Fannie Mae’s November Home Purchase Sentiment Index reports that the US housing market remains solid despite rising economic negativity to its highest level in a decade

MBA Weekly Applications Survey December 8, 2021: Rates Drop; Refis Up

The Mortgage Bankers Association said Wednesday in its Weekly Mortgage Applications Survey for the week ending December 3rd that mortgage interest rates declined for the first time in four weeks, spurring an increase in refinancing activity. 

The Market Composite Index gained by 2% over the previous week on a seasonally adjusted basis. The unadjusted Refinance Index rose 9% from the prior week, and the refinance percentage of total mortgage applications grew to 63.9 percent from 59.4 percent the week before. 

The seasonally adjusted Purchase Index fell by 5% from the week prior. The FHA’s percentage of total applications grew to 9.9% from 8.9% the previous week. The share of overall applications submitted by veterans increased to 10.7%.

Home Purchase Sentiment Unfazed By Negative Economic SentimentM

Fannie Mae’s November Home Purchase Sentiment Index reports that the US housing market remains solid despite rising economic negativity to its highest level in a decade (HPSI).

In November, the index fell 0.8 points to 74.7, with 74 percent of consumers believing now is a good time to sell a property and 29 percent considering it is an excellent time to buy. The HPSI was down 5.3 points from the same time last year.

However, any bad economic sentiment has yet to convert into a meaningful decline in actual demand for purchase mortgages. According to Mark Palim, Fannie Mae’s deputy chief economist, most of the pessimism about the economy’s direction is likely due to inflation. He also added that “An even greater share of consumers (particularly those with low and moderate incomes) expect mortgage rates to go up in the next 12 months, which may be a signal that some households plan to pull-forward their home purchase plans; despite growing economic apprehension.” 

Weekly Jobless Claims Fall To 184,000,  Lowest Level In Over 52 Years

The Labor Department said Thursday that weekly unemployment claims fell to a new 52-year low last week as the US jobs market emerges from its pandemic-era rut.

The week ending December 4th saw 184,000 initial unemployment insurance claims, the lowest since September 6, 1969, when 182,000 were filed. Continuing claims increased 38,000 to slightly under 2 million, a week below the headline number. The four-week moving average for continuing claims, which smooths out weekly volatility, fell by 54,250 to 2.03 million.

Next weeks potential market moving reports are:

  • Monday, December 13th – No Report
  • Tuesday, December 14th – Small Business Index
  • Wednesday, December 15th – Home Builders’ Index, Federal Reserve FOMC Announcement
  • Thursday, December 16th – Initial Jobless Claims, Building Permits, Housing Starts
  • Friday, December 17th – No Report

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047

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According to a department head at ADP, private-sector job creation increased in October due to a surge in hiring in the hospitality sector.

Weekly Jobless Claims Better than Expected

Last week, the jobless situation in the United States improved once further, with initial unemployment insurance claims falling to a pandemic-era low.

On Thursday, the Labor Department said that initial jobless claims fell to 269,000 for the week ending October 30th, down 14,000 from the previous week and better than the Dow Jones forecast of 275,000.  The dip in filings coincides with a rollback of special programs implemented during the crisis, with the overall number of people getting benefits from all programs falling by 157,731 to 2.67 million.

Continuing claims fell 134,000 to a little over 2.1 million, a week behind the headline number.  All of the jobless figures have been at their lowest levels since March 14, 2020.

Refis Fall to Nearly 2-Year Low

The Mortgage Bankers Association stated in its Weekly Mortgage Applications Survey for the week ending October 29th that mortgage rates declined last week, but so did mortgage applications, particularly refinance applications

On a seasonally adjusted basis, the Market Composite Index fell 3.3 percent from the previous week. The Index fell 4% from the prior week on an unadjusted basis. The unadjusted Refinance Index fell 4%, while the refinance share of total mortgage applications dropped to 61.9 percent from 62.2 percent – both from the previous week. The seasonally adjusted Purchase Index fell 2% from the last week to its lowest point since January 2020. Compared to last week’s numbers, the FHA’s portion of overall applications fell to 9.2% from 10.4%; the VA’s portion fell to 9.9% from 10.6%, and the USDA’s share remained steady at 0.5 percent.

Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting, said purchase activity continues to be held back by high prices and low for-sale inventory. However, current applications levels still point to healthy housing demand. “MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022,” he said.

Companies Add 571,000 Jobs in October

According to ADP, a payroll processing firm, private-sector job creation increased in October due to a surge in hiring in the hospitality sector. Companies added 571,000 jobs in October, exceeding the Dow Jones’ forecast of 395,000 and coming in just ahead of September’s downwardly revised 523,000. It was the best job-seeking month since June.

The leisure and hospitality industry witnessed an increase of 185,000 jobs, despite being well below its pre-pandemic employment level. The sector is viewed as a measure of the economy’s recovery, which slowed over the summer due to a surge in the Covid delta version and a significant supply line clog.  Overall, 458,000 new jobs were created as a result of the sector’s expansion.

Meanwhile, 88,000 jobs were added in professional and business services, 78,000 in trade transportation and utilities, and 56,000 in education and health services. Construction and manufacturing created 54,000 and 53,000 jobs in the goods-producing sector, which added 113,000 jobs.

Next weeks potential market moving reports are:

  • Monday, November 8th – No Report
  • Tuesday, November 9th – NFIB Small-Business Index
  • Wednesday, November 10th – Initial Jobless Claims, Continuing Jobless Claims; Federal Budget
  • Thursday, November 11th – No Report
  • Friday, November 12th – Job Openings, Five-Year Inflation Expectations

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047

 

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As shown in a new survey from the National Association of Realtors (NAR), home affordability in the United States increased for the second month in a row in August Despite surging prices

Rates Fall For First Time in Over a Week

Intraday movements in the bond market and mortgage rates are closely followed. Mortgage rates rarely stay the same for more than five business days without decreasing at least once—even if only slightly. Thankfully, we finally saw some movement in rates declining which put an end to that trend (rates hadn’t improved since Monday).

Bonds initially reacted negatively to today’s inflation news (spoiler alert: it’s still high), but they eventually recovered and settled down. The 30-year Treasury bond auction that went better than expected added to the positive response in the bond market and the slight decline of interest rates.

Fed Could Begin ‘Gradual Tapering Process’ by Mid-November

According to the minutes from the central bank’s September meeting released Wednesday, Federal Reserve officials could begin lowering what seems like the never-ending interest rate assistance they’ve been providing to the economy as early as mid-November. Moreover, members believe the Fed is near to completing its economic goals and will soon begin normalizing policy by slowing the pace of its monthly asset purchases.

The Fed would gradually cut the $120 billion in monthly bond purchases, a practice known as tapering. According to the minutes, the central bank would likely begin by eliminating $10 billion in Treasury bonds and $5 billion in mortgage-backed securities each month. The Fed is now buying Treasurys worth at least $80 billion and MBS worth at least $40 billion. Should there be no setbacks, the target date to end the purchases would be mid-2022.

Affordability Improved in August Despite Surging Prices

As shown in a new survey from the National Association of Realtors (NAR), home affordability in the United States increased for the second month in a row in August. The National Association of Realtors’ Housing Affordability Index increased from 150.6 in July to 151.3 in August. However, it was still down from 165.8 in July.

The most affordable region was the Midwest, with an index value of 196.8 (median family income of $86,614 with the qualifying income of $44,016). The least affordable region remained the West, where the index was 114.9 (median family income of $94,372 and the qualifying income of $82,128).

Next weeks potential market moving reports are:

  • Monday, October 18th – National Association of Home Builders Index
  • Tuesday, October 19th – Housing Starts (SAAR)
  • Wednesday, October 20th – No Report
  • Thursday, October 21st – Initial Jobless Claims, Continuing Jobless Claims, Existing Home Sales
  • Friday, October 22nd – No Report

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at  (800) 216-1047.

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