October 15th, 2014
Stock market selloffs, fears that Europe’s faltering economy will create drag for the rest of the world, and perhaps even the Ebola “epidemic” has helped drive down mortgage rates to their lowest levels in 16 months.
“Rates dropped to the lowest level since June 2013 on news that the Federal Reserve has more reservations about the health of the U.S. and global economy than expected, which in turn, may delay rate hikes,” said Erin Lantz, vice president of mortgages at Zillow.
Investors are seeking a safer place to park their money and are doing so in bonds and mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.
Low interest rates have also affected the volume of mortgage applications. According to the latest data from the Mortgage Bankers Association, applications increased 5.6% last week from the previous week.
“Growing concerns about weak economic growth in Europe caused a flight to quality into U.S. assets last week, leading to sharp drops in interest rates. Mortgage rates for most loan products fell to their lowest level since June 2013,” said Mike Fratantoni, chief economist at MBA. “Refinance application volume reached the highest level since June 2014 as a result, with conventional refinance volume at its highest since February 2014.”
October 13th, 2014
For years we have gone through a tepid recovery from a very deep recession. And all along we have indicated that we don’t recover from such an event if Americans are not working. Year after year we waited and waited. Well, the wait is over. The recovery in jobs is more than underway, it has arrived. The average of 220,000 jobs added each month thus far this year — and the unemployment rate dropping below 6.0% — is just what the doctor ordered in this regard. This is not to say that we are all the way back. Many of the jobs created have been lower paying jobs, which has held back the pace of personal income growth. In addition, the low labor participation rate tells us that if jobs keep getting created, we will have to absorb many returning to the labor market.
October 10th, 2014
“At current foreclosure rates, the shadow inventory could fall below 500,000 units by year-end, which could provide a solid boost to the recovery in housing in 2015.”
This is extremely positive for the future of the housing market. As foreclosed upon homes continue to drop, the inventory of new homes and future purchases to be made may begin to thrive as buyers become more positive about the economy and how it affects their bottom line dollar.
October 9th, 2014
Currently, Americans are experiencing the tightest credit market in 16 years. And according to a new report, they’ll have to wait at least three more years until it becomes easier to get a mortgage.
In a report published by New York City-based investment banking firm Keefe, Bruyette & Woods, three years is the minimum amount of time it will take for Congress to reach an agreement over the future of Fannie Mae and Freddie Mac. The GSEs own or guarantee almost half of all U.S. mortgages.
Credit availability is so tight that even former Federal Reserve Chairman Ben Bernanke can’t get his mortgage refinanced, despite earning a reported $200,000 to $400,000 for a speech. According to real estate information firm CoreLogic, credit availability for home purchases in May was about a third of what it was in 1998.
Following the housing bust, banks became hesitant about lending because they had to repurchase billions of dollars of bad mortgages they sold to Fannie Mae, Freddie Mac and private investors. Banks are afraid if they loosen their standards, the same thing will happen again and want legislation to protect them.
Banks aren’t the only ones who want protection; bond investors also want legislation to protect them from banks.
Earlier this year, Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) introduce a bill that would dismantle Fannie and Freddie and replace them with a new federal mortgage insurer.
The bill has received opposition and was thought to be dead in the water when six key Senate Democrats withdrew their support. The group said they felt the bill needed a major revision.
October 7th, 2014
Fixed rates were stable in the past week. Freddie Mac announced that for the week ending October 2, 30-year fixed rates eased to 4.19% from 4.20% the week before. A year ago, 30-year fixed rates were at 4.22%, slightly higher than today’s levels. The average for 15-year loans was unchanged at 3.36%.*
However, ABBA First Mortgage offers better than market rates for better than market clients. Today’s fixed rate for 30 year fixed rate mortgages start at 3.99% with no points and our fixed rate 15 year mortgage starts at 2.99% with no points. These rates include improvements both yesterday and today.
(*Rates indicated do not include fees and points and are provided for evidence of trends only.)
