Daily Rate Update: March 18th-22nd

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Friday – March 22, 2019

The National Association of REALTORS(R) reports that sales of Existing Homes rose nearly 12% in February from January to an annual rate of 5.51 million annualized units, the largest month-over-month gain since December 2015. Sales were down 1.8% year-over-year. Gains were seen in the Midwest, South and West with little change in the Northeast. Unsold inventory is at a 3.5-month supply, below 6-months that is seen as normal. The median home price rose 3.6% year-over-year to $249,500. A solid report as the spring buying season gets underway.

Freddie Mac reports that given mortgage rates have declined and a strong labor market should attract potential home buyers this spring and could propel the housing market to greener pastures in 2019. Mortgage rates have declined in 2019 from 2018 and should average 4.5% this year before rising to 4.8% in 2020. Total mortgage originations for single-family homes are expected to increase 1.6% to $1.67 trillion this year with similar levels seen in 2020. Freddie Mac went on to forecast that total home sales are expected to regain momentum this year.

Courtesy of Mortgage Market Guide

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Thursday – March 21, 2019

Mortgage rates continued to decline in the latest survey due in part to low inflation levels, a slowing global economy along with a dovish tone from the Federal Reserve. Freddie Mac reports that the 30-year fixed-rate mortgage fell three basis points to 4.28% with an average 0.40 in points and fees. It is the lowest rate seen since February 8, 2018. Low rates, improving home affordability and more housing inventory than last year sets up for a solid spring buying season.

Fannie Mae released its March 2019 Economic and Housing Outlook showing lower growth while home sales are expected to stabilize. For all of 2019, Gross Domestic Product is expected to come in at 2.2%, below the 3.1% seen in 2018 due in part to the fading fiscal impact of the Tax Cuts and Jobs Act. Fannie Mae expects housing demand to increase due to a solid labor market, low rates and strong household formation.

Americans filing for first-time unemployment benefits fell in the latest week and hover near 50-year lows. A strong labor market coupled with a solid U.S. economy have left employers looking for good candidates to fill open positions. Weekly Initial Jobless Claims fell by 9,000 in the latest week to 221,000. The four-week moving average of claims, which irons out seasonal abnormalities, rose 1,000 to 225,000.

Courtesy of Mortgage Market Guide

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Wednesday – March 20, 2019

Mortgage rates continued to edge lower in the latest week due to ongoing low inflation levels coupled with slowing global growth. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage fell nine basis points to 4.55% for the week ending March 15. That rate carries 0.42 in points. The Refinance Index rose 4% while the Purchase Index was essentially unchanged. The Market Composite Index, a measure of total mortgage loan application volume, rose 1.6% with rates at favorable levels.

It’s Fed Day! The Fed will release its monetary policy statement at 2:00 p.m. ET along with economic projections and an interest rate forecast. Fed Chair Powell will hold a press conference at 2:30. There is a near zero percent chance of a hike to the short-term Fed Funds Rate, but what the statement says regarding the ending of the balance sheet runoff will be key. In addition, what Mr. Powell says in his press conference will be closely scrutinized.

Courtesy of Mortgage Market Guide

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Tuesday — March 19, 2019

Foreclosure activity continued to decrease in February due in part to rising wages and a strong labor market. ATTOM Data Solutions reports that foreclosure filings – default notices, scheduled auctions and bank repossessions – declined 3% from January to February and were down 11% from February 2018 to February 2019. It was the eighth consecutive annual drop in foreclosure activity. In addition, bank repossessions were down 7% month-over-month and fell 12% from a year ago.

U.S. stocks are rallying today as the Federal reserve members kick off their Federal Open Market Committee meeting. Stocks are higher in anticipation of a dovish Fed when the statement is released on Wednesday. The closely watched S&P 500 has traded higher the last five out of six days and is up over 4% since the March 8 low and is just 80 points shy of hitting a new all-time high.

Courtesy of Mortgage Market Guide

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Monday – March 18, 2019

Home builder confidence remained steady in early March due in part to lower price points along with increased affordability of affordably priced homes. The National Association of Home Builders reports that its Housing Market Index came in at 62 versus 63 expected and matched the 62 reading in February. Any number over 50 indicates that more builders view conditions as good than poor. “Builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, CT.

Freddie Mac recently released data on the current state of U.S. household real estate worth. As of the end of the fourth quarter of 2018, U.S. households owned real estate worth over $25 trillion and have mortgage debt of just under $10 trillion for over $15 trillion in net homeowner equity. In the fourth quarter of 2018, an estimated $14,8 billion in net home equity was cashed out during the refinance of conventional prime-credit home mortgages. That is down from $20.4 billion a year earlier and way below the $104.8 billion during the second quarter of 2006.

The members of the Federal Reserve will convene on Tuesday to discuss the current state of the US economy and monetary policy with the statement being released at 2:00 p.m. ET on Wednesday. At 2:30, Fed Chair Powell will hold a press conference. There is a zero percent chance of a hike to the Fed Funds Rate but what the statement reads and what Powell says, could impact the markets.

Courtesy of Mortgage Market Guide

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