2015
Parkside Lending launches super-low down payment jumbo mortgage
Parkside Lending expanded its jumbo product offerings to go to 95% LTV without mortgage insurance as demand for jumbo mortgages grows in the market.
The San Francisco-based wholesale and correspondent lender created the new offering to help creditworthy borrowers with a down payment or equity as low as 5% fit into a traditional jumbo loan.
“We believe our new Jumbo loan offering is an important financing alternative for a specific segment of creditworthy borrowers,” said James Lamparter, executive vice president of sales at Parkside Lending. “We continue to grow our Jumbo product line as we identify different needs in the marketplace.”
Parkside noted that it will go to 95% LTV/CLTV on loan amounts up to $1 million without mortgage insurance on a 1 unit, owner occupied purchase or rate and term refinance.
Features of the product include:
An alternative to high balance loans (minimum loan amount: $417,001)
740 minimum credit score
24 months reserves (borrower’s own funds)
35% maximum DTI
Minimum down payment of 5% (borrower’s own funds)
Parkside Lending also offers jumbo loans on non-owner occupied transactions, and will go to 65% LTV/CLTV, 1-4 units.
This isn’t the first step the lender has taken this year to better supports its clients. Back in May, it announced that it would begin offering Federal Housing Administration-backed mortgages.
Jumbo loan demand has been steadily growing, with the Mortgage Bankers Association reporting in April that applications for some jumbo loan sizes increased in 2014, mainly in the $417,000 to $625,000 range and in the greater than $729,000 range.
see more: http://www.housingwire.com/articles/34854-parkside-lending-launches-super-low-down-payment-jumbo-mortgage
The San Francisco-based wholesale and correspondent lender created the new offering to help creditworthy borrowers with a down payment or equity as low as 5% fit into a traditional jumbo loan.
“We believe our new Jumbo loan offering is an important financing alternative for a specific segment of creditworthy borrowers,” said James Lamparter, executive vice president of sales at Parkside Lending. “We continue to grow our Jumbo product line as we identify different needs in the marketplace.”
Parkside noted that it will go to 95% LTV/CLTV on loan amounts up to $1 million without mortgage insurance on a 1 unit, owner occupied purchase or rate and term refinance.
Features of the product include:
An alternative to high balance loans (minimum loan amount: $417,001)
740 minimum credit score
24 months reserves (borrower’s own funds)
35% maximum DTI
Minimum down payment of 5% (borrower’s own funds)
Parkside Lending also offers jumbo loans on non-owner occupied transactions, and will go to 65% LTV/CLTV, 1-4 units.
This isn’t the first step the lender has taken this year to better supports its clients. Back in May, it announced that it would begin offering Federal Housing Administration-backed mortgages.
Jumbo loan demand has been steadily growing, with the Mortgage Bankers Association reporting in April that applications for some jumbo loan sizes increased in 2014, mainly in the $417,000 to $625,000 range and in the greater than $729,000 range.
see more: http://www.housingwire.com/articles/34854-parkside-lending-launches-super-low-down-payment-jumbo-mortgage
Thursday, August 20, 2015
Mortgage rates rise, boosted by improved housing market
Mortgage rates inched up this week following satisfactory news about the housing market's progress.
Numbers for new residential construction came in better than expected, which temporarily pushed U.S. Treasury bond yields higher on Tuesday. Mortgage rates commonly move in the same direction as government bond yields.
Housing starts edge up
Housing starts in July were at an annual rate of 1.206 million units -- a 0.2% increase over June, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. Last month's rate is 10.1% higher than the July 2014 rate.
2015
%
30-year fixed
Jun
Jul
Aug
4.00
4.10
4.20
30-year fixed06/3/2015 : 4.03%
30 year fixed rate mortgage -- 3 month trend
"The housing market is a leading light of the economy and it looks like that will be the case for a while," says Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "Home construction edged up in July to a level not seen since the fall of 2007."
Single-family housing starts were up 12.8% month over month, while multifamily starts fell 17.1%.
Additionally, homebuilder confidence has risen to a nearly 10-year high, the National Association of Home Builders reported earlier this week.
A look at this week's rates
The benchmark 30-year fixed-rate mortgage rose to 4.06% from 4.04%, according to Bankrate's Aug. 19 survey of large lenders. A year ago, the rate was 4.24%. Four weeks ago, it was 4.12%. The mortgages in this week's survey had an average total of 0.25 discount and origination points. Over the past 52 weeks, the 30-year fixed rate has averaged 4.03%. This week's rate is 0.03 percentage points higher than the 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.28% from 3.26%.
The benchmark 30-year fixed-rate jumbo mortgage fell to 3.97% from 4%.
The benchmark 5/1 adjustable-rate mortgage rose to 3.24% from 3.2%.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-082015.aspx
Numbers for new residential construction came in better than expected, which temporarily pushed U.S. Treasury bond yields higher on Tuesday. Mortgage rates commonly move in the same direction as government bond yields.
