Pandemic's Disproportionate Effects on Housing Supply, Affordability

Posted To: MND NewsWire

The Urban Institute says that homes categorized as low priced, that is in the bottom 20 percent of the distribution, appreciated 126 percent between the turn of the century and the end of 2019. During that same 20-year period, those in the top 20 percent of the price distribution increased only 87 percent . An analysis of 285 metropolitan statistical areas (MSAs) by Jung Hyun Choi, John Walsh, and Laurie Goodman found that rapid employment growth combined with supply constraints from zoning and other regulations was one driver of this disproportionate price growth on the low end. Those MSAs with the greatest constraints on housing inventory experienced the greater price growth on the low end relative to the high. They measured this using two indices, Wharton Residential Land Use Regulatory…(read more)

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Source: Mortgage News Daily

Broker, Doc Products; Customer Experience Study; Correspondent Changes

Posted To: Pipeline Press

Yesterday afternoon my cat Myrtle was watching me mop the kitchen floor. (Hey, it’s not going to mop itself, right? And it is mildly amusing to use certain products – insert slogan contest here for 4 th grade humor.) While toiling, besides thinking about how much of a raise I am going to give the housecleaner, and the potential 20% unemployment rate to be announced tomorrow, I was ruminating on how residential lending continues to be altered. For example, not only is National MI selling stock , but residential mortgages have created an increase in mortgage market share for credit unions and have become the main catalyst for overall loan growth at credit unions for Q1 2020. And Reverse Mortgage Insight tells us that Home Equity Conversion Mortgage (HECM) endorsements more than tripled…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Another Chance to Defend The Range

Posted To: MBS Commentary

Yesterday's econ data caused a stir in the bond market, forcing yields to break above a key ceiling at .74%. Can they make it back below that ceiling today or will things go from bad to worse with a break of the next important ceiling at .79%? The following chart shows the recent drama (I adjusted the lines just slightly to account for the past few days of movement. They now rest perfectly on closing highs and lows. That means red candlesticks may be below the bottom line and green candlesticks may be above the top line as long as the top of a red candlestick or the bottom of a green one is inside the trend). Notice the head-fake breakout late last week and the quick reversal that has followed. Notably, without yesterday's trading session, there wouldn't be any drama here to discuss…(read more)

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Source: Mortgage News Daily

MBS RECAP: Bonds Suddenly Wondering if They've Been Too Gloomy on The Economy

Posted To: MBS Commentary

Econ Data Causing Bonds to Reconsider Commitment to Super Low Yields Bonds haven't been interested in econ data because none of it has had the ability to tell much of a story. Today's ADP Employment report is arguably an exception as it was staggeringly stronger than expected. Other data surprised to the upside, stocks set more multi-month highs, and bonds suddenly find themselves on the run. Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying ADP Employment: -2.760m vs -9.000m f'cast, -19.557m prev ISM Non-Manufacturing 45.4 vs 44.0 f'cast, 41.8 previously Factory Orders -13.0 vs -14.0 f'cast Market Movement Recap 08:35 AM Bonds were modestly weaker overnight and are now under additional pressure after the much stronger-than-expected ADP Employment Report. 10yr…(read more)

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Source: Mortgage News Daily

Rough Day For Mortgage Rates

Posted To: Mortgage Rate Watch

Mortgage rates were decisively higher today as the bond market lost ground due to surprisingly strong economic data. Mortgage rate movement is mainly a factor of mortgage bond prices. In turn, mortgage bonds tend to move in broadly the same direction as the US Treasury market. That’s why so many people think mortgage rates are based on 10yr Treasury yields. It wouldn’t matter either way today as both mortgage bonds and Treasuries lost ground quickly after several economic reports came out much stronger than expected. Taken together, the reports (which still suggest the economy is heavily affected by covid-related shutdowns) point to an economic recovery that may be underway sooner and in healthier fashion than economists expected. Part of the reason rates have been as low as they are is the…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: How Data Can Move Markets Even When It's Not Supposed To

Posted To: MBS Commentary

It's the first Wednesday of the month and thus time for ADP Employment data. The stated intention of this report is to predict the final revision of the official nonfarm payroll (NFP) count in the big jobs report that follows 2 days later. Because of its connection to NFP, ADP payroll data has been a very big market mover at times. But because NFP counts and revisions have often defied logic , ADP (which is arguably in a much better position than the US government to keep a timely and accurate finger on the pulse of payrolls) has also been called into question in terms of relevance. Despite that, a BIG beat or miss in the ADP data has always been worth something to the bond market–at least during times where the bond market is tuned in to payrolls counts. Now today, we have the biggest…(read more)

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Source: Mortgage News Daily

Subservicing, VA IRRRL, Workflow products; Wholesalers Shifting Product Gears

Posted To: Pipeline Press

From the Bay Area Marcus L. writes, “I miss the days when Tiger King was the most controversial thing going on.” Everything is a controversy these days, including where the real estate market is heading. Supply is limited, demand is decent, case closed. Things are re-opening, but can people qualify for a loan? It is almost as if prognosticators (not procrastinators) want their forecasts to materialize right away. Many real estate markets around the nation were under-supplied going into the shutdown in mid-March, especially in low and mid-price levels. There wasn’t a lot of speculation taking place, and ATR was in place. Few will argue that the quality of borrowers was very good, and continues to be. But some prognosticators expect house price declines to be very possible once…(read more)

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Source: Mortgage News Daily

Falling Mortgage Rates Boost Purchase Apps 18% YoY

Posted To: MND NewsWire

Refinancing volume continued to slide but purchase mortgage activity partially compensated during the holiday shortened week that ended May 29. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, probably due to the holiday, the Index was down 14 percent. Refinancing slipped another 9 percent although it remained 137 percent higher than the same week one year ago. Over the last seven weeks the Refinancing Index has lost an aggregate of 30 percentage points. The refinance share of mortgage activity decreased to 59.5 percent of total applications from 62.6 percent the previous week. The Purchase Index posted its seventh straight…(read more)

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Source: Mortgage News Daily

Mortgage Rates Up or Down, Depending on Lender

Posted To: Mortgage Rate Watch

Mortgage rates were mixed today with some lenders improving and others moving higher. This isn’t so much a factor of anything that happened today as much as it is about what lenders did yesterday. Specifically, the bond market (which underlies rate movement) was stronger in the afternoon. This meant that mortgage lenders could adjust yesterday’s mortgage rates slightly lower. Some of them did. Some of them didn’t. Simply put, lenders who kept rates unchanged yesterday afternoon were able to offer slightly lower rates today. Lenders who dropped rates yesterday were forced to increase slightly. In the bigger picture, we’re not talking about substantial movement. The average homeowner (or prospective homeowner) will be seeing rates that are effectively at all-time lows , albeit with closing costs…(read more)

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Source: Mortgage News Daily

MBS RECAP: Here's The Only Reason Mortgage Rates Have Moved Lower Recently

Posted To: MBS Commentary

Here's The Only Reason Mortgage Rates Have Moved Lower Recently "Because they were so much higher than they should have been in March and April…" Seriously, that's the reason mortgage rates have been able to move lower even as Treasury yields and MBS prices suggest moderately higher rates. We discuss this in greater detail in the video and in the Day Ahead. Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying Market Movement Recap 08:20 AM Treasuries were stronger in Asia but yields moved higher during European hours. Equities markets at home and abroad generally followed the same pattern (i.e. prices were lower in Asia and higher in Europe). MBS are starting the day an eighth of a point weaker. 12:38 PM For the 2nd day in a row, the close of European markets is…(read more)

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Source: Mortgage News Daily