Shelter Six: Conforming Loan Limit Shoots Up to $548,250

The 2021 Maximum Conforming loan limit for loans purchased by Fannie Mae and Freddie Mac is increasing 7.42% from $510,400 to $548,250.

The 2-Unit limit is increasing to $702,000, the 3-Unit limit to $848,500, and the 4-Unit limit to $1,054,500.

October New Home Sales remained steady around 1M units for the fourth straight month.

The October Core PCE Price Index was just 1.4% higher than a year ago, down from last month’s 1.5%, and well below the Fed’s stated target of 2%.

Great news for 2021 home sales, a recent Lending Tree survey found that 46% of Americans are thinking about moving within the next year.

Respondents indicated that 44% are seeking a reduction in living expenses, 27% a larger home, 27% different home features, and 12% a different part of town in which to live.

Rate Update

There has never been a better time to lock in a rate as pandemic and economic concerns have driven rates back down near all-time lows and well under 3%.

This Week

The highly anticipated monthly Employment figures are due out on Friday.

November 28, 2020 by · Leave a Comment

Shelter Six: October Home Sales Surge to Best Level Since 2006

October economic reports released last week painted a strong picture of recovery starting with Existing-Home Sales, which were 4% higher than the previous month and to the best level since 2006.

The Median Existing-Home Price was 16% higher than a year ago and up to a record $313K.

Retail Sales increased for the 6th straight month and were .3% higher than in September.

Single-family Housing Starts rose 6% from September, were 29% higher than a year ago, and are now up to the highest level since 2007.

Builder Confidence surged to a record high level for the 3rd straight month.

Housing Inventory levels were down 20% from a year ago to just a 2.5-month supply nationally, well below the 6.0-month supply considered a healthy balance between buyers and sellers.

Rate Update

Last week’s positive news about progress on a Covid vaccine was offset by rising coronavirus cases with the net result being rates remaining unchanged and near all-time lows.

This Week

New Home Sales, Durable Orders, and the Core PCE Price Index, the inflation indicator favored by the Fed, will all be released on Wednesday.

November 23, 2020 by · Leave a Comment

Shelter Six:  Mortgage Rates Holding Steady

Pfizer’s vaccine report last week caused rates to immediately shoot up .125%, however, this week’s equally optimistic Moderna vaccine report didn’t cause rates to budge.

October Consumer Price Inflation figures were just 1.6% higher than a year ago, a little higher than the last few months but still far below 2.3% pre-pandemic readings.

Fannie Mae’s October Home Purchase Sentient Index rose for the fifth time in six months as respondents claiming it is a good time to buy increased 9% from September.

Respondents claiming it is a good time to sell increased 6% from September.

After peaking in June at 8.55%, forbearance figures decreased to only 5.2% of all mortgages, as of Nov 10 per Black Knight.

The maximum Conforming loan limit is expected to increase over the next few weeks from $510,400 to somewhere between $545K and 555K.

Rate Update

Rates ended the week with little change and near record lows. The main thing driving rates right now is the pandemic. Pessimistic concerns influence rates lower, and vice versa.

This Week

Retail Sales will be released on Tuesday, Housing Starts on Wednesday, and Existing Home Sales on Thursday.

November 16, 2020 by · Leave a Comment

Shelter Six:  Mortgage Rates Drop Near All-Time Lows

The economy gained a substantial 638K jobs in October, which was close to expectations.

More than half of the 22 Million jobs lost in March and April have now been recovered.

The Unemployment Rate plunged from 7.9% to 6.9%, far below the consensus forecast.

Thursday’s Fed meeting produced no surprises and had no impact on mortgage rates.

Black Knight, in its September Mortgage Monitor report projected that, for the first time ever, the market is on track to top $4 Trillion in mortgage originations in 2020.

Temporary mortgage underwriting flexibilities related to the pandemic have been extended for most types of loans with application dates prior to December 31st.

Rate Update

The bond market liked the mixed election / divided government results and purchase mortgage rates fell last week back down near all-time low levels.

This Week

The JOLTS report will be released on Tuesday and the Consumer Price Index on Thursday. Mortgage markets will be closed on Wednesday in observance of Veterans Day.

November 9, 2020 by · Leave a Comment

Shelter Six:  Homeownership Rate Surges to 70.8% in the South

GDP surged at an annualized rate of 33.1% in the 3rd Quarter. This was a magnificent rebound after declining 31.4% in the previous 2nd Quarter.

September New Home Sales dropped 4% from August but remained near the best levels in the last 14 years and were 32% higher than a year ago.

After four months of gains, Pending Home Sales were down a tad but still at the second highest level on record.

The number of serious mortgage delinquencies dropped by 43K in September, which was the first improvement since the start of the pandemic, according to Black Knight.

The U.S. Homeownership Rate was 67.4% nationally (70.8% in the South) in the 3rd Quarter, up 2.6% from a year earlier, according to the U.S. Census Bureau.

The FHFA Home Price Index indicates that Conforming loan amounts will most likely increase around $40K at the end of November.

Rate Update

It is election week, so expect volatility. Despite significant economic and pandemic news over the last week, mortgage rates continue to hold steady and near record low levels.

This Week

Tuesday’s election will be the focal point. The Fed also meets on Thursday and Employment figures are due out on Friday.

November 2, 2020 by · Leave a Comment

Shelter Six:  September Home Sales Surge

September Existing-Home Sales surged 9% from August and 21% from a year ago to the best level since May 2006, as the Median Existing-Home Price pushed 15% higher than a year ago.