Please call ABBA First toll free at 1-866-676-3349 to obtain a customized quote showing what we can do for you to save you money!
September 30th, 2014
• Fixed rates eased back a bit in the past week after rising the previous week.
• Freddie Mac announced that for the week ending September 25, 30-year fixed rates eased to 4.20% from 4.23% the week before while ABBA First Mortgage, Inc has remained at better than market rates for our better than market borrowers (4.125% paying a credit towards closing costs on loans $100k and above).
• The average for 15-year loans also decreased slightly to 3.36%.
• ARMs were mixed, with the average for one-year adjustable rates remaining at 2.43% and five-year adjustable rates increasing to 3.08%.
• A year ago, 30-year fixed rates were at 4.32%.
• Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans were slightly changed with the rate on the 30-year fixed down three basis points. Meanwhile, existing home sales dropped 1.8 percent in August to a seasonally-adjusted annual rate of 5.05 million. Sales of new single-family homes surged 18.0 percent in August to an annual pace of 504,000 units. Also, the Federal Housing Finance Agency reported house prices rose just 0.1 percent on a seasonally-adjusted basis in July, and were up 4.4 percent over the past year.”
(Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.)
September 26th, 2014
The drop in stocks is adding a little support to the bond and mortgage markets although so far not a lot of improvement in rates and MBS prices given the strong declines in stocks this week. Investors and traders are wanting to think that a serious correction may be ahead; as long as that thought permeates there will not be much of a decline. The general consensus is still bullish for stocks; the bulls see the current decline as a buying opportunity, but another day like yesterday that thought will fade quickly.
September 24th, 2014
Banks were responsible for all the reported job cuts. Mortgage employment at credit unions and non-banks, meanwhile, edged up slightly.
North Carolina, home of Bank of America, saw the worst job losses, according to the report. In June alone, BOA gave 540 Charlotte-based employees their walking papers. In total, BOA eliminated 3,900 positions in the second quarter.
September 23rd, 2014
ABBA First will keep an eye on the Middle East and how it may affect our rate environment. Concerns abound as we see the first air strike of Syria and the unrest becomes war! Sadly, this typically has a direct correlation on the markets with rates being poised to improve as US Treasury bonds tick up in price.
Last week the Markets
• Fixed rates ticked up slightly last week, but remained near their lows for the year.
• Freddie Mac announced that for the week ending September 11, 30-year fixed rates rose slightly to 4.12% from 4.10% the week before.
• The average for 15-year loans also ticked up slightly to 3.26%.
• Adjustables rose slightly as well, with the average for one-year adjustables moving up to 2.45% and five-year adjustables increasing to 2.99%.
• A year ago 30-year fixed rates were at 4.57%.
• Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans were up slightly this week, following the increase in 10-year Treasury yields, despite last week’s disappointing employment report. The U.S. economy added only 142,000 jobs in August, after a 212,000 gain in July and a 267,000 increase in June. The unemployment rate fell to 6.1 percent in August from 6.2 percent the previous month.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.
September 18th, 2014
“The best place for a borrower to get a mortgage is at a broker. Brokers have more options than any mortgage bank. Mortgage brokers have all different lenders they can try,” he said. “When I have a friend who needs a loan, I always refer him to a broker, because that’s going to be where he gets the best deal. Consumers want the best deal for them, and mortgage brokers are the best way to go.” This is a quote from UWM President Mat Ishbia. “They’re the most educated mortgage professionals, especially now. They have to go through all the licensing, all the testing,” he said. “Banks don’t have to have their loan officers go through all that testing. They don’t have that scrutiny. The ones that are around today, especially – who’ve been through QM (Qualified Mortgage) and all the regulatory rules – are some of the best mortgage professionals around.” ABBA First Mortgage leads the way with loan officers that have over 25 years of combined education, testing and experience in the mortgage industry. With lower than market rates for better than market borrowers, it makes all the sense in the world to obtain your next mortgage through them.