13
Oct
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Market Outlook

What’s Ahead For Mortgage Rates This Week – October 13, 2015

Whats Ahead For Mortgage Rates This Week October 13 2015Last week’s economic reports included the Federal Open Market Committee Meeting Minutes and Weekly Jobless Claims. Also, the new mortgage TRID rules went into effect. Here are the details:

TRID (TILA-RESPA Integrated Disclosure) Goes Into Effect

TRID, or TILA-RESPA Integrated Disclosure, which is also known as the “Know Before You Owe” rule will change the mortgage process by altering some standard loan forms and practices. Originally slated to go into effect August 1, the Consumer Financial Protection Bureau (CFPB) actually took effect on October 3.

On Wednesday, October 7, 2015, the House of Representatives approved HR 3192, “The Homebuyers Assistance Act”, which would provide a safe harbor for lenders who act in good faith to comply with the new TRID mortgage disclosure requirements. The bill will still need to be passed by the US Senate and signed by the President in order to become law.

Home buyers can expect to be using two new forms under TRID — the Loan Estimate and the Closing Disclosure. These two new loan forms are easier to understand and consolidate the earlier standard forms. The forms are also designed to work in combination with each other, which wasn’t happening with the previous forms.

The new forms clearly detail the loan amount, its terms, whether the amount can increase after closing for each section, and the feature of the loan, such as whether there is an early payment penalty or not.

The forms are designed to provide the buyer with more time to review the costs associated with the mortgage. The Loan Estimate document is due to the buyer three days after applying for the loan, while the Closing Disclosure must be presented three days before closing.

The CFPB has offered a special guide for real estate professionals.

Real Estate Professionals Guide (http://www.consumerfinance.gov/know-before-you-owe/real-estate-professionals/)

Mortgage Rates Tick Downward

Freddie Mac reported that the average mortgage rate for a 30-year fixed rate mortgage dropped lower to 3.76 percent from 3.85 percent the previous week; the average rate for a 15-year fixed rate mortgage was also lower at 2.99 percent. The average rate for a 5/1 adjustable rate mortgage was unchanged at an average rate of 2.88 percent. Average discount points for both fixed rate products was.6 percent while the discount points for the adjustable product was.2 percent.

Jobless Claims Fall To 42-Year Low

New unemployment claims dropped to 263,000 against expectations of 271,000 new jobless claims and the prior week’s reading of 277,000 new jobless claims. Some experts argued that the drop may have had to due with seasonal employment trends. The U.S. labor-force participation rate was reported at a 38-year low at 62.4 percent in September.

21
Sep
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Market Outlook

What’s Ahead For Mortgage Rates This Week – September 21, 2015

Whats Ahead For Mortgage Rates This Week September 21 2015Last week’s economic releases included several reports related to housing. The Wells Fargo/ NAHB Housing Market Index achieved its highest reading in nearly 10 years. Housing Starts dipped in August and Building Permits issued in August exceeded July expectations. The week’s big news was actually no news. The Fed’s Federal Open Market Committee decided not to raise interest rates. Fed Chair Janet Yellen followed up on the FOMC statement with a press conference and said that the Fed is not yet ready to raise rates, but that a majority of FOMC members are prepared to raise rates before year-end.

Inflation Rate Remains Well Below Fed Benchmark

The Federal Reserve has set a goal of reaching an inflation rate of 2.00 percent as one of several considerations for raising the target federal funds rate that currently stands at 0.00 percent to 0.250 percent. The Consumer Price Index for August fell from July’s reading of 0.10 percent to -0.10 percent in August. Lower prices were driven by lower fuel costs. The dip in consumer costs was the first since January.

The Core Consumer Price Index, which excludes volatile food and energy sectors, was unchanged at 0.10 percent in August, which matches analyst expectations and July’s reading.

NAHB: Home Builder Confidence Hits Highest Level in Nearly 10 Years

The Wells Fargo/NAHB Housing Market Index reached its highest reading since November 2005 with a one-point increase to a reading of 62 in September. Readings over 50 indicate that a majority of builders are confident about housing market conditions. September’s reading was the highest since November 2005, when the NAHB Housing Market Index achieved a reading of 68.

