Inman

Real estate daily market update: February 8, 2018

AshDesign / Shutterstock.com

 We’ll add more market news briefs throughout the day. Check back to read the latest.

Most recent market news

Thursday, February 8

Zillow Mortgage Rate Ticker

Current rates for 30-year fixed mortgages by state. Source: Zillow

“Mortgage rates moved sharply higher last week, spurred by a sell-off in the stock market and further evidence of a strong economy that will soon force the world’s major central banks to push interest rates higher,” said Aaron Terrazas, senior economist at Zillow.

“Rates matched their highest level since September 2014. This week political uncertainty should wane as Congressional negotiators have agreed to a two-year budget, but financial market volatility could continue. Short-term market fluctuations aside, the trend in rates is clearly upward after spending years near historic lows.”

Freddie Mac Primary Mortgage Market Survey (PMMS)

Attributed to Len Kiefer, Deputy Chief Economist:

“The U.S. weekly average 30-year fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week. Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed.

“The 30-year fixed mortgage rate is up 33 basis points since the start of the year. Will higher rates break housing market momentum? It’s too early to tell for sure, but initial readings indicate housing markets are sustaining their momentum so far.

“The MBA reported that purchase applications are up 8 percent from a year ago in their latest Weekly Mortgage Applications Survey.”

Mortgage Bankers Association’s (MBA) National Delinquency Survey

“The 30-day delinquency rate actually dropped by 15 basis points in the fourth quarter of 2017, as homeowners affected by Hurricanes Harvey, Irma and Maria either became current on their payments or moved to later stages of delinquency,” according to Marina Walsh, MBA’s Vice President of Industry Analysis.

“However, while the earliest-stage delinquency rate dropped, the 60-day and 90-day delinquency rates did increase in the fourth quarter of 2017. Despite the hurricanes and these quarter-over-quarter results, most states are seeing overall mortgage delinquency rates at lower levels than a year ago.”

“The FHA overall delinquency rate in the fourth quarter of 2017 is higher compared to the fourth quarter of 2016 in all but three states. FHA borrowers appear to be impacted not only by the storms but other factors that could be stretching their ability to make payments,” Walsh continued.

“Regardless of the hurricanes, an increase in delinquencies – particularly FHA delinquencies – off historic lows is not particularly surprising given the seasoning of the loan portfolio, expected higher interest rates, declining average credit scores on new FHA endorsements since 2014 and rising debt-to-income ratios. Mitigating factors include low unemployment and increasing home equity levels that provide homeowners with more options to cure a potential default.”

“Storm-related foreclosure moratoria continue to play a large factor in keeping foreclosure starts at bay, as the fourth quarter saw little movement in either foreclosure starts, or foreclosure inventory. As forbearance periods expire, an increase in the percent of loans in foreclosure is likely. We anticipate it will be several more quarters before the effects of the September hurricanes on the survey results dissipate, especially given extended forbearance periods.”

News from earlier this week

Wednesday, February 7

Fannie Mae Home Purchase Sentiment Index (HPSI)

Source: Fannie Mae

“HPSI rebounded from last month’s dip to a new survey high in January, in large part due to the spike in consumers’ net expectations that home prices will increase over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances. Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it’s a good time to sell a home but also a modest weakening in the net share who say it is a good time to buy.

“At the start of 2018, it is still too early to determine the overall effect of the new tax legislation on housing, and we will need to see whether positive impacts on both housing demand and supply materialize in the coming months.”

Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey

Tuesday, February 6

CoreLogic Home Price Index (HPI) and HPI Forecast

CoreLogic

CoreLogic

“The number of homes for sale has remained very low,” said CoreLogic chief economist Dr. Frank Nothaft. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years,” he said in the report.

“Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI)

Mortgage Bankers Association; Powered by Ellie Mae’s AllRegs Market Clarity

“Credit availability increased across the board in January, more than reversing December declines in almost all component indices,” said Lynn Fisher, MBA’s Vice President of Research and Economics.

“Jumbo credit programs rebounded most strongly and reached a new series high, driven by an increase in the number of programs with reduced documentation requirements. In government lending programs, credit availability remains somewhat lower than the rest of 2017.”

Monday, February 5

Black Knight’s Mortgage Monitor

December First Look release

Hurricane impact update

“Hurricanes Harvey and Irma significantly impacted 2017 mortgage performance metrics,” said Black Knight Data & Analytics Executive Vice President Ben Graboske. “Overall, there were approximately 164,000 more past-due loans at the end of 2017 than the year before, pushing the national delinquency rate to a 23-month high.

“When Black Knight isolated non-hurricane-impacted areas – which represent 90 percent of the entire active U.S. mortgage universe – we see the national delinquency rate actually fell to 11 percent below long-term norms. Likewise, the 90-day delinquency rate was also up six percent from last year, with roughly a third more seriously delinquent loans than we’d expect in a healthy market.

“Excluding the hurricane impact, though, we see that there were 84,000 fewer loans 90 or more days past due than last year; a 14 percent reduction. The national non-current rate – which tracks all loans 30 or more days past due or in active foreclosure – edged down slightly from 2016, even including the effects of the storms.

“Isolating those non-hurricane areas, though, we see that the total number of past-due mortgages fell by more than 140,000 – which brought the non-current rate in these areas down 10 percent below long-term norms.”

Email market reports to press@sandbox.inman.com.