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  • U.S. Housing Starts Fell 4.0% in JulyU.S. Housing Starts Fell 4.0% in July
    Aaron McCoy/Getty ImagesWASHINGTON—Home building in the U.S. fell for a third straight month, showing that rising labor and material costs continue to dent the pace of home construction. Housing starts, a measure of new-home construction, fell 4% in July from the prior month to a seasonally adjusted annual rate of 1.191 million, the Commerce Department said Friday. Residential building permits, which can signal how much construction is in the pipeline, rose 8.4% from June to an annual pace of 1.336 million. Economists surveyed by The Wall Street Journal had expected a 1.0% drop in housing starts and a 4.1% increase for permits last month. Housing-starts data are volatile from month to month and can be subject to large revisions. July’s 4% decline for starts came with a margin of error of 8.0 percentage points. Starts were up 0.6% from July last year and building permits were up 1.5% from July 2018. The Northeast saw the sharpest dip in housing starts with a decline of 13.8% from June. Building permits were also down 3.3% from the previous month in the region. Despite historically low mortgage rates and rising wages, the housing sector has been strained by a low inventory of affordable homes propelled… Read more »
  • Condo Buyers Will Soon Have an Easier Time Scoring a MortgageCondo Buyers Will Soon Have an Easier Time Scoring a Mortgage
    ewg3D/iStockBuyers are about to have an easier time scoring a mortgage to purchase a condo. A new policy announced this week should significantly expand the number of individual condo units as well as condo developments eligible for Federal Housing Administration financing. The government-backed mortgages are popular with first-time buyers because they require as little as 3.5% as a down payment, in many cases. But the vast majority of condos have not been eligible for FHA financing, which has been heavily restricted in the wake of the housing crisis that began in 2006. The new rules, which are expected to extend eligibility to 20,000 to 60,000 additional condo units, go into effect on Oct. 15. Condos tend to be popular with first-time buyers and retirees looking to downsize from single-family homes and their maintenance, as well as folks living in urban areas with limited space. They also tend to be cheaper than single-family homes. Nationally, condos and co-ops cost a median $260,100 in June—11% less than the median $288,900 price for single-family residences, according to the most recent National Association of Realtors® data available. The data included only existing homes and not new construction, which tends to cost more. “Condominiums have… Read more »
  • U.S. Mortgage Debt Hits Record, Eclipsing 2008 PeakU.S. Mortgage Debt Hits Record, Eclipsing 2008 Peak
    FREDERIC J. BROWN/AFP/Getty ImagesWASHINGTON—U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded. Mortgage balances rose by $162 billion in the second quarter to $9.406 trillion, surpassing the high of $9.294 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said Tuesday. Mortgages are the largest component of household debt. Mortgage originations, which include refinancings, increased by $130 billion to $474 billion in the second quarter. The figures are nominal, meaning they aren’t adjusted for inflation. “The big picture is that when you look at mortgages, which is the biggest piece of [household debt], it still looks pretty healthy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase, noting that while household debt has grown, so have incomes. The milestone for mortgage debt has been long in the making. Americans’ mortgage debt dropped by about 15% from the 2008 peak to the trough in the second quarter of 2013 and has climbed slowly since then. Total household debt has been on the rise since mid-2013. It rose by 1.4% from the first quarter to $13.86 trillion, the 20th consecutive quarter of increase. Mortgage debtWall Street Journal… Read more »
  • Mortgage Rates Fall Sharply as Trade Concerns Mount—but Many Would-Be Borrowers Are Likely to Miss OutMortgage Rates Fall Sharply as Trade Concerns Mount—but Many Would-Be Borrowers Are Likely to Miss Out
