Shelter Six:  Low Housing Inventory Being Aided by Strong New Construction

April 19, 2021 by · Leave a Comment 

Nationally, March Housing Starts jumped a stronger-than-expected 19% from February to the fastest pace since 2006.

Building Permits increased nearly 3% to 1.77M units, reflecting a quick snapback from the weather-induced downturn in February.

With such strong housing metrics, it is not surprising that Homebuilder Confidence continues to hover around all-time highs.

Consumers, armed with fresh stimulus, robust savings, and pent-up demand were out in full force in March as Retail Sales figures jumped nearly 10% following a decline of 2.7% in February.

March’s Consumer Price Index (CPI) was 2.6% higher than a year ago, up from 1.7% last month, and the largest annual rate of increase since August 2018.

Surprisingly, rates fell last week because it is believed that the stimulus checks were the catalyst for such strong Retail Sales figures, and that the high inflation is temporary and will settle back down in a few months.

Rate Update

Rates have spent most of April gradually dropping lower. Mortgage News Daily’s Conforming Purchase 30-Year Fixed-Rate fell from 3.29% to 3.18% last week.

This Week

It will be a light week for economic data with Existing Home Sales being released on Thursday and New Home Sales on Friday.

Shelter Six:  Economy Hitting on All Cylinders Right Now

April 12, 2021 by · Leave a Comment 

A deeper dive into the massive 916K new jobs added in March indicates that 110K of them were in construction, which could really help with the home inventory shortage.

Also promising is a Fannie Mae survey showed the number of homeowners indicating that it is a “good time to sell” surged to the highest level since before the pandemic.

The economy can be divided up into manufacturing and service sectors, and both are really hitting on all cylinders right now.

It was already reported that manufacturing surged to the strongest level since 1983, and now the service sector is up to the highest level since the data was first tracked in 1997.

Jumbo now only requires 10% down payment up to a $1M loan with a 680 credit score, or up to a $1.5M loan with a 720 credit score.

VA is the first to discontinue the more lenient temporary COVID policies that allowed for exterior-only appraisals and VOE waivers within 10 days of closing.

Rate Update

Mortgage rates fell last week to the lowest level in a month. Mortgage News Daily’s Conforming Purchase 30-Year Fixed-Rate decreased from 3.39% to 3.29%.

This Week

The Consumer Price Index (CPI) will come out on Tuesday, Retail Sales on Thursday, and both Existing Home Sales and Housing Starts on Friday.

Shelter Six:  Job Growth, Manufacturing, and Consumer Confidence Surge

April 5, 2021 by · Leave a Comment 

In March, the economy added 916K news jobs, significantly greater than expected, and the national Unemployment Rate dropped from 6.2% to 6%.

March was also a huge month for manufacturing as they key sector index surged to the highest level since 1983.

U.S. Consumer Confidence jumped to the strongest level since before the pandemic thanks to the vaccine, reopening of the economy, and stimulus checks.

February Pending Home Sales fell 10.6% from January with weakness primarily attributed to a shortage of inventory.

National bans on both foreclosures and evictions have been extended from the end of March to the end of June.

Despite speculation that levels might drop, new HUD Secretary, Marcia Fudge, said that FHA has no short-term plans to change MIP levels.

Rate Update

Mortgage News Daily’s Conforming Purchase 30-Year Fixed-Rate increased slightly from 3.36% to 3.39% last week.

This Week

The ISM Services Index will come out on Monday and the PPI inflation data on Friday.

Shelter Six:  Home Sales Down in February

March 29, 2021 by · Leave a Comment 

Existing-Home Sales fell 7% from January but still were 9% higher than a year ago. The drop was attributed to severe weather throughout the country and rising interest rates.

New-Home sales dropped 18% from January but were still up 8% over last year.

The median existing-home price was 16% higher than last year and up to a new record for the month of February at $313,000.

Inventory levels were down 30% from a year ago to the lowest since 1982 and stand at a 2-month supply.

A key index showed inflation just 1.4% higher than a year ago and well below the Fed’s stated target level of 2%. Investors continue to be worried about inflation surging but the data is not revealing that thus far.

The number of loans in forbearance are dropping fast. Black Knight reports that the number of active plans declined by 5% (135K) over the past month.

Rate Update

After reaching the highest levels in many months, mortgage rates ended last week a little lower due to weaker than expected housing reports and tame inflation data.

This Week

The ISM National Manufacturing Index will come out on Thursday and the key monthly Employment report on Friday.

Shelter Six: Fed Forecasts Strongest Growth in Decades

March 22, 2021 by · Leave a Comment 

As expected, the Federal Reserve made no changes to short-term rates last week and its statement contained no significant surprises.

The Fed also did not give any indication that it will adjust its current pace of bond purchases anytime soon. This is important because rates will rise when it does.

The Fed’s is also forecasting amazingly strong growth in 2021 with GDP surging 6.5%, which would be the strongest level in decades.

A new MBA report suggests that we are presently in the calm before the home-buying storm as 4M millennials will reach peak home-buying age during 2021.

Home construction was negatively impacted by poor weather conditions in February, which caused housing starts to fall by 10% from January.

Lumber prices are up an astonishing 200% since April, driven by shortages and high demand. This has added an average $24K to the price of a new home.

Rate Update

Last week, rates moved up to the highest point in a year. Mortgage News Daily’s Conforming Purchase 30-Year Fixed-Rate increased from 3.32% to 3.45%.

This Week

Existing Home Sales are due out on Monday, New Home Sales on Tuesday and both Personal Income and the Core PCE Price Index on Friday.

