Builder Survey Predicts a Dip in New Home Sales

Posted To: MND NewsWire

The Mortgage Bankers Association (MBA) is predicting a slowdown in new home sales when the Census Bureau releases its statistics next week. MBA’s Builder Application Survey (BAS) data for February 2021 shows mortgage applications for new home purchases increased 9.2 percent compared to a year ago but were down by 9 percent year-over-year. This change does not include any adjustment for typical seasonal patterns. Based on these applications and other data, MBA estimates that new single-family homes were selling at a seasonally adjusted annual rate of 748,000 units in February. This is a decline of 17.3 percent from the January pace of 905,000 units. On an unadjusted basis, MBA estimates the month’s sales numbered 65,000 units, a 5.8 percent decrease from 69,000 the prior month. “The economy…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: More Carnage. Why Is This Happening?

Posted To: MBS Commentary

Powell was reasonably dovish yesterday. He immediately shut down a reporter who asked when we could talk about tapering. He reiterated the need to remain accommodative for longer than normal this time and that the Fed's reaction function would not be as anticipatory as it had been in the past (i.e. they're going to wait to actually confirm certain things are happening as opposed to merely being pretty sure those things are about to happen). The median Fed forecast still calls for 2 more years of zero rates. The list goes on. But one counterpoint to the ostensibly dovish commentary is that by delaying the reaction function and tolerating 2.5%-ish inflation, the Fed runs the risk of ushering in an era of ACTUAL inflation–the likes of which we haven't really seen in a long time (unless…(read more)

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Source: Mortgage News Daily

MLO Jobs; Pricing, Sales, DPA, QC Reporting Products; Wholesale and Correspondent News; Bond Market/Fed Disconnect

Posted To: Pipeline Press

The Internal Revenue Service is not known for being creative, but yesterday it was announced that the usual tax deadline of 4/15 has been moved to 5/15. People can be creative. For example, here are easy steps on how to walk into a room and interrupt yourself during a Zoom meeting. Plenty of folks are weary of having Zoom meetings, and are anxious for a return to a “normal” office environment, where you can walk into the lunchroom and chat with co-workers, others not so much. Will our industry creatively shift to a “Hub and Home” work situation? Employees are continuing to be very productive at home, so why make them commute? Employers can’t force employees to be vaccinated. Are processors going to hear, “If you’re not vaccinated, don’t bother…(read more)

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Source: Mortgage News Daily

Mortgage Rates End High After Starting Day Higher

Posted To: Mortgage Rate Watch

Mortgage rates started the day in bad shape after significant bond market weakness overnight. Treasury yields rose roughly 0.05%, and that sort of move typically coincides with mortgage rates rising nearly as much. Today wasn’t much of an exception. The average lender started out with effective 30yr fixed rates roughly 0.03-0.04% higher than yesterday, which means they were the highest in a year! Note: when we reference higher “effective rates,” it usually means that the costs associated with yesterday’s rates have moved as opposed to the rate itself. Those upfront costs provide more of a fine-tuning adjustment. Today’s big to-do was the policy announcement from the Fed–not so much because of any expected policy changes, but rather due to the potential extension of a temporary rule that allowed…(read more)

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Source: Mortgage News Daily

Millennials Make up Largest Share of Buyers for 8th Consecutive Year

Posted To: MND NewsWire

Whether or not it was another biproduct of the pandemic, The National Association of Realtors® (NAR) said the popularity of multigenerational homes increased last year. Homes that will house adult siblings, adult children, parents, or grandparents were purchased by 18 percent of homebuyers between the ages of 41 to 65. Those aged 75 to 95 were the second most likely to purchase a multigenerational home. This is among the key findings of NAR’s annual Home Buyer and Seller Generational Trends Report derived from a survey of persons who had purchased a home over the prior 12 months. “There are a variety of reasons why large families and extended families are opting to live together , one of which is that it’s a great way to save money,” said Jessica Lautz, NAR’s vice president of demographics…(read more)

