Thursday – June 9, 2022
Home borrowing costs increased this week after several weeks of declines. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 5.23% this week from 5.09% last week with an average of 0.9 in points and fees. A year ago the rate was 2.96%. The 15-year inched higher to 4.38% from 4.32% with a 0.8 point. A year ago that 15-year was 2.23%. Sam Khater, Freddie Mac’s Chief Economist said, “The material decline in purchase activity, combined with the rising supply of homes for sale, will cause a deceleration in price growth to more normal levels, providing some relief for buyers still interested in purchasing a home.”
Mortgage credit availability fell in May according to the Mortgage Credit Availability Index (MCAI) from the MBA. The MCAI declined by 0.9% to 120.0 in May. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. “Mortgage credit supply declined for the third month in a row to the lowest level since July 2021. The index remains more than 30 percent below pre-pandemic levels, as recent months’ credit tightening has occurred in refinance loan programs,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
Americans filing for first time unemployment benefits rose in the latest week as the cockeyed labor market continues to raise questions. Weekly Initial Jobless Claims rose 27,000 to 229,000 and above the 210,000 expected. Continuing claims were unchanged at 1.306 million. There are currently 11.5 million jobs available with 6.5 million unemployed while 47% of small business owners recently reported job openings that could not be filled.
Courtesy of Mortgage Market Guide
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Wednesday – June 8, 2022
Mortgage rates rose in the latest week after the recent decline in borrowing costs. The 30-year fixed-rate mortgage rose to 5.40% from 5.33% with 0.60 points for the week ended June 3, 2022, reports the MBA. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, declined 6.5%, the Refinance Index fell 6% and the Purchase Index declined 7%. Spokesperson Joel Kan said, “The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past months. These worsening affordability challenges have been particularly hard on prospective first-time buyers.”
There were no economic reports due for release today as the markets look out to tomorrow’s European Central Bank’s monetary policy decision and Friday’s inflation reading Consumer Price Index report. Next week things heat up with the two-day Federal Open Market Committee meeting kicking off on Tuesday with the monetary policy statement at 2:00 p.m. ET. Consumer credit card debt has recently jumped while the savings rate declined.
Courtesy of Mortgage Market Guide
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Tuesday – June 7, 2022
CoreLogic reports that home prices nationwide, including distressed sales, matched a record high of 20.9% from April 2021 to April 2022. Monthly, prices rose 2.6%. Looking ahead, home prices are expected to increase 1.2% from April to May and a 5.6% rise from April 2022 to April 2023. This comes at a time when the 30-year fixed-rate mortgage is currently just over 5% from the 3% seen in April 2021. “With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. As a consequence, our forecast projects slowing price growth over the coming year,” said Patrick Dodd, President and CEO for CoreLogic.
Freddie Mac reports that would-be homebuyers are feeling the squeeze of higher home prices and mortgage rates. Only 17% of consumers report It’s a “Good Time to Buy” a home. The Fannie Mae Home Purchase Sentiment Index remained relatively flat in May, decreasing by only 0.3 points but inching nearer its 10-year- and pandemic-low of 63.0 from April 2020. Additionally, 70% of respondents expect mortgage rates to continue their recent ascent over the next 12 months. A greater share of consumers also expressed concern that they may lose their job in the next 12 months, but that component remains firmly positive generally, with only 16% of consumers expressing pessimism.
In the news … the global financial markets await the European Central Bank headlines on Thursday and the looming Fed meeting next week. Target is saying that the soaring costs of food and energy are causing the consumer to pause on other purchases or use their credit card. Apple announced a new service yesterday called “Buy now, pay later” as companies do everything to keep the consumer spending. The national average price for a regular gallon of gasoline hit yet another record high of $4.91 today! In California, prices are seen at $7.
Courtesy of Mortgage Market Guide
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Monday – June 6, 2022
U.S. investors, as well as Federal Reserve members, are eagerly awaiting the Consumer Price Index (CPI) for May when the numbers are released this Friday. Inflation at the consumer level is currently running at a 40-year high driving the price for goods and services considerably higher. The national average price for a regular gallon of gasoline hit yet another record high of $4.86 today with $6 and $7 seen in parts of the country. The CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services.
Home builders and prospective new home buyers are getting a bit of a reprieve from surging supply costs over the past few years. The price of lumber has fallen to the low for the year at $606 per thousand board feet from the $1,733 seen in 2021. The peak in prices added nearly $19,000 to the price of a new single-family home. The Wall Street Journal reports that ‘lumber buyers have slowed orders and wood is piling up at mills, which are slashing prices, according to Random Lengths.’
Courtesy of Mortgage Market Guide
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