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
Showing posts with label rates. Show all posts
Showing posts with label rates. Show all posts
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
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
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