Posted To: Mortgage Rate Watch

Mortgage rates remained in line with 3-month lows today for the average lender. Several lenders offered marginally better terms compared to yesterday, but in those cases, the only changes were to the upfront costs associated with the same rates quoted yesterday. It's a pleasant surprise to see rates as low as they are considering several economic reports have been quite strong recently. In general, stronger economic data tends to put upward pressure on rates. That was a risk today with today's Existing Home Sales report coming in at the best levels since early 2018. But econ data isn't the only consideration for the bond market that underlies day-to-day rate movement. Low inflation, geopolitical tensions, and even concerns over the Coronavirus outbreak are just three of many other factors that...(read more)

1/22/2020 3:22:00 PM

Posted To: MND NewsWire

Existing home sales rose convincingly in December, gaining 3.6 percent compared to sales the prior month. Sales of all existing home types , single-family, townhouses, condos, and cooperative apartments were higher than in November and all posted double digit increases from sales in December 2018. The National Association of Realtors® said home sales were at a seasonally adjusted annual rate of 5.54 million units in December compared to 5.35 million units in November. They were up 10.8 percent from the 5.00 million pace in December 2018. Single-family home sales were also solid, posting a gain of 2.7 percent to an annual rate of 4.92 million (compared to 4.79 million in November) and a 10.6 percent change from a year earlier. Condominium and co-op sales were recorded at a seasonally adjusted...(read more)

1/22/2020 10:00:39 AM

Posted To: MND NewsWire

The annual rate of home price increases continued at a stable rate in November according to the Federal Housing Finance Agency (FHFA), however there are indications of some acceleration on a shorter-term basis. The FHFA's Housing Price Index (HPI) rose 4.9 percent compared to November of 2018. The annual increase in October was 5.0 percent. On a monthly basis prices rose 0.2 percent from October; however, the 0.2 percent increase originally reported for that month was boosted to 0.4 percent. It was the second month in a row that FHFA has revised the prior month's number higher. For the nine census divisions, seasonally adjusted monthly house price changes from October 2019 to November 2019 ranged from an 0.1 percent decrease in the Mountain division to an 0.8 percent gain in the East North...(read more)

1/22/2020 8:56:53 AM

Posted To: MBS Commentary

You know things are bad when I resort to invoking Kierkegaard in bond market commentary, but that's what it's come to. Our quest to observe something interesting in terms of rate momentum is beginning to feel hopeless. In fact, if someone wanted to be a real whiner about it, they could make a very strong case for another year of sideways momentum, or close to it. They would be like Kierkegaard's Knight of Infinite Resignation (at least I think they would...) I took one philosophy class in college, and the lesson on these 2 stony knights is one of the only things I remember. Basically, one is a pessimist who thinks he's just being a realist. He believes there are solid reasons that he will never win the love of the princess. So he gives up and finds his own sort of peace in that...(read more)

1/22/2020 8:51:22 AM

Posted To: Pipeline Press

What does $4.6 billion dollars buy you these days? A couple casinos: a Blackstone-sponsored JV is paying that for MGM Grand and Mandalay Bay in Las Vegas. For that you’ll receive the income from 9,743 rooms, approximately three million square feet of meeting space, and approximately 300,000 square feet of casino space across 226 acres on the Las Vegas Strip . 2,500 miles away, the average price of a newly listed condo in New York rose from $1.15 million in 2011 to $3.77 million in 2019 , but about half of the Manhattan luxury condo units that came on to the market in the past five years are as yet unsold . And NY is losing 300 residents per day. Analysts are quick to remind us that this is not actually a market for people to buy homes but rather for the global wealthy to park money (similar...(read more)

1/22/2020 8:08:28 AM

Posted To: MND NewsWire

In its first economic forecast of 2020, Fannie Mae's Economic and Strategic Research (ESR) Group is doubling down on its late 2019 predictions. The economists say that " onstruction is poised to become a significant contributor to overall economic growth again," and sets the year's theme as "A Resilient Economy Overcomes Risks to Drive Housing." For the economy as a whole, the ESR says it expects its earlier forecast that fixed business investment would turn positive at the end of last year to finally come about in the current quarter. It also ups its previous 2.3 percent growth in 2019 real gross domestic product (GDP) to 2.4 percent. Its full year 2020 forecast is unchanged at 2.1 percent although stronger growth is now expected at the start of the year. Since the December report three additional...(read more)

1/22/2020 7:18:53 AM

Posted To: MND NewsWire

The volume of mortgage applications submitted during the week ended January 17 slowed after a strong performance - a 30.2 percent increase - the prior week, but it was only a small decline . The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, ticked down 1.2 percent on a seasonally adjusted basis while gaining 0.4 percent unadjusted. Refinancing remained at a high level. The Refinancing Index, while down 2 percent on a week-over-week basis following a 43 percent surge during the week ended January 10, maintained a 116 percent edge over the same week in 2019 . The percentage of all applications that were for refinancing dipped to 61.6 percent of total applications from 62.9 percent the previous week The seasonally adjusted Purchase Index decreased...(read more)

1/22/2020 7:04:29 AM

Posted To: Mortgage Rate Watch

Mortgage rates dropped to begin the holiday-shortened week as markets expressed a bit of panic over the coronavirus outbreak in China. This is similar to the SARS outbreak in 2003, which certainly had an impact on both stocks and bonds. While it's too soon to know if the new iteration of the disease will run a similar course, it's not too soon for markets to begin heading in that direction preemptively. Specifically, fears surrounding the outbreak lead investors to expect commerce, in general, to take a hit. Sure, the average person may not change their daily routine because of Coronavirus, but many will (and have). A decrease in the level of commerce implies lower stock prices. Simultaneously, investors can seek safe havens for their money in the sovereign bond market (such as US Treasuries...(read more)

1/21/2020 4:08:00 PM

Posted To: MND NewsWire

The share of adults who told the National Association of Home Builders (NAHB) they were considering a home purchase in the next year has now fallen year-over-year for the fifth consecutive time. NAHB's survey for its fourth quarter 2019 Housing Trends Report found only 11 percent of its respondents had such plans, a 2-percentage point drop from the survey a year earlier and less than half the share in the fourth quarter of 2017. Rose Quint, writing in NAHB's Eye on Housing blog blamed the steady decline in planned participation on the persistent low levels of housing inventory. Offsetting this discouraging news however is data on both the ages of those who are planning on buying and their current homeownership status. Nineteen percent of Millennials (those born between 1981 and 1996) said they...(read more)

1/21/2020 11:10:35 AM

Posted To: MBS Commentary

In addition to being a 4-day trading week due to yesterday's holiday, there's also a general lack of big-ticket economic data on tap. In fact, there isn't a single report that qualifies as "top-tier" in terms of market movement potential and the only candidates that come close are the Markit PMIs on Friday. That's unfortunate because the US bond market is desperately in need of some direction after almost half a year of broad consolidation and 1-3 months of intense consolidation. "Broad" and "intense" are subjective terms, so let's quantify them quickly. In the chart below, the broad consolidation isn't highlighted, but it would begin in the first 2 weeks of September, which marked a much smaller jump between highs/lows than the one seen...(read more)

1/21/2020 9:22:09 AM