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Source: Mortgage News Daily

Construction Starts and Permits Took a Double-Digit Hit in February

Posted To: MND NewsWire

It looked last month as though residential construction was about to take off. While starts were down in January, permits surged by 10.4 percent. Builders apparently had second thoughts in February as both measures fell by double digits. The U.S. Census Bureau and Department of Housing and Urban Development said permits for construction of residential units were at a seasonally adjusted rate of 1,682,000. This is 10.8 percent below the revised (from 1,881,000) rate in January of 1,886000. The February rate was still a 17.0 percent improvement on the permitting rate a year earlier. Permits were expected to decline after January’s substantial increase, but analysts polled by Econoday were still looking for a much higher number. Estimates ranged from 1,600,000 to 1,862,000 with a consensus of…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Losses Accelerate. Will The Fed Save Us?

Posted To: MBS Commentary

For the 17th time in 2021, we can unhappily re-use the same lead in: just when you thought bonds surely wouldn't get any weaker… 10yr yields hit more new long-term highs overnight (currently at 1.66%+, putting the 1.75% target–the one that seemed way too far away a few days ago–easily within reach of a negative Fed surprise). Speaking of the Fed, that is obviously the focus today. And it's a very abnormal Fed day due to the SLR issue. If you're thinking to yourself "what the hell is this SLR business?!" you're not alone. Read this if you haven't. And for the other 80% of you that don't click links, SLR= supplemental leverage ratio. It applies to big banks and limits the amount of their total assets devoted to lending (or owning bonds). In April 2020, the…(read more)

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Source: Mortgage News Daily

MLO Jobs; Broker, Underwriting, Non-QM, Processing Tools; Does the Fed Expect a Fast, Hot Recovery?

Posted To: Pipeline Press

Many years ago I asked my father about why we didn’t have a home gym. He replied, “Want exercise? Jog to the liquor store and get me a beer, then do a 100 pushups, and we’ll talk about it.” Okay, he didn’t really say that, but up until recently, health and wellness factors in housing were way down the priority list for builders. That has changed for new construction . But there is plenty of old construction around, as evidenced by, in 2020, sales of previously owned U.S. homes surged to their highest level in 14 years, and many economists forecast sales to rise again this year. And in general there are millions of more home buyers every year as people in their late 20s and 30s hit their home buying stride with lots of ducats in their pockets, wondering if the new…(read more)

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Source: Mortgage News Daily

Lumber Prices and Rising Rates Take a Toll on Builder Confidence

Posted To: MND NewsWire

Escalating costs took a toll on builder confidence this month. The National Association of Home Builders (NAHB) said its Housing Market Index dipped two points from its February level. At 82 it is down 8 points from the all-time high it established last November. NAHB’s chief economist Robert Dietz said, while there is still a high volume of buyer traffic and strong consumer demand, rising lumber prices, especially for softwood lumber and other material costs as well as delivery delays, have pushed builder confidence lower. Lumber prices are up by about 200 percent since April, driven by shortages and high demand. This his added about $24,000 to the price of a new home at a time when interest rates are also rising. Derived from a monthly survey that NAHB has been conducting for 35 years, the…(read more)

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Source: Mortgage News Daily

MLO, Recruiting, Training Jobs; Sales, Doc, Processing Tools; LLPA Price Adjustment Changes Sweep Through Investors

Posted To: Pipeline Press

Time flies. Ringo is 80!? I bet he’s done some vacationing in the last 60 years. I gave my wife a dart and a poster of a world map and told her, “Throw this and wherever it lands I’m taking you on vacation when this pandemic is over.” Turns out we’re going to be spending two weeks behind the fridge. Will there be demand for summer vacations this year? There is certainly an ample supply of places to go and stay… Supply and demand rules all! For example, rents have declined dramatically in big cities like San Francisco and New York as WFH people have moved out & demand dropped, but landlords are beginning to lease up again as decreased rents appear to be enticing tenants to return to the city, or hold on to current residents. In Manhattan, Brooklyn, and…(read more)

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Source: Mortgage News Daily