    Justin Sullivan/Getty ImagesMortgage rates dropped significantly over the past week as concerns related to the ongoing trade dispute with China and the overall health of the economy dominated headlines. The 30-year fixed-rate mortgage averaged 3.6% during the week ending Aug. 8, down 15 basis points from the previous week, Freddie Mac reported Thursday. This is the lowest mortgage rates have been since the 2016 presidential election. This was the third-largest weekly decline for the 30-year fixed-rate mortgage this year — so far in 2019, rates for the loan product have only posted a weekly increase on eight occasions. Mortgage rates graphMarketWatch The 15-year fixed-rate mortgage also dropped 15 basis points to an average of 3.05%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.36%, representing a decline of 10 basis points. Mortgage rates track the 10-year Treasury note, the yield on which has fallen sharply over the past year. ‘Some millennials are missing out on a once-in-a-generation opportunity.’ Nela Richardson, an investment strategist at Edward Jones While the Federal Reserve did choose to cut the Fed funds rate last week, that change has already been priced into mortgage rates. This week’s decline likely reflected the growing worries in financial markets,… Read more »
  • Consumer Watchdog Blasts Government’s Loan Sales Program: ‘No Rules’ to Help People Save Their HomesConsumer Watchdog Blasts Government’s Loan Sales Program: ‘No Rules’ to Help People Save Their Homes
    Reicaden/iStockSome Americans were left worse off after their mortgages were sold to private-equity firms by the Department of Housing and Urban Development. That’s according to a report released by the U.S. Government Accountability Office, which this month released a new analysis of HUD’s Distress Asset Stabilization Program. That program has overseen the sale of roughly 111,000 loans insured by the Federal Housing Administration, which were valued at around $19 billion, between 2010 and 2016. ‘The GAO’s report shows that HUD had no rules in place to ensure that the sales would help homeowners, and in fact, the GAO’s data show that homeowners lost out while private equity companies gained.’ Geoff Walsh, a staff attorney with the National Consumer Law Center “The GAO’s report shows that HUD had no rules in place to ensure that the sales would help homeowners, and in fact, the GAO’s data show that homeowners lost out while private equity companies gained,” said Geoff Walsh, a staff attorney with the National Consumer Law Center, in a statement following the report’s release. The loans, which were in default at the time of the various auctions run by HUD, were auctioned off in bulk sales. The buyers of the loans were… Read more »
  • One-Third of Mortgage Borrowers Are Missing This Opportunity to Save $2,000One-Third of Mortgage Borrowers Are Missing This Opportunity to Save $2,000
    ejs9/iStockMore than one in three mortgage borrowers are leaving money on the table. Over a third of 2018 home buyers said they did not shop around before choosing a mortgage lender, according to a study by Fannie Mae.   And repeat home buyers were more likely to take the leap with a lender without comparing competing offers: 41% of these buyers only got one quote versus 34% of first-time buyers. Nearly two-thirds of borrowers who only reviewed one quote before taking out a mortgage said they chose not to compare competing offers either because they were either comfortable with the lender they got the initial quote from or were satisfied with the quote itself. Meanwhile, 10% of these home buyers said it was too much hassle to shop around. The vast majority of home buyers who only got one quote before deciding on a mortgage — 76% — said they did not have regrets. But chances are they’re turning a blind eye to the ramifications of their decision. “Although home buyers who received only one quote didn’t usually express regret, most still reported trying to negotiate mortgage terms with somewhat less success than those who did shop around,” Doug Duncan, Fannie… Read more »
  • Trump Administration Reducing the Size of Loans People Can Get Through FHA Cash-Out RefinancingTrump Administration Reducing the Size of Loans People Can Get Through FHA Cash-Out Refinancing
    Boogich/iStockThe Trump administration is reducing how much home equity mortgage borrowers can withdraw through cash-out refinances. Starting Sept. 1, the Federal Housing Administration will limit the loan amounts for cash-out refinancings to 80% of the home’s value or less. Previously, borrowers could take out up to 85% of the property’s equity. The new loan amount limit is in line with the limits already in place at Fannie Mae and Freddie Mac. Cash-out refinances have grown in popularity in recent years in tandem with ballooning home values across much of the country. Many people have turned to these loans to pay for home improvements, including renovations intended to aid older homeowners as they age in place rather than downsize to a smaller home or move to a retirement community. In 2018, the volume of cash-out refinances grew as mortgage rates rose, making up 63% of all FHA refinance activity through September, up from 39% the previous year, the Wall Street Journal reported. But that uptick in cash-out loans came with a drawback: Added risk. FHA officials said that the growth in cash-out refi activity in recent years has added risk to the government mortgage program. Back in January, foreclosure starts on FHA-backed loans hit a… Read more »