September National Inventory levels were down 19% from a year ago to a 2.7-month supply and remain the primary obstacle to even stronger sales activity.

Builder Confidence shot up in October from 83 to a record-high index score of 85, according to the NAHB.

The Mortgage Bankers Association projects 2021 purchase originations to rise by 8.5% to $1.54 Trillion, which would be an all-time high.

MBA projects total 2021 originations (including refinances) to be $2.5 Trillion, which would be a drop off from this year’s projected $3.2 Trillion.

The CFPB extended the “GSE Patch” indefinitely last week, preventing the Debt Ratio on most loan programs being capped at a rigid 43% effective on Jan 10th of next year.

Rate Update

The uncertainties around the election and a potential stimulus package are putting some upward pressure on rates right now, but rates continue to hold steady around 3%.

This Week

New Home Sales will be released on Monday, 3rd Quarter Gross Domestic Product (GDP) on Thursday, and the Core PCE Price Index on Friday.

October 26, 2020 by · Leave a Comment

Shelter Six:  Retail Sales Surge

Expect mortgage rates to be more volatile over the next few weeks with the election drawing near and continued covid uncertainty.

Remember, when it comes to rates, bad news is good news.  The more uncertainty, confusion, or weakness there appears to be, the more rates will hold steady or even drop.

Likewise, the more stable things are or if the fight against covid goes better than expected, the more likely rates will push up.

Retail Sales jumped 1.9% from August, have shown 5 straight months of gains, and are now above the levels seen prior to the pandemic.

Consumer spending accounts for over two-thirds of all economic activity in the U.S., so the Retail Sales figures are a key indicator of growth.

Contributing to the low rates this year is low inflation, and September’s Core CPI figure of only 1.7% indicates that low inflation seems here to stay.

Rate Update

Last week’s major economic data was mixed and had little impact, but an increase in coronavirus cases around the world helped rates hold steady around 3% and near record lows.

This Week

This will be a very light week for economic data with the spotlight on the housing sector.  Existing Home Sales will be released on Tuesday and Housing Starts on Thursday.

October 19, 2020 by · Leave a Comment

Shelter Six:  Mortgage Forbearance Figures Plummet

The number of mortgages in active forbearance saw the largest one-week decline since the pandemic began, according to Black Knight.

As of October 6, forbearance figures fell 18% to only 5.6% of all active mortgages, bringing the total number of plans below 3M for the first time since mid-April.

The catalyst for the massive drop in forbearance figures is the result of the initial people entering forbearance hitting the end of their initial 6-month term.

A key index measuring the strength of the services industry shot up much more than expected in September, the fourth straight month of solid recovery.

According to a monthly Fannie Mae survey, 83% are not concerned about losing their job, and 56% think it is a good time to sell a home (up from 48% the previous month).

Temporary mortgage underwriting flexibilities have been extended for loans with application dates prior to Oct 31 for Conforming, FHA, and VA, and to Nov 30 for USDA.

Rate Update

Rapidly shifting headlines about government stimulus caused interest rate volatility last week, but rates ended the week with little net change and near record lows.

This Week

The Consumer Price Index will come out on Tuesday while Retail Sales will be released on Friday.

October 12, 2020 by · Leave a Comment

Shelter Six:  Strong Employment Figures Keep Economic Momentum Moving Forward

The economy added a solid 661K jobs in August and the Unemployment Rate dropped from 8.4% to 7.9% after peaking at 15% in April.

The economy has now recovered roughly half of the 22 Million jobs lost in March and April.

August Pending Home Sales jumped 8.8% from July and 24% from a year ago to an all-time high.

The August Core PCE Price Inflation Index was only 1.6% higher than a year ago and well within the Fed’s stated 2% target.

News that President Trump tested positive for the coronavirus initially caused mortgage rates to drop slightly (bad news typically pushes rates lower).

Upbeat news around a potential fiscal stimulus package, however, caused rates to push higher (a stimulus package could put upward pressure on rates).

Rate Update

The net effect was little change as rates continue to hold steady near record lows and will most likely stay super low until good news regarding the pandemic emerges.

This Week

The ISM National Services Index is due out on Monday, the JOLTS report on Tuesday, and minutes from the September 16 Fed meeting on Wednesday.

October 5, 2020 by · Leave a Comment

Shelter Six:  Stellar Housing Rebound Continues

The spectacular housing rebound continued in August with both Existing-Home and New-Home Sales hitting the highest levels since 2006.

Existing-Home Sales were up 2% from July and 11% from last year, while New-Home Sales were up 5% from July and 43% from last year.

Extremely limited inventory remains the primary trouble spot as levels were down 19% from a year ago to a 3-month supply nationally, which was the lowest level since 2004.

Lack of inventory and surging lumber prices continue to drive up home prices, which were up 11% nationally in August from a year ago.

Mortgage forbearance figures continue to dwindle and are down to a five-month low of 6.8% of all mortgages, per Black Knight as of Sept 22.

Starting Oct 1, there will be potential temporary lapses with both the USDA Rural Housing Program and the National Flood Insurance Program.

Rate Update

Mortgage Rates were flat last week near record lows and will most likely hold steady until good news regarding the pandemic emerges.

This Week

Employment figures are the most highly anticipated economic data of the month and are due out on Friday.

September 28, 2020 by · Leave a Comment

Next Page »