Thursday – January 13, 2022
Home borrowing costs rose to near levels seen in late March of 2020 (3.50%) this week though they remain historically low. Freddie Mac reports that the 30-year fixed-rate mortgage rose 23 basis points to 3.45% with 0.7 in points and fees. The record low was 2.65% on January 7, 2021. Sam Khater, Freddie Mac’s Chief Economist said, “This was driven by the prospect of a faster than expected tightening of monetary policy in response to continued inflation exacerbated by uncertainty in labor and supply chains. The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future.”
First-time unemployment claims continued to remain low in the latest week as the country continues to get back to normal as the pandemic subsides. At present, there are nearly 11 million jobs available across the nation. The Labor Department reports that Weekly Initial Jobless Claims rose 23,000 to 230,000 for the week ended January 7, 2022. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 1.559 million from 1.753 million.
December wholesale inflation jumps annually but the monthly numbers declined from the previous month. The Producer Price Index (PPI) in December came in at 0.2% vs 0.4% expected and down from 1% in November. PPI was up 9.7% annually versus the 9.8% expected and matched the November number. Core PPI rose 0.5%, inline and down from 0.9% in November and up 8.3% annually vs 8% expected and up from 7.7% in November. The numbers come after yesterday’s 40-year high in the inflation reading Consumer Price Index.
Courtesy of Mortgage Market Guide
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Wednesday – January 12, 2022
Annual consumer inflation rose to the highest level in 40 years fueled by a spike in gas prices. The meteoric rise in prices was also due to the current supply chain shortage, a lack of workers along with big money flowing through the economy from Congress as well as the Federal Reserve. The Consumer Price Index rose 0.5% monthly in December down from 0.8% in November and just above the 0.4% expected. The annual headline number rose 7% annually, the highest since June 1982 but inline with expectations. The Core rate rose 0.6% monthly from 0.5% in November and above the 0.5% expected, up 5.5% annually, the highest since February of 1991. Gas prcies rose 50% annually.
Home borrowing costs jumped in the latest week but remain historically low. The MBA reports that the 30-year fixed-rate mortgage spiked by 19 basis points to 3.52% with 0.45 in points for the week ending January 7, 2022. Within the report it showed that the Market Composite Index rose 1.4, the Purchase Index was up 2% while the Refinance Index was essentially unchanged. An MBA spokesperson said, “The MBA expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand.”
Good news from the housing sector as mortgage delinquency rates fell to pre-pandemic levels in October due in part to an improving labor market and higher home prices. CoreLogic reports that in October, 3.8% of mortgages were delinquent by at least 30 days, including foreclosure, near the 3.7% rate recorded in October 2019. In October of 2020, the delinquency rate was at 6.1%. Frank Martell, president and CEO of CoreLogic said, “We expect to see delinquency trend down over the balance of this year as the economy continues to rebound from the pandemic, employment grows and high levels of fiscal and monetary stimulus continues.”
Courtesy of Mortgage Market Guide
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Tuesday – January 11, 2022
From the small business sector, the NFIB Small Business Optimism Index inched higher in December from November with many business owners citing inflation as their number one obstacle. “Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive,” said NFIB Chief Economist Bill Dunkelberg. “Inflation is at the highest level since the 1980s and is having an overwhelming impact on owners’ ability to manage their businesses.”
Mortgage credit availability rose last month according to the Mortgage Credit Availability Index (MCAI), a report from the MBA. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index increased to 125.9, up 0.8%. “Credit supply increased in December, with growth across both conventional and government segments of the market. The overall credit index increased to its highest level since May 2021, but remained 30% below its pre-pandemic level,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
Courtesy of Mortgage Market Guide
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Monday – January 10, 2022
Home borrowing costs rose to near levels seen in April of 2021 this week and remain historically low. Freddie Mac reports that the 30-year fixed-rate mortgage rose 11 basis points to 3.22 with 0.7 in points and fees. The record low was 2.65% on January 7, 2021. Sam Khater, Freddie Mac’s Chief Economist said, “With higher inflation, promising economic growth and a tight labor market, we expect rates will continue to rise. The impact of higher rates on purchase demand remains modest so far given the current first-time homebuyer growth.”
First-time unemployment claims continued to remain low in the latest week as the country continues to get back to normal as the pandemic subsides. At present, there are nearly 11 million jobs available across the nation. The Labor Department reports that Weekly Initial Jobless Claims rose 7,000 to 207,000 for the week ended January 1, 2022. Continuing claims, or those receiving benefits for at least two weeks straight, rose to 1.754 million from 1.718 million.
The minutes from the December 15, 2021 FOMC meeting signaled that Fed members could raise rates sooner rather than later given sustained higher inflation along with an improving economy and labor market. From the minutes, members “generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated.” Several participants, meanwhile, “viewed labor market conditions as already largely consistent with maximum employment.”
Courtesy of Mortgage Market Guide
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