Daily Rate Update: October 4th-8th

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Thursday – October 7, 2021

Home borrowing costs inched lower this week and remain just above historic lows. Freddie Mac reports that the 30-year fixed-rate mortgage fell two basis points to 2.99% with 0.7 in points and fees. The record low was 2.65% on January 7 of this year. Sam Khater, Freddie Mac’s Chief Economist said, “Mortgage rates continue to hover at around three percent again this week due to rising economic and financial market uncertainties,” said Sam Khater, Freddie Mac’s Chief Economist. “Unfortunately, with the expectation that both mortgage rates and home prices will continue to rise, competition remains high and housing affordability is declining.”

First-time unemployment claims rose in the latest week as the sector continues to get back to full strength. At present, there are 11 million jobs available across the nation. The Labor Department reports that Weekly Initial Jobless Claims fell 38,000 to 326,000 for the week ended October 2, 2021. Continuing claims, or those receiving benefits for at least two weeks straight, fell to 2.714 million from 2.81 million. The labor market should continue to improve with holiday hiring underway.

Courtesy of Mortgage Market Guide 

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Wednesday – October 6, 2021

Home borrowing costs increased in the latest week and remain just above record lows. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage rose four basis points to 3.14% with 0.34 in points for the week ending October 1, 2021. Within the report it showed that the Market Composite Index fell 7%, the Refinance Index declined by 10% and the Purchase Index saw a 2% loss. A spokesperson said, “Mortgage applications to refinance dropped almost 10 percent last week to the lowest level in three months, as the 30-year fixed rate increased to 3.14 percent – the highest since July. Higher rates are reducing borrowers’ incentive to refinance, as declines were seen across all loan types.”

Private payroll growth beat expectations in September setting the stage for the Federal Reserve to announce tapering of its massive bond purchase programs at the November 3rd Fed meeting. ADP Private Payrolls rose 568,000 in September versus the 405,000 expected. The leisure and hospitality sector led with 226,000 while companies with 500 and more employees led job creation with 390,000. The data comes before Friday’s official Jobs Report.

Courtesy of Mortgage Market Guide 

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Tuesday – October 5, 2021

Home prices continue to surge across the nation as demand far outweighs supply. CoreLogic reports that home prices nationally, including distressed sales, soared a record 18.1%, the largest gain in the 45-year history of the Home Price Index. Monthly, there was a gain of 1.3% from July 2021 to August 2021. Looking ahead, the forecast indicates that home prices will rise monthly by 0.3% from August 2021 to September 2021, and annually by 2.2% from August 2021 to August 2022. “Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drives demand for a limited supply of homes. We expect to see the trend of strong price gains continue indefinitely with large amounts of capital chasing too few assets,” said Frank Martell, President and CEO of CoreLogic.

The price of oil has hit a 7-year high of nearly $79/bbl this morning for West Texas Intermediate due in part to OPEC open only to a gradual increase in supply at a time when demand has been picking up. Back on April 20, 2020, the price fell to -$40.32 meaning that sellers had to pay a buyer to take a barrel of oil from them. Higher oil prices are a tax on everyone. The rise in oil prices have pushed the average national average for a gallon of gasoline up to $3.21 from $3.18 a week ago and from $2.18 a year ago.

The number of loans in forbearance continued to decline in the latest set of numbers. The MBA reports that the number of loans in forbearance fell to 2.89% as of September 26 after dropping four basis points in the previous week. The MBA estimates that there are 1.4 million homeowners in active forbearance programs. Fannie Mae and Freddie Mac loans fell six basis points to 1.38% while Ginnie Mae loans in forbearance declined seven basis points to 3.35%. Mike Fratantoni, senior vice president and chief economist at the MBA said, “Most borrowers exiting forbearance through a workout are opting for a deferral plan, which allows them to resume their original payment while moving the forborne amount to the end of the loan.”

Courtesy of Mortgage Market Guide 

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