Housing Starts Lower, But Building Permits Rise

The Commerce Department reported that August housing starts fell to a seasonally-adjusted annual reading of 1.13 million starts against projections of 1.16 million starts and 1.16 million housing starts in July. Residential building permits were higher in August with a reading of 1.17 permits issued for residential construction and 1/13 million permits issued in July.

Mortgage Rates Rise

Freddie Mac reported that mortgage rates rose across the board last week. The rate for a 30-year fixed rate mortgage rose by one basis point to 3.91 percent. The average rate for a 15-year mortgage also rose by one basis point to 3.11 percent and the average rate for a 5/1 adjustable rate mortgage also rose by one basis point to 2.92 percent. Discount points averaged 0.60 got 30-year fixed rate mortgages, 0.70 percent for 15-year mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.

What’s Ahead 

Next week’s scheduled economic news includes reports on new and existing home sales, FHFA’s House Price Index, along with regularly scheduled weekly reports on new jobless claims and mortgage rates.

04
May
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – May 4, 2015

Whats Ahead For Mortgage Rates This Week May 4 2015Last week’s economic news included S&P Case-Shiller Home Price Index reports, the Fed’s FOMC meeting statement and pending home sales. Freddie Mac mortgage rates and weekly jobless claims were also released as usual. The details:

Case-Shiller: Denver Leads Home Price Gains in February

The S&P Case-Shiller 20-City Home Price Index showed that home prices continue to appreciate, but at a slower rate than in previous years. Home prices increased at a seasonally-adjusted year-over-year rate of 4.20 percent in February as compared to the February 2014 reading of 4.40 percent.

Denver, Colorado led February’s year-over-year home price appreciation rates with a reading of 10.00 percent. San Francisco, California followed closely with a year-over-year reading of 9.80 percent and Miami Florida reported year-over-year home price gains at 9.20 percent.

FOMC Statement: Fed Expects Moderate Economic Growth

In its customary post-meeting statement the Federal Open Market Committee (FOMC) the Fed repeated its projections for moderate economic growth, but again kept its options open for raising the target federal funds rate, which currently ranges between 0.00 and 0.250 percent. The Fed noted that inflation remains below its goal of 2.00 percent, largely due to earlier decreases in fuel prices. FOMC indicated it will be monitoring inflation data closely.

FOMC members agreed not to raise the target federal funds rate, but said that FOMC will closely monitor data on its dual mandate to achieve maximum employment and an inflation rate of 2.00 percent. Labor market conditions, readings on expected and actual inflation rates and domestic and international economic developments will be considered before the FOMC raises the target federal funds rate. When the Fed does raise rates, mortgage rates can also be expected to rise.

Mortgage Rates Rise, Jobless Claims Fall to 15 Year Low

Average mortgage rates rose last week according to Freddie Mac. The average rate for a 30-year fixed rate mortgage rose by three basis points to 3.68 percent; the average rate for a 15-year fixed rate mortgage rose by two basis points to 2.94 percent. The average rate for a 5/1 adjustable rate mortgage increased by one basis point to 2.85 percent. Discount points for fixed rate mortgages were unchanged at 0.60 percent and rose from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages.

Weekly first-time jobless claims were lower than expected with a reading of 262,000 claims filed against expectations of 287,000 new claims filed and the prior week’s reading of 296,000 claims filed. This was the lowest reading for new jobless claims in 15 years. The four-week rolling average of new jobless claims fell by 1250 claims to a reading of 283,750 new claims filed. Analysts typically rely on the four-week rolling average reading as it softens the effects of volatility that can occur from week to week.

What’s Ahead

Next week’s scheduled economic reports are dominated by employment related data including the National Unemployment Rate, Non-Farm Payrolls and the ADP Employment report. Weekly jobless claims and Freddie Mac’s Primary Mortgage Market Survey will be released as usual on Thursday.