Mortgage in America

Daily Rate Update: July 6th-10th

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Thursday – July 9, 2020

Mortgage rates continued to hit record lows in the latest survey which is spurring on homebuyer demand. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 3.03% with 0.8 in points and fees. A year ago, the rate was 3.75%. Freddie Mac said that ‘the summer is heating up as record-low mortgage rates continue to spur homebuyer demand. However, it remains to be seen whether the demand will continue if COVID cases rise to the point that it hinders economic growth.’

Americans filing for first-time unemployment benefits continue to decline from the huge numbers seen post-shutdown though they are still at historically lofty levels. And with the extra $600 in federal unemployment benefits expiring at the end of the month, Congress is considering some type of stimulus package when they get back from the July recess in two weeks. Weekly Initial Jobless Claims came in at 1.314 million versus the 1.350 million expected and down from 1.413 million in the previous week. Continuing Claims fell to 18.062 million from 18.760 million.

Courtesy of Mortgage Market Guide 

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Wednesday – July 8, 2020

Mortgage rates inched lower in the latest week as the Federal Reserve continues to stabilize the market in an effort to keep borrowing costs low. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage fell to a survey low of 3.26% with .35 in points. The Market Composite Index, a measure of total mortgage loan application volume, rose 2.2%, the Purchase Index was up 5% while the Refinance Index saw a 0.4% gain. The 30-year rate is down from 3.79% seen in late March. Annually in June, the Purchase Index was up 33% while the Refinance Index increased 111%.

As the U.S. continues to reopen and the economy accelerates, the housing sector is perking up after the pandemic induced shutdown curtailed activity. Fannie Mae reports that 61% of Americans now believe that is a good time to buy a house and that consumer attitudes regarding homebuying and home-selling conditions have greatly improved. Fannie’s Home Purchase Sentiment Index rose 9 points to 76.5 with four of the six components increasing for the month. However, Fannie Mae believes that believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery.

Courtesy of Mortgage Market Guide 

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Tuesday – July 7, 2020

Corelogic reports that home prices, including distressed sales, rose by 4.8% in May 2020 from May 2019 and were up 0.7% monthly from April to May. “Pending sales and home-purchase loan applications are higher than in June of last year and reflect the buying activity of millennials. By the end of summer, buying will slacken and we expect home prices will show declines in metro areas that have been especially hard hit by the recession,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. Looking ahead, CoreLogic predicts that home prices will decline monthly by 0.1% from May 2020 to June 2020, and fall 6.6% year-over-year from May 2020 to May 2021.

The Bureau of Labor Statistics reports that the number of hires increased by 2.4 million to a series high of 6.5 million in May in its JOLTS (Job Openings and Labor Turnover Survey) report released today. This was the largest monthly increase of hires since the series began. In addition, On the last business day of May, the number of job openings increased to 5.4 million 0) while the rate was little changed at 3.9 percent. Job openings rose in accommodation and food services, retail trade and construction. Job openings decreased in information, the federal government and educational services.

Courtesy of Mortgage Market Guide 

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Monday – July 6, 2020

Homeowners across the nation are seeing tappable equity increase to the highest levels on record. Black Knight reports that tappable equity hit $6.5 trillion annually in Q1 2020 from Q1 2019, an 8% increase. The ultra-low mortgage rate environment is now showing that 90% of homeowners have rates above the current market average with more than 75% having rates above 3.5%. In addition, Q1 2020 saw refinance originations rise to a 7-year high though cash-out refinances fell for the first time since early 2019.

The U.S. financial markets continued to see positive economic data today as the service sector received a solid report today. The ISM Service Sector registered 57.1 in June from 45.4 in Maywhere 50 is the dividing line between expansion and contraction. It was the largest single increase since records began in 1997. The business activity, new orders and employment indexes all saw big gains. The ISM Service Index is based on data compiled from purchasing and supply executives nationwide.

The recent stream of positive economic data is boosting stock prices while bonds decline in what is a slow week for economic data while added Treasury supply looms. The big gains in June job creations on Friday added to the already positive sentiment in the equity markets after a big second quarter for the S&P 500. Going back to 1945, the S&P has risen more than 15% in eight quarters and following those quarterly gains, it rose 100% of the time in the following quarter with an average increase of at least 10%. Stocks are higher as the week kicks off.

Courtesy of Mortgage Market Guide 

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