Daily Rate Update: October 15th-19th

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Friday – October 19, 2018

The National Association of REALTORS® reports that Existing Home Sales declined 3.4% in September from August to an annual rate of 5.15 million units versus the 5.30 million expected. All four major regions of the country saw no gains in September. Sales were also lower by 4.1% from a year ago. Inventories increased during the month to a 4.4 month supply from 4.3 in August while the median existing-home price rose 4.2% to $258,100.

Ellie Mae released its Origination Insight Report for September showing that refinance closings in September declined to 29% from 32% as mortgage rates edged higher. In addition purchase closings rose to 71% from 68% while the closing rate for all loans remained at 71.7%, which is the highest since August 2017.

With Halloween right around the corner, retailers will be looking to cash in on the first big shopping spree from consumers ahead of the November-December holiday shopping season. The National Retail Federation (NRF) reports that total 2018 Halloween spending will hit $9 billion, the second-highest number since the Great Recession ended back at the end of 2009. The NRF’s Halloween Spending Survey revealed that seven in 10 consumers will celebrate Halloween in 2018 spending an average of nearly $90 per person. Purchases will range from everything to decorations to candy to costumes.

Courtesy of Mortgage Market Guide

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Thursday – October 18, 2018

After rising seven out of the last eight weeks, mortgage rates edged lower this week. Freddie Mac reports that the 30-year fixed-rate mortgage fell five basis points this week to 4.85% with an average 0.50 in points and fees. Freddie Mac said, “The modest decline in mortgage rates is a welcome respite from the rapid increase in rates the last few weeks. While the housing market has clearly softened in reaction to the rise in mortgage rates, the economy and consumer sentiment remain very robust and that will sustain purchase demand, particularly in affordable markets and neighborhoods.”

Fannie Mae released its October 2018 Economic and Housing Outlook today saying that 2018 and 2019 economic growth outlook is steady as housing falters. The report revealed that economic growth (Gross Domestic Product) is forecasted to increase 3% in 2018 and 2.3% in 2019. After a strong 2018 second quarter, growth will ease a bit due to a deceleration in consumer spending and business investment growth. Fannie went on to say, “Residential fixed investment is expected to have fallen for a third consecutive quarter, with home sales and mortgage demand continuing to soften amid rising interest rates. While the amount of for-sale inventory of existing homes is finally showing some improvement, it remains tight in many areas of the country, especially in the lower-priced tiers.”

U.S. Stocks have been on a seesaw rise this week up big one day, down today. China trade issues, European debt woes along with the Federal Reserve signaling more rate hikes ahead were a few of the factors that raped up volatility. The Dow Jones Industrial Average was up nearly 600 points on Tuesday, slightly lower yesterday and down nearly 400 points today. Investors looking to secure some profits have also contributed towards today’s losses.

Courtesy of Mortgage Market Guide

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Wednesday – October 17, 2018

Construction of new homes declined in September from August, due in part to a drop in new construction in the South after Hurricane Florence hit North and South Carolina during the month. The Census Bureau reports that Housing Starts fell 5.3% in September from August to an annual rate of 1.201 million units, below the 1.221 million expected.

Total Housing Starts fell 13.7% in the South, the biggest decline since October 2015. Starts rose in the Northeast and West with a decrease in the Midwest. Housing Starts were up 3.7% from September 2017. Single-family starts, which makes up the bulk of residential housing, fell 0.9% from August but rose 4.8% from a year earlier. Multi-dwelling units, 5 or more, fell 12.9% month over month and rose 4.5% year over year.

The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of total mortgage loan application volume, fell 7.1% in the latest week. The MBA also reported that the refinance index fell 9% while the purchase index fell nearly 6%. The MBA went on to report that the 30-yr fixed-rate mortgage rose 5 basis points to 5.10%, the highest since February 2011. The jumbo rate was 4.98%, FHA 4.99%, both near unchanged. Those rates do carry around 0.50 point.

Courtesy of Mortgage Market Guide

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Tuesday – October 16, 2018

There was a record number of job openings in August as the economy and labor market continue to strengthen. The Labor Department reports that its JOLTS (Job Opening and Labor Turnover Survey) report saw a record high 7,136,000 job openings at the end of August. The August number exceeds the July number of 7,077,000. Job openings rose in government, construction, health care, financial and professional services.

Homebuilder confidence remained elevated in October due in part to lower lumber prices, which have considerably decreased from record-high levels seen in the summer. The National Association of Home Builders reports that its Housing Market Index rose one point to 68 where any number over 50 indicates that more builders view conditions as good than poor. “Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La.

Strong earnings from Morgan Stanley, Goldman Sachs and United Health are fueling the rise in Stocks this morning after the 4% loss in the S&P 500 last week. Fears of higher borrowing costs along with lingering trade issues fueled the decline as well as plain old profit taking. However, retail giant Walmart lowered its earnings forecast for the year. Netflix is set to report after the close of trading this evening.

Courtesy of Mortgage Market Guide

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Monday – October 15, 2018

Price cuts for listed homes on the markets pushed higher in August and are more prevalent in higher-cost neighborhoods. Trulia reports that in August 2018, 17.2% of U.S. homes listed on the market had a price cut, up from 16.7% a year ago. That was the highest level since 2014. Given the fact that soaring home prices are beginning to ease, and along with this report, the environment may be shifting in the buyers’ favor in the coming months. “Buyers should be encouraged by the signals we’re seeing in the market,” Trulia Housing Economist Felipe Chacon.

Heading into the all-important holiday shopping season, consumers held back on spending in September with big sales drops seen at bars and restaurants. The Commerce Department reports that Retail Sales rose a scant 0.1% in September from August and well below the 0.6% expected. The recent Hurricane Florence that hit the East coast in September could have had an impact on the numbers.

Iconic department store and 126-year old retailer Sears has filed for Chapter 11 bankruptcy amid declining sales and competition from online sellers. Sears was once the largest retailer in the U.S. staring out in Amazon-like fashion when it began selling goods through its famed catalog and delivering items to the consumer. At one point, Sears sold kit homes to the public that were delivered via rail transport and sold 70,000 homes in North America between 1908 and 1940.

Courtesy of Mortgage Market Guide

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