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Most recent market newsWednesday, November 8
Mortgage Bankers Association (MBA): Mortgage applications flat in latest MBA Weekly Survey
The Market Composite Index remained unchanged on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.18 percent from 4.22 percent, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.12 percent from 4.16 percent, with points decreasing to 0.24 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.05 percent from 4.07 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
MBA’s Weekly Applications Survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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Tuesday, November 7
The Fannie Mae Home Purchase Sentiment Index (HPSI)
HPSI decreased 3.1 points in October to 85.2, falling from the all-time high matched last month. The decline can be attributed to decreases in four of the six HPSI components. The net share of respondents who said now is a good time to sell a home decreased 8 percentage points compared to September but remains up 11 percentage points compared to the same period last year. Additionally, the net share who reported that now is a good time to buy a home fell 6 percentage points in October. Americans also expressed a decreased sense of job security, with the net share who say they are not concerned about losing their job decreasing 5 percentage points. The net share of consumers who reported that their income is significantly higher than it was 12 months ago fell by 1 percentage point, while the net share of those who believe mortgage rates will go down increased 1 percentage point. The net share who said home prices will go up in the next 12 months remained flat in October.
“The modest decrease in October’s Home Purchase Sentiment Index is driven in large part by decreases in favorable views of the current home-buying and home-selling climates, a shift we expect at this time of year moving out of the summer home-buying season,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Indicators of broader economic and personal financial sentiment remain relatively steady. Overall, these results are consistent with our view that the housing market will continue its slow, upward grind through 2018.”
Nationally, it requires 21.4 percent of the median income to purchase the median-priced home as of September 2017 compared to 24.2 percent from 1995-1999 and 26.2 percent from 2000-2003. Interest rates have pulled back by 40 bps over the past six months, but most of that potential savings continues to be offset by accelerating rates of home price appreciation across most of the country. Despite home prices accelerating and affordability remaining near post-recession lows, housing remains much more affordable than longer-term benchmarks (1995-2003)“Rising home prices continue to offset the majority of would-be savings from recent interest rate declines, which has kept home affordability near a post-recession low,” said Ben Graboske, Executive Vice President – Data & Analytics, Black Knight. “That being said, when viewing the market through a longer-term lens, affordability across most of the country still remains favorable to long-term benchmarks.”
Black Knight’s most recent First Look release
Mortgage Bankers Association (MBA) Mortgage Credit Availability Index
The MCAI decreased 0.2 percent to 181.0 in October. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. Of the four component indices, the Jumbo MCAI saw the greatest decrease in availability over the month (down 2.0 percent), followed by the Conventional MCAI (down 1.0 percent). The Government MCAI (up 0.3 percent) and Conforming MCAI (up 0.2 percent) both increased from last month.
“Credit availability decreased only slightly in October and has been relatively flat for the year to date,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “While government and conforming credit programs saw slight increases in availability in October, a moderate decrease in the number of investor jumbo offerings resulted in a decrease in the total index.”
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