Shelter Six: Rates Higher on 2nd Homes and Investment Properties

March 15, 2021 by · Leave a Comment 

Last week, to reduce portfolio risk, Fannie Mae announced a new 7% limit on the total amount of loans they will purchase secured by 2nd Homes and Investment Properties.

To limit volume and avoid getting too close to the 7% limit, lenders reacted by increasing Conforming rates on these types of loans by approximately .125% to .25%.

U.S. home-price appreciation continues to surge thanks to a combination of strong housing demand and record-low inventory.

An FHFA 4th Quarter report showed home-prices appreciating by 10.9%, the strongest annual change on record (previous high was 10.7% increase 3Q 2005).

Strong appreciation has led to the average equity in a U.S. home increasing 16.2% over the previous year, according to a 4th Quarter CoreLogic report.

February’s key inflation report showed inflation just 1.3% higher than a year ago, down from an annual rate of increase of 1.4% last month and 2.3% last year.

Rate Update

Rates have now climbed up to the highest point in a year. Mortgage News Daily’s Conforming Purchase 30-Year Fixed-Rate is 3.32%.

This Week

Wednesday is the big day this week with Retail Sales and Housing Starts being released and a Fed meeting concluding. No policy changes are expected but rates could jump up depending on what the Fed says and how markets react.

Shelter Six: FHA/VA Credit Scores Down to 680

March 8, 2021 by · Leave a Comment 

Shelter’s minimum credit score on FHA, VA, and USDA loans has dropped to 580.

The economy gained 379K jobs in February, much stronger than the 175K jobs that had been expected.

The Unemployment Rate dropped from 6.3% to 6.2%.

Average Hourly Earnings increased 5.3% over the last year.

Key economic reports showed that both the Manufacturing and Services sectors of the economy continue to expand, with Manufacturing at the highest level since 2004.

Comments from Fed Chair Jerome Powell did not offer any new tactics to fight inflation, which caused short-term bond yields to spike to the highest level in a year.

Rate Update

Mortgage News Daily’s Conforming 30-Year Fixed-Rate starts this week at 3.29%, up slightly from the previous week’s 3.27%.

This Week

The Consumer Price Index (CPI), a widely followed monthly inflation report that looks at the price change for goods and services, is due out on Wednesday.

Shelter Six: Mortgage Rates Surge to Highest Level Since June

March 1, 2021 by · Leave a Comment 

Mortgage rates have gone up about .25% each of the last two weeks. The surge is mostly due to optimism around the pandemic and concerns that inflation is taking off.

January New Home Sales were up 4.3% from December and 19.3% from a year ago.

January Pending Home Sales, although down 2.8% from December, were the highest on record for a January and up 13% from a year ago.

The Fed met last week, and their plan is clearly to keep short-term rates low while they continue to buy a massive amount of bonds.

The final 2020 S&P Case-Shiller US National Home Price Index showed a gain of 10.4% for the year, the first double-digit increase in home appreciation since Jan 2014.

There is a lot of talk about a potential FHA Mortgage Insurance Premium cut that could also lead to PMI companies following suit.

Rate Update

Friday’s Mortgage News Daily Conforming Purchase 30-Year Fixed-Rate averaged 3.27%, which was up from 3.04% the previous week, and 2.86% the week before that. Rates are now at the highest point since last June.

This Week

The ISM National Manufacturing Index will come out on Monday, ISM National Services Index on Wednesday, and the monthly Employment report on Friday,

Shelter Six: Strong Economic Data Putting Pressure on Mortgage Rates

February 22, 2021 by · Leave a Comment 

January Existing-Home Sales increased for the seventh time in eight months and were a whopping 24% higher than a year ago.

The Median National Existing-Home price was $303,900, 14% higher than last January.

Inventory levels, however, remained at a 1.9-month supply nationally, down 26% from a year ago.

Retail Sales jumped a shocking 5.3% from December, much more than expected, and at the 4th fastest pace since records began in the early 1990’s.

The bad weather in Texas has taken almost 40% of the U.S. crude oil production offline, which contributed to oil prices pushing to the highest level since before the pandemic.

Oil prices, as well as last week’s very strong Producer Price Index figures, have both caused concerns that inflation will take rates higher.

Rate Update

Mortgage rates jumped nearly 25% last week on the heels of strong economic data, inflation concerns, improving Covid numbers, and an impending large stimulus package. Rates are up to the highest level in three months but still extremely low.

This Week

Markets will be listening to Fed Chair Jerome Powell this week, as he delivers his semi-annual update to Congress. Personal Income and the Core PCE Price Index will also be released on Friday.

Shelter Six:  Potentially More Homeowners Willing to List

February 15, 2021 by · Leave a Comment 

Fannie Mae’s monthly consumer survey indicated that 57% of people contacted said they felt it was a good time to sell a home, up from 7% in December.

The median price of a single-family home climbed 14.9% to $315K over the 4th Quarter, the fastest pace since the data first started being kept in 1990.

Non-US citizens classified under the Deferred Action for Childhood Arrivals (DACA) are now eligible for FHA mortgages as long as they have a valid SSN and proof of eligibility to work in the U.S.

With existing forbearance plans about to start expiring in March, the forbearance period on Conforming loans has been extended by three additional months to 15 months.

Last week’s key inflation report came in lower than expected as January’s Core CPI was just 1.4% higher than a year ago (was 1.6% last month and 2.3% last year).

Oil prices continue to quietly tick higher, a sign that mortgage rates will also eventually follow their lead.

Rate Update

It was a quiet week for mortgage rates. Mortgage News Daily’s Conforming Purchase Average 30-Year Fixed-Rate ended last week at 2.86%.

This Week

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

Next Page »