Housing starts edge up
Housing starts in July were at an annual rate of 1.206 million units -- a 0.2% increase over June, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. Last month's rate is 10.1% higher than the July 2014 rate.
2015
%
30-year fixed
Jun
Jul
Aug
4.00
4.10
4.20
30-year fixed06/3/2015 : 4.03%
30 year fixed rate mortgage -- 3 month trend
"The housing market is a leading light of the economy and it looks like that will be the case for a while," says Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "Home construction edged up in July to a level not seen since the fall of 2007."
Single-family housing starts were up 12.8% month over month, while multifamily starts fell 17.1%.
Additionally, homebuilder confidence has risen to a nearly 10-year high, the National Association of Home Builders reported earlier this week.
A look at this week's rates
The benchmark 30-year fixed-rate mortgage rose to 4.06% from 4.04%, according to Bankrate's Aug. 19 survey of large lenders. A year ago, the rate was 4.24%. Four weeks ago, it was 4.12%. The mortgages in this week's survey had an average total of 0.25 discount and origination points. Over the past 52 weeks, the 30-year fixed rate has averaged 4.03%. This week's rate is 0.03 percentage points higher than the 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.28% from 3.26%.
The benchmark 30-year fixed-rate jumbo mortgage fell to 3.97% from 4%.
The benchmark 5/1 adjustable-rate mortgage rose to 3.24% from 3.2%.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-082015.aspx
Monday, August 17, 2015
On the House: Presidential hopefuls and the mortgages they keep
You can't tell the 2016 presidential hopefuls without a scorecard, but thanks to the Loan Depot, we know something about their houses and how much their mortgages are.
I can't do them all in this space, so if anyone thinks I've slighted their favorite hopeful, email me and I'll send you the list.
Jeb and Columba Bush live in Coral Gables, in a 3,485-square-foot, four-bedroom, four-bath townhouse purchased in August 2011 for $1.3 million. Its assessed value in 2014 was $1.1 million. In July 2013, public records show, they refinanced their mortgage to a 30-year conventional loan for $754,000.
Hillary and Bill Clinton own a five-bedroom, four-bathroom 5,232 square-foot Colonial in Chappaqua, N.Y., purchased for $1.7 million in 1999, with an adjustable-rate mortgage of $1.41 million.
Their 5,152 square-foot D.C. home, with four bedrooms, six bathrooms and two half-baths, was purchased in 2001 for $2.85 million, with $2 million of it financed with a 30-year adjustable-rate mortgage at 7.25 percent.
It was paid off in 2007.
Ted and Heidi Cruz live in a two-bedroom, two and one-half bath luxury high-rise condominium with 19th-floor views of Houston built in 2003.
They bought it for $837,500 in September 2008 and financed $670,000 of it with a conventional, 30-year adjustable-rate mortgage.
In March 2011, public records show, they refinanced $417,000 to a 15-year fixed.
Rand and Kelley Paul live in a four-bedroom, three-bath, 4,206-square-foot home in Bowling Green, Ky., built in 1994.
Its total value was assessed at $525,000 in 2014 with a land value of $257,500.
In July 2014, they took out a 10-year conventional mortgage on the property for $172,500.
Read more at http://www.philly.com/philly/business/real_estate/residential/20150816_On_the_House__Presidential_hopefuls_and_the_mortgages_they_keep.html
I can't do them all in this space, so if anyone thinks I've slighted their favorite hopeful, email me and I'll send you the list.
Jeb and Columba Bush live in Coral Gables, in a 3,485-square-foot, four-bedroom, four-bath townhouse purchased in August 2011 for $1.3 million. Its assessed value in 2014 was $1.1 million. In July 2013, public records show, they refinanced their mortgage to a 30-year conventional loan for $754,000.
Hillary and Bill Clinton own a five-bedroom, four-bathroom 5,232 square-foot Colonial in Chappaqua, N.Y., purchased for $1.7 million in 1999, with an adjustable-rate mortgage of $1.41 million.
Their 5,152 square-foot D.C. home, with four bedrooms, six bathrooms and two half-baths, was purchased in 2001 for $2.85 million, with $2 million of it financed with a 30-year adjustable-rate mortgage at 7.25 percent.
It was paid off in 2007.
Ted and Heidi Cruz live in a two-bedroom, two and one-half bath luxury high-rise condominium with 19th-floor views of Houston built in 2003.
They bought it for $837,500 in September 2008 and financed $670,000 of it with a conventional, 30-year adjustable-rate mortgage.
In March 2011, public records show, they refinanced $417,000 to a 15-year fixed.
Rand and Kelley Paul live in a four-bedroom, three-bath, 4,206-square-foot home in Bowling Green, Ky., built in 1994.
Its total value was assessed at $525,000 in 2014 with a land value of $257,500.
In July 2014, they took out a 10-year conventional mortgage on the property for $172,500.
Read more at http://www.philly.com/philly/business/real_estate/residential/20150816_On_the_House__Presidential_hopefuls_and_the_mortgages_they_keep.html
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