Freddie Mac Weekly Update: Fixed Mortgage Rates Continue Downward Slide

30-year fixed-rate mortgage:averaged 4.55 percent with an average 0.6 point for the week ending June 2, 2011, down  from last week when it averaged 4.60 percent. Last year at this time, the 30-year FRM averaged 4.79 percent.  

The 15-year fixed-rate mortgage: this week averaged 3.74 percent with an average 0.7 point, down from last week when it averaged 3.78 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.  

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.41 percent this week, with an average 0.6 point, the same from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.94 percent .

One-year Treasury-indexed ARMs: averaged 3.13 percent this week with an average 0.6 point, up from last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 3.95 percent.  

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing. First quarter growth in consumer spending was revised downward by half of a percentage point to 2.2 percent, according to theBureau of Economic Activity,  consumer confidence  in May was weaker than the market consensus forecast, and the  manufacturing industry slowed for the third straight month in May

The housing market is showing strain as well. The S&P/Case-Shiller National Home Price Index  fell 5.1 percent between the first quarters of 2010 and 2011, representing the largest annual decline since the third quarter of 2009. In addition, the  index of pending existing home sales dropped 11.6 percent from March to April, led by the Midwest and South regions where the tornados and flooding occurred


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Freddie Mac Weekly Update: Fixed-Rate Mortgages Hit a New Year To Date Low

30-year fixed-rate mortgage:averaged 4.61 percent with an average 0.7 point for the week ending May 19, 2011, down  from last week when it averaged 4.63 percent. Last year at this time, the 30-year FRM averaged 4.84 percent 
The 15-year fixed-rate mortgage: this week  averaged 3.80 percent with an average 0.7 point, down  from last week when it averaged 3.82 percent.  A year ago at this time, the 15-year FRM averaged 4.24 percent.  

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.48 percent this week, with an average 0.6 point ,  up from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.91 percent .

One-year Treasury-indexed ARMs: averaged 3.15 percent this week with an average 0.6 point, upfrom last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 4.00 percent.  

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates inched down for the fifth consecutive week as financial markets try to ascertain the current strength of the economy.  Industrial production  was unchanged in April owing to disruptions in automobile parts supplies due to the earthquake and tsunami in Japan. Netting out automobiles and gasoline,  retail sales  rose 0.2 percent in April, which was less than a third of the increase in March and the weakest growth since December 2010. However,consumer confidence, as measured by the University of Michigan, rose above the market consensus in May to the highest reading since February 
Data on the housing market was also mixed.  New construction  on single-family homes fell 5.1 percent in April, with the largest declines occurring in the Midwest and South regions where tornados hit the hardest. Homebuilder confidence remained unchanged in May and near its January 2009 historical low, according to the  NAHB/Wells Fargo Housing Market Index. However,conventional mortgages applications rose for the past five straight weeks ending May 13th, buoyed by lower mortgage rates and stronger refinancing activity

Freddie Mac Weekly Update: Fixed-Rate Mortgages Hit a New Year To Date Low

30-year fixed-rate mortgage:averaged 4.61 percent with an average 0.7 point for the week ending May 19, 2011, down  from last week when it averaged 4.63 percent. Last year at this time, the 30-year FRM averaged 4.84 percent 
The 15-year fixed-rate mortgage: this week  averaged 3.80 percent with an average 0.7 point, down  from last week when it averaged 3.82 percent.  A year ago at this time, the 15-year FRM averaged 4.24 percent.  

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.48 percent this week, with an average 0.6 point ,  up from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.91 percent .

One-year Treasury-indexed ARMs: averaged 3.15 percent this week with an average 0.6 point, upfrom last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 4.00 percent.  

Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Fixed mortgage rates inched down for the fifth consecutive week as financial markets try to ascertain the current strength of the economy.  Industrial production  was unchanged in April owing to disruptions in automobile parts supplies due to the earthquake and tsunami in Japan. Netting out automobiles and gasoline,  retail sales  rose 0.2 percent in April, which was less than a third of the increase in March and the weakest growth since December 2010. However,consumer confidence, as measured by the University of Michigan, rose above the market consensus in May to the highest reading since February 
Data on the housing market was also mixed.  New construction  on single-family homes fell 5.1 percent in April, with the largest declines occurring in the Midwest and South regions where tornados hit the hardest. Homebuilder confidence remained unchanged in May and near its January 2009 historical low, according to the  NAHB/Wells Fargo Housing Market Index. However,conventional mortgages applications rose for the past five straight weeks ending May 13th, buoyed by lower mortgage rates and stronger refinancing activity

Mortgage Bankers Weekly Survey: Mortgage Refinance Applications Increase

Mortgage Bankers Association for the week of 5/18/2010

Fixed rate mortgages continue to decline this week, with the 30-year loan averaging 4.61% its lowest average this year. The MBAA reports their  Market Composite Index: (loan application volume) increased 7.8 percent. 

Their Refinance Index:  increased 13.2 percent from the previous week and is at its highest level since the week ending December 10, 2010. Rates continue to decline and people are taking advantage of low rates.
However, this isnt helping sell homes.  Mortgage applications increased 7.8 percent from one week earlier, according to data from the Mortgage Bankers Associations Weekly Mortgage The MBAA reports their  Purchase Index:  increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago. However Refinance Index did increase by 3% to 66.7%
Although low rates are not translating into many home sales, I do think these refis are helping people fix their personal balance sheets and hopefully, this is keeping some people out of the foreclosure cycle

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Freddie Mac Weekly Update: 30-year Fixed-Rate Mortgage Matches Yearly Low of 4.71%

30-year fixed-rate mortgage:
averaged 4.78 percent with an averaged 4.71 percent with an average 0.7 point for the week ending May 5, 2011, down from last week when it averaged 4.78 percent. Last year at this time, the 30-year FRM averaged 5.00 percent. .

The 15-year fixed-rate mortgage: this week averaged 3.89 percent with an average 0.7 point, down from last week when it averaged 3.97 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.51 percent. A year ago, the 5-year ARM averaged 3.97 percent .

One-year Treasury-indexed ARMs: averaged 3.14 percent this week with an average 0.5 point, down from last week when it averaged 3.15 percent. At this time last year, the 1-year ARM averaged 4.07 percent.

Freddie Sayz
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week. For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April.

Data reports on the housing market, on the other hand, were a little more uplifting. The National Association of Realtors reported pending home sales rose in March for the second month in a row to the highest index reading since November 2010. Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening

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Mortgage Bankers Association for the week of 5/04/2010

Market Composite Index: (loan application volume) decreased 5.6 percent from one week earlier

Refinance Index: increased 6.0 percent from the previous week

Purchase Index: increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity: increased to 62.7 percent of total applications from 61.6 percent the previous week.

MBA outlook:

The MBAA expects rate to rise this year, largely due to the Fed announcement that they will begin to back away from their mortgage buyback program, allowing the markets to begin to price the cost of loans. This is a hit to affordability and will likely impact sales a bit.


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Case Shiller: Thoughts From Around The Web

Optimists

AP

A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.

If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market," said Celia Chen, senior director at Moody's Analytics. "Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.

NAR

According to the latest Realtors Confidence Index, the gap between the indices of Prospective Home Buyer Traffic and Prospective Home Seller Traffic has narrowed, with an increase in Prospective Buyer Traffic. A continuation of the narrowing of the gap between buyer and seller interest would be favorable to the strengthening of real estate markets nationwide.

In many cases, and in recent years, market prices have already declined substantially. The size of the shadow inventory, mortgages, 30 days overdue or in forecolsure, suggests that problems may not be resolved for two or three years. However, the shadow inventory is declining in size and we may be near the end of continued price declines in many markets.

Pessimists

Standard and Poors

“There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing. says David M. Blitzer, Chairman of the Index Committee at S&P Indices. Ten of the 11 MSAs that recorded index lows in  January fell further in February.

Wall Street Journal

The enormous supply overhang of existing homes (particularly factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time,” said Joshua Shapiro, chief U.S. economist at MFR Inc. “From a longer-term perspective, it is important to keep in mind that in the seven years leading up to the peak in July 2006, the nonseasonally adjusted national 20 city home price index jumped by 155% (126 index points)… So far, this index has dropped by 32% (66 index points) in the 55 months since the peak.

I could fill the page with pessimists, hardly a positive thought out there today. I think the most positive take away is that at least  this is an orderly retreat, rather than the kind of screeching declines we have seen. 

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