  • Mortgage Rates Steady as Fed Weighs Further CutsMortgage Rates Steady as Fed Weighs Further Cuts
    David Ryder/Bloomberg via Getty ImagesMortgage rates stayed steady, according to data released on Thursday, as the Federal Reserve considers further interest-rate cuts after its first reduction in a decade on Wednesday. Freddie Mac said the 30-year fixed-rate mortgage averaged 3.75% in the week ending Aug. 1, which is unchanged. A year earlier, the 30-year mortgage was 4.6%. The 15-year fixed-rate mortgage rose to 3.20% from 3.18%, and the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.46%, down from 3.47%. The Fed on Wednesday made the first rate reduction in a decade but because the move was well anticipated, the rate markets didn’t move that much. Fed Chairman Jerome Powell said at a press conference that the central bank would consider making another cut, but that there would not be a lengthy rate-cut cycle. Powell said: “I said it’s not the beginning of a long series of rate cuts. I didn’t say it’s just one or anything like that.” Mortgage rates tend to track the benchmark 10-year Treasury. The post Mortgage Rates Steady as Fed Weighs Further Cuts appeared first on Real Estate News & Insights | realtor.com®. Read more »
  • Mortgage Rates Were Falling Before Fed Signaled Rate CutMortgage Rates Were Falling Before Fed Signaled Rate Cut
    Joe Raedle/Getty ImagesWASHINGTON—The Federal Reserve is prepared to cut interest rates this week for the first time since 2008, but the biggest source of debt for U.S. consumers—mortgages—has been getting cheaper since late last year. Mortgage rates have fallen recently to the lowest levels since late 2016, tracking a broader slide in U.S. Treasury yields. The average rate on a 30-year, fixed-rate mortgage was 3.75% last week, down from 4.94% in November, according to Freddie Mac. “The most significant impact of an expected Fed rate cut is already upon us,” said Greg McBride, chief financial analyst at Bankrate.com, referring to the drop in mortgage rates. The decline contrasts with trends in other consumer rates since the Fed last tweaked monetary policy in December by raising its benchmark federal-funds rate by a quarter-percentage point to a range between 2.25% and 2.5%. The cost of auto loans, which rose only modestly as the Fed tightened policy from 2015 through last year, has fallen less than mortgage rates since December. The average rate on a five-year, new-car loan was 4.72% last week, down from 4.93% in mid-December. Consumer rates that tend to more closely hew to Fed policy decisions rose in the weeks after its December rate increase, and… Read more »
  • Pending Home Sales Rise in June, Helped by Western GainsPending Home Sales Rise in June, Helped by Western Gains
    Scott Olson/Getty ImagesPending home sales rose in June, with activity particularly brisk in the western part of the U.S., a trade group said Tuesday. The National Association of Realtors® said pending home sales climbed 2.8%, with gains in each of the four major regions, including a 5.4% jump in the West. Compared to 12 months ago, sales rose 1.6%, the first year-over-year gain in 17 months. The NAR attributed the gain to strong job growth, a near-record stock market, rising home values and low mortgage rates. The Case-Shiller home-price report also released Tuesday showed moderating gains in prices in key Western cities, and in Seattle’s case, an outright year-over-year decline. A sale is listed as pending when the contract has been signed but the transaction has not closed. The pending-home-sales index typically represents about 20% of the transactions for existing home sales. The post Pending Home Sales Rise in June, Helped by Western Gains appeared first on Real Estate News & Insights | realtor.com®. Read more »
  • Why It Could Get More Difficult for Americans to Get Approved for a MortgageWhy It Could Get More Difficult for Americans to Get Approved for a Mortgage
    Justin Sullivan/Getty ImagesThe Consumer Financial Protection Bureau is set to eliminate a regulatory loophole that made getting a mortgage more feasible for thousands of Americans. The consumer watchdog agency announced this month that it will allow a temporary provision commonly known as the “qualified mortgage patch” to expire in January 2021 as originally planned or shortly thereafter. The CFPB has also started fielding comments from the public as to what should replace the patch. This regulatory loophole or ‘patch’ allowed Fannie Mae and Freddie Mac to purchase loans where the borrower’s debt-to-income ratio exceeded the standard of 43%. The provision at hand exempted Fannie Mae and Freddie Mac  from certain requirements of the CFPB’s “Ability to Repay/Qualified Mortgage Rule,” which set the standards for the design and underwriting of loans purchased by the government-sponsored enterprises. This also ensured that borrowers could afford the loans they were receiving. In particular, this regulatory loophole or “patch” allowed Fannie Mae and Freddie Mac to purchase loans where the borrower’s debt-to-income ratio exceeded the standard of 43% set by the Ability to Repay/Qualified Mortgage Rule. In cases where the debt-to-income ratio went above the 43% limit, a loan could still obtain “QM status” if… Read more »
