Daily Rate Update: September 5th-9th

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Thursday – September 8, 2022

Freddie Mac reports that home borrowing costs rose for the third straight week due in part to fears of aggressive rate hikes and sustained high inflation. The 30-year fixed rate mortgage rose to 5.89% from 5.66% last week with 0.7 in points and fees. A year ago the rate was 2.88%. The 15-year rose to 5.16% from 4.98% with 0.8 in points and fees. A year ago the rate was 2.19%. Sam Khater, Freddie Mac’s Chief Economist said, “Not only are mortgage rates rising but the dispersion of rates has increased, suggesting that borrowers can meaningfully benefit from shopping around for a better rate. Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one additional rate quote and an average of about $3,000 if they get five quotes.”

Americans filing for first-time unemployment benefits fell in the latest week as the labor market continues on an uneven path. Weekly Initial Jobless Claims fell 6,000 to 222,000, a three-month low, and below the 240,000 expected. The 4-week moving average was 233,000, a decrease of 7,500 from the previous week. Continuing claims came in at 1,473,000, an increase of 36,000 from the previous week. Currently, there are 11 million jobs available across the country with 5.5 people unemployed while the Unemployment Rate is low at 3.7%.

Courtesy of Mortgage Market Guide 

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Wednesday – September 7, 2022

Fannie Mae reports that high home prices and mortgage rates weighed on housing sentiment in its August Home Purchase Sentiment Index (HPSI). The HPSI decreased 0.8 points in August to 62.0, its sixth consecutive monthly decline. Housing will struggle with rates near current levels. Fannie Mae went on to say that the year-over-year jump in interest rates has amplified perceptions of unaffordability for buyers and ‘Lock-in Effect’ for sellers.

Mortgage rates rose again in the MBA’s latest survey rising three weeks in a row. The 30-year fixed-rate mortgage rose to 5.94% from 5.80% with 0.79 points for the week ended September 2, 2022. Within the data, it showed that the Market Composite Index fell 0.8%, the Purchase Index was down 0.7% and the Refinance Index saw a 1.1% decline. Spokesperson Joel Kan said, “There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity.”

Prices at the pump have been declining since the all-time high motorists saw in mid-June. Motor club AAA reports that the national average price for a regular gallon of gasoline fell to $3.76 this week due in part to lower oil prices, modest domestic gasoline demand and a quiet hurricane season. The price is down from $4.06 a month ago though up from $3.18 a year ago.

Courtesy of Mortgage Market Guide 

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Tuesday – September 6, 2022

Home price gains are beginning to cool off after the frothy increases seen in the past two years. CoreLogic reports that home prices, including distressed sales, rose 15.8% from July 2021 to July 2022, down from the 18.1% gain seen in June. Monthly, prices fell 0.3%. Looking ahead, prices are expected to rise by 0.3% from July 2022 to August 2022 and on a year-over-year basis by 3.8% from July 2022 to July 2023. “The higher cost of homeownership has clearly eroded affordability, as inflation-adjusted monthly mortgage expenses are now even higher than they were at their former peak in 2006,” said Selma Hepp Interim Lead, Deputy Chief Economist for CoreLogic.

Realtor.com reports that for the first time days on the market grows for the first time in over two years. The company went on to report that in August, the typical U.S. home spent five more days on the market than last year, but still moved 22 days faster than the typical 2017-2019 pace. “For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce. As a result of this shift coupled with higher mortgage rates, competition continued to cool in August, with listing price trends indicating that home sellers are noticing shoppers tightening their purse strings,” said Danielle Hale, Chief Economist for Realtor.com®.

Courtesy of Mortgage Market Guide 

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