  • U.S. New Home Sales Picked Up in JuneU.S. New Home Sales Picked Up in June
    Patrick T. Fallon/Bloomberg via Getty ImagesWASHINGTON—Home-buyers bought more new homes in June, a bright spot in the beleaguered housing sector. Purchases of newly built single-family homes increased 7% from the prior month to a seasonally adjusted annual rate of 646,000 in June, the Commerce Department said Wednesday. The increase follows two straight months of declines. Economists surveyed by The Wall Street Journal has expected a sales pace of 659,000. The number of homes for sale in June would last 6.3 months at the current pace. That’s up from 6 months a year earlier. The median sales price of a new home in June was $310,400, roughly the same as a year ago, when the median sales price was $310,500. From a year ago, new home sales were up 4.5%. Sales data can be volatile and subject to revisions. The June increase came with a margin of error of plus or minus 15.2 percentage points. Sales in May were revised down to a seasonally adjusted annual rate of 604,000 from an initial estimate of 626,000. New-home sales are a relatively narrow slice of all U.S. home sales. About 90% of homes purchased were previously owned. Existing-home sales are moving in the opposite direction.… Read more »
  • U.S. Home Sales Stumble, as Pricey West Coast Markets Suffer DeclinesU.S. Home Sales Stumble, as Pricey West Coast Markets Suffer Declines
    Chona Kasinger/Bloomberg via Getty ImagesU.S. home sales slumped in June as home prices for major West Coast cities declined for the first time since 2012, ending the spring selling season with a thud. Real-estate agents said lower asking prices could eventually attract more buyers, but home values in the Bay Area, Los Angeles and Seattle have roughly doubled over the past seven years. That means prices may have to retreat further before buyers do more than look, economists said. “Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down,” said Ken DeLeon, founder of DeLeon Realty in Palo Alto, Calif. “There’s just this malaise buyers had of, ‘I feel like it’s gonna drop further.’” Existing-home sales fell 1.7% to a seasonally adjusted annual pace of 5.27 million, the National Association of Realtors said Tuesday. Sales declined 2.2% compared with a year earlier, marking the 16th consecutive month of annual declines in sales. The spring selling season is crucial because about 40% of the year’s sales take place in March through June. Falling sales during most of this period have puzzled economists. They struggle to explain why the housing market has remained… Read more »
  • Mortgage Rates Tick Higher as Difficult Questions Face VeteransMortgage Rates Tick Higher as Difficult Questions Face Veterans
    CoryUlrich/iStockRates for home loans edged up as financial markets stabilized on hope about global trade, but held near long-time lows. The 30-year fixed-rate mortgage averaged 3.75% in the holiday-shortened July 3 week, Freddie Mac said Wednesday. That was up two basis points. Halfway through the year, the benchmark product has only managed eight weekly increases. The 15-year fixed-rate mortgage averaged 3.18%, also up two basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.45%, up from 3.39%. Fixed-rate mortgages track the 10-year U.S. Treasury note, which rose slightly after a weekend detente between President Trump and Chinese president Xi Jinping. In late June, President Trump signed legislation that will increase the fees paid by borrowers taking out mortgages backed by the Veterans Administration. The Blue Water Navy Vietnam Veterans Act aims to extend medical benefits to veterans who served in the Navy off the coast of Vietnam and say they were exposed to Agent Orange. Last year, the VA estimated the bill would cost $3.4 billion over the next five years. Higher fees on home loans will help defray that. As MarketWatch explained last year, the notion of paying for benefits for an older generation of vets by increasing the cost of homeownership for… Read more »
  • Apartment Demand Hits Five-Year HighApartment Demand Hits Five-Year High
    RoschetzkyIstockPhoto/iStockDemand for rental apartments reached a five-year high this spring, spurred by new household formation and lagging home sales. The number of new apartment move-ins in the second quarter of 2019 increased 11% over the same period last year, according to a national report scheduled to be released Monday by real-estate analytics firm RealPage. The demand surge drove the national occupancy rate to 95.8%, compared with 95.4% at the end of the second quarter of 2018, the report said. RealPage’s chief economist Greg Willett attributed the increase in the second quarter partly to economic uncertainty that slowed the market in the first quarter. “This is catch-up,” he said. Demand grew particularly in Chicago and Houston. Move-ins in those markets outpaced apartment construction by nearly 3 to 1, RealPage data showed. Monthly rental prices nationwide shot up 3% from the second quarter of 2018 to the same period this year. Many small metros saw bigger increases. Rents rose 7.4% in Wilmington, N.C., and 6.4% in Huntsville, Ala., according to the report. Although apartment construction is near the highest it has been in 30 years, much of that new supply is targeting higher-income earners, Mr. Willett said. With little new affordable supply, the market… Read more »
  • Pending Home Sales Roar Higher, but Are Stuck Below Year-Ago LevelsPending Home Sales Roar Higher, but Are Stuck Below Year-Ago Levels
    EvgeniyShkolenko/iStockThe numbers: Pending home sales jumped by a seasonally adjusted 1.1% in May but were 0.7% lower than a year ago, the National Association of Realtors said Thursday. The May increase beat the consensus forecast for a 0.6% rise. What happened: NAR’s index, which tracks home-contract signings, has seesawed up and down every month this year, but through the noise, it’s clear that the housing market is shuffling. May marked the 17th straight month of annual declines. Contract signings precede closings by about 45-60 days, so the index is a leading indicator for upcoming existing-home sales reports. In May, pending sales in the Northeast were 3.5% higher, and in the Midwest, they were 3.6% higher. In the West, they dropped 1.8%. In the South, they edged up 0.1%, but were slightly higher than year-ago levels, the only region in which that was the case in May. Big picture: Housing peaked for this cycle in late 2017. Combined sales of newly-built and previously-owned homes have stagnated since then, with occasional small bright spots. It’s possible that housing activity could perk up from here, but if the rest of the economy is slowing sharply, that’s not likely. What they’re saying: The Realtors cited “extremely attractive conditions for… Read more »
  • Mortgage Rates Slump to a 2 1/2-Year LowMortgage Rates Slump to a 2 1/2-Year Low
    Chloe Harris/iStockRates for home loans tumbled, sending the benchmark to its lowest since late 2016. The 30-year fixed-rate mortgage averaged 3.73% in the June 27 week, down 11 basis points, Freddie Mac said Thursday. The 15-year fixed-rate mortgage averaged 3.16%, down from 3.25%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.39%, down nine basis points. Fixed-rate mortgages track the 10-year U.S. Treasury note, which has recently hovered near two-year lows. Investors turn to safer assets in unsettled times, and nerves have been frayed by the geopolitical maneuverings between the U.S. and China, the U.S. and Iran, the U.S. and Mexico, and more. Bonds also become more attractive when economic growth stagnates or declines, and recent weeks have brought plenty of signals that a downturn may be closer at hand than expected. But mortgage rates don’t simply mimic bond yields. They’re also a reflection of how investors view the housing market. Some recent reports suggest that the stepped-up discussion around the future of Fannie Mae and Freddie Mac may be denting investor enthusiasm for mortgage bonds. That may mean there’s only so much farther for mortgage rates to fall. Fannie and Freddie don’t make loans directly, but buy them from lenders. That allows banks and… Read more »
  • Trump Administration to Take on Local Housing BarriersTrump Administration to Take on Local Housing Barriers
    Andrew Harrer/Bloomberg via Getty ImagesThe Trump administration will explore using federal programs to push local governments to soften or eliminate rules that block housing construction, an issue that has stymied officials at all levels of government for years. President Trump is expected to sign an order Tuesday creating the White House Council on Eliminating Barriers to Affordable Housing Development, which will include members of eight federal agencies. “These are things that can be solved. A lot of [these rules] have been on the books for excessive amounts of time. They’re not particularly relevant any more,” said Ben Carson, secretary of the U.S. Department of Housing and Urban Development, in an interview Tuesday with The Wall Street Journal. Home construction per household is near the lowest level in 60 years of record-keeping, creating a shortage of everything from starter homes for young households to rental apartments for retirees on fixed incomes. A study released Tuesday by Harvard University’s Joint Center for Housing Studies found that the U.S. built about 260,000 fewer homes than it needed in 2018 to keep up with population growth and an aging housing stock. As a result, homes are getting more expensive relative to incomes. The ratio of the… Read more »
  • U.S. New Home Sales Fell for Second Straight Month in MayU.S. New Home Sales Fell for Second Straight Month in May
    Paul J. Richards/AFP/Getty Images)WASHINGTON—Americans purchased fewer new homes in May, a sign the housing sector remains on uneven footing. Purchases of newly built single-family homes decreased 7.8% to a seasonally adjusted annual rate of 626,000 in May, the Commerce Department said Tuesday. It was the slowest pace of sales since December. Economists surveyed by The Wall Street Journal had expected a sales pace of 683,000 homes in May. The number of homes for sale in May would last 6.4 months at the recent pace. That is up from 5.6 months a year earlier. The median sales price of a new home in May was $308,000, down from $316,700 a year earlier. But lower prices and more supply didn’t stoke better demand last month. Sales data can be volatile and subject to revisions. The May decrease came with a margin of error of plus or minus 14.7 percentage points. Sales in April were revised up modestly to a 679,000 pace, while March sales were revised down to 705,000. New-home sales are a relatively narrow slice of all U.S. home sales—about 90% of homes purchased in the U.S. were previously owned. Sales of previously owned homes rose in May, increasing 2.5% to a seasonally adjusted… Read more »
  • Investors Are Buying More of the U.S. Housing Market Than Ever BeforeInvestors Are Buying More of the U.S. Housing Market Than Ever Before
    Justin Sullivan/Getty ImagesThe share of investor purchases of U.S. homes have climbed to an all-time high, a sign that rising home prices have done little to dampen demand for flipping homes or turning them into single-family rentals. Big private-equity firms, real-estate speculators and others that buy properties comprised more than 11% of U.S. home purchasers in 2018, according to data released on Thursday by CoreLogic Inc. The investor purchases are the highest on record and nearly twice the levels before the 2008 housing crash. The investor interest poses a challenge for millennials and other first-time buyers who are increasingly looking to buy starter homes and are forced to compete with deep-pocketed cash buyers. Big commercial property owners like Blackstone Group LP and Starwood Capital Group began buying thousands of homes out of foreclosure during the housing bust. Many economists credit investors with helping to stabilize the housing market in 2011 and 2012 by buying with cash when prices were low and mortgage credit froze. But analysts expected those purchases to slow, as the market rebounded and properties could no longer be had for fire-sale prices. Instead, demand for properties has intensified. While these purchases dipped slightly when the market started to recover… Read more »
  • U.S. Existing-Home Sales Rose in MayU.S. Existing-Home Sales Rose in May
    Joe Raedle/Getty ImagesWASHINGTON—Sales of previously owned homes rose in May, a sign that falling mortgage rates could be nudging the housing market toward a modest spring performance after a sluggish start to this prime selling season. Sales rose 2.5% in May from the prior month to a seasonally adjusted annual rate of 5.34 million, the National Association of Realtors said Friday. The spring is crucial to the housing market because roughly 40% of the year’s sales take place in March through June. May was the first month this spring when sales rose from the prior month, but compared with a year earlier sales in May still declined 1.1% The housing market struggled late last year even as the rest of the economy boomed, in part because higher mortgage rates priced some buyers out of the market. Now, analysts said the housing market may be benefiting from growing economic uncertainty. “We are really seeing some headwinds in the broader economy right now, with the trade war and in the technology sector and also in manufacturing and agriculture,” said Tian Liu, chief economist at Genworth Mortgage Insurance. “The housing market is actually less exposed to those headwinds right now.” Mortgage rates are now below… Read more »
  • Mortgage Rates Are Moving Sideways. Will They Fall From Here?Mortgage Rates Are Moving Sideways. Will They Fall From Here?
    bauhaus1000/iStockRates for home loans were mixed, but stayed near recent lows, even as bond market moves suggest another big step down lies ahead. The 30-year fixed-rate mortgage averaged 3.84% in the June 20 week, up two basis points, Freddie Mac said Thursday. Halfway through 2019, this is only the seventh week in which the popular product has increased. The 15-year fixed-rate mortgage averaged 3.25%, down from 3.26%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.48%, down three basis points. In the most recent week, according to data from the Mortgage Bankers Association, ARMs made up only 6.1% of all mortgage applications. The steady swoon in mortgage rates is tracking a similar phenomenon in the 10-year U.S. Treasury note, which also touched a 2-year low in the past week. Mortgage rate moves often lag the broader bond market, so another step down for home loan rates may lie ahead. Meanwhile, the housing market can’t seem to get out of its own way. In the nine years since sales bottomed and began to recover, one thing after another has derailed the market from consistent, strong growth. In 2013, the then-chair of the Federal Reserve, Ben Bernanke, reminded Congress that at some point the central bank… Read more »
  • U.S. Housing Starts Declined in MayU.S. Housing Starts Declined in May
    Scott Olson/Getty ImagesWASHINGTON—A gauge of U.S. home building declined in May, a fresh sign of weakness in the housing market. Housing starts fell 0.9% in May from the prior month to a seasonally adjusted annual rate of 1.269 million, the Commerce Department said Tuesday. That was a steeper decline than the 0.4% decrease economists had expected. The report follows a drop in U.S. home-builder confidence in June, as builders reported concerns over rising construction costs and trade issues. The National Association of Home Builders housing market index fell to 64 this month from 66 in May, the trade group said Monday. Tuesday’s housing data, “along with a constellation of other economic factors, could weigh on the Federal Reserve’s scales regarding whether or not they will cut rates, which would potentially provide some stimulus for the economy and the housing market,” said John Pataky, executive vice president at TIAA Bank. Fed officials meet Tuesday and Wednesday in Washington, and are expected to deliberate whether to lower interest rates should the economic outlook darken. There were some bright spots in the Commerce Department’s latest release. Residential building permits, which can signal how much construction is in the pipeline, rose 0.3% from April to an annual pace of… Read more »
  • Mortgage Rates Hold at Two-Year Lows, Giving Borrowers Another Shot at the ActionMortgage Rates Hold at Two-Year Lows, Giving Borrowers Another Shot at the Action
    David McNew/Getty ImagesRates for home loans mostly held steady, and even declined slightly, as investor jitters about a slowing economy and geopolitics continued to keep bonds attractive. The 30-year fixed-rate mortgage averaged 3.82% in the June 13 week, unchanged during the week, Freddie Mac said Thursday. Nearly halfway through the year, the popular product has managed a weekly increase only six times. It now stands at about a two-year low. The 15-year fixed-rate mortgage averaged 3.26%, down from 3.28%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.51%, down 1 basis point. Fixed-rate mortgages follow the path of the 10-year U.S. Treasury note, which has tumbled as investors grow increasingly concerned about the health of the economy and the potential effects of a long trade war. Meanwhile, inflation has remained tame. Markets and some analysts now predict that the Federal Reserve will cut interest rates this year. Lower rates are touching the housing market in unexpected ways. Demand for home loans has been so robust that mortgage lender profit margins turned positive for the first time in nearly three years. That’s according to Fannie Mae’s Mortgage Lender Sentiment Survey for the second quarter, released Wednesday. That survey also found that for the first time in more than… Read more »
  • Fix Mortgage Finance, Or We’ll Do It For You, Regulator Tells CongressFix Mortgage Finance, Or We’ll Do It For You, Regulator Tells Congress
    T.J. Kirkpatrick for The Wall Street JournalWASHINGTON—Mark Calabria has a message for Congress: Help the Trump administration overhaul mortgage-finance companies Fannie Mae and Freddie Mac, or he will do what he can on his own. The two companies, critical to half the nation’s mortgages, have been under government control since the 2008 financial crisis. For over a decade, policy makers have tried and failed to return them to the private sector and scale back the government’s role in housing. “If I do nothing and don’t push, then I’m fairly certain Congress will do nothing,” said Mr. Calabria, the Trump-appointed head of the Federal Housing Finance Agency, which oversees Fannie and Freddie. “They have a lot of priorities, so how do I knock this up a few levels in the priority chain for Congress?” Mr. Calabria is expected to send ideas to Congress as early as this week, people familiar with the matter said. He acknowledged that mortgages could become more expensive if the Trump administration returns Fannie and Freddie to private hands without a broader legislative solution—a reason Congress ought to act, he said. “If all of these things are the likely outcome, then that should focus Congress to come in and decide what… Read more »
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