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Mortgage Rate Swings May Mean “Bumpy” 2014 Housing Market        

12/30/2013

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Climbing mortgage rates in 2013 corresponded with declines in home buying, a trend that could to some extent continue in coming months as interest rates adjust to shifts in the Federal Reserve’s monetary stimulus effort.

The average of 30-year fixed-rate mortgage interest rates so far this year compared against new-home sales illustrates that inversely proportional relationship: When interest rates go up, demand from would-be homeowners drops. 

When rates as measured by Freddie Mac started rising in May and averaged 3.54% for the month, the seasonally adjusted annual rate of new home sales dropped by 4% from the prior month, according to the most recent housing data from the Commerce Department. Meanwhile, in October, mortgage rates dropped by three-tenths of a percentage point just as new home sales surged 18%.

The trend could continue in 2014, experts said, especially if rates change significantly.

“Particularly if we see a pretty quick rise – maybe a half a percentage point to percentage point rise — it’ll make for some bumpy demand in 2014,” said Ellen Haberle, an economist at Redfin, an online real-estate firm.

 Mortgage rates first spiked in May after the Fed signaled it was considering pulling back its bond-buying program meant to keep a lid on long-term interest rates. The housing market initially stumbled, but started to recover once the central bank decided against any changes to the stimulus effort throughout the summer and into the fall.

 Mortgage rates are still at historical lows, but they are already starting to creep upward once again. Freddie Mac said Thursday the average 30-year fixed rate mortgage was at 4.48%, its highest level since mid-September.

 The interest rate on U.S. Treasurys is also going up. On Thursday, the yield on 10-year notes hit 3%, its highest level since September and the second time this year it has reached that mark. That threshold could signal higher interest rates ahead because it is used as a reference point for the cost of borrowed money for U.S. consumers and businesses. A higher yield can push up mortgage rates.

 While rising interest rates could continue to drag on the housing market, it could also encourage those people waiting on the fence to make a decision to buy.

 Even with rising rates, homes data is starting to show underlying strength in the market. The Commerce Department’s new-home sales reports for October and November marked the two strongest months of new-home sales since mid-2008, and sales in November alone were up nearly 17% from a year earlier, the report said.

 New home sales data are a leading indicator in housing trends because  sales are tallied at the signing of a contract rather than the closing. But they are an imperfect gauge because homebuilders are sometimes willing to buy down interest rate for buyers.

 Data for pending-home sales in November, which is a similar measure for previously owned homes, will be released on Monday by the National Association of Realtors

source: http://blogs.wsj.com/economics/2013/12/27/mortgage-rate-swings-may-mean-bumpy-2014-housing-market/
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U.S. mortgage applications fall as refinance hits five-year low: MBA

12/27/2013

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(Reuters) - Applications for U.S. home mortgages fell for a second week and hit a 13-year low as mortgage rates rose due to a bond market sell-off following the Federal Reserve's decision to pare its bond purchase stimulus in January, an industry group said on Tuesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 6.3 percent to the lowest level since December 2000.

Mortgage applications have fallen sharply since this summer on a jump in home finance costs as benchmark Treasuries yields eventually rose to a two-year high.

Last Wednesday, Fed policy-makers opted to make their tapering move, which will begin in January with a $10 billion monthly reduction evenly split between Treasuries and mortgage-backed securities to $75 billion.

"Following the Federal Reserve's taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

The rate on fixed 30-year mortgages averaged 4.64 percent last week, up 2 basis points from the prior week. It fell short of the two-plus year high of 4.80 percent set in September.

The MBA's seasonally adjusted index of refinancing applications fell 7.7 percent.

The gauge of loan requests for home purchases, a leading indicator of home sales, fell 3.5 percent to its lowest level since February 2012.

The refinance share of total mortgage activity slipped to 65 percent from 66 percent the previous week, while adjustable-rate mortgages rose 8.3 percent last week to the biggest share since July 2008.

The MBA typically reports its weekly application data on Wednesday, but released the data a day early due to the Christmas holiday. It said it will suspend release of the data next week. It will resume the release of the data on January 8 with results of the two prior weeks.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Source: http://www.reuters.com/article/2013/12/24/us-usa-economy-mortgages-idUSBRE9BH0IK20131224

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Money Minute: Waiting for the Fed's Decision; Mortgages to Get Pricier

12/18/2013

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CoreLogic Reports 791,000 More Residential Properties Return To Positive Equity In Third Quarter Of 2013 

12/17/2013

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IRVINE, Calif., Dec. 17, 2013 /PRNewswire/ -- CoreLogic(R) (NYSE: CLGX), a leading residential property information, analytics and services provider, today released new analysis showing approximately 791,000 more residential properties returned to a state of positive equity during the third quarter of 2013, and the total number of mortgaged residential properties with equity currently stands at 42.6 million. The analysis indicates that nearly 6.4 million homes, or 13 percent of all residential properties with a mortgage, were still in negative equity at the end of the third quarter of 2013. This figure is down from 7.2 million homes, or 14.7 percent of all residential properties with a mortgage, at the end of the second quarter of 2013*. 

 Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

The national aggregate value of negative equity was $397 billion at the end of the third quarter compared to $430 billion at the end of the second quarter of 2013, a decrease of $33.7 billion. This decrease was driven in large part by an improvement in home prices.

Of the 42.6 million residential properties with positive equity, 10 million have less than 20 percent equity. Borrowers with less than 20 percent equity, referred to as "under-equitied," may have a more difficult time obtaining new financing for their homes due to underwriting constraints. Under-equitied mortgages accounted for 20.4 percent of all residential properties with a mortgage nationwide in the third quarter of 2013, with more than 1.5 million residential properties at less than 5 percent equity, referred to as near-negative equity. Properties that are near negative equity are considered at risk should home prices fall.

"Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013," said Mark Fleming, chief economist for CoreLogic. "Fewer than 7 million homeowners are underwater, with a total mortgage debt of $1.6 trillion. Negative equity will decline even further in the coming quarters as the housing market continues to improve."

"We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap," said Anand Nallathambi, president and CEO of CoreLogic. "Home price appreciation has helped more than 3 million property owners regain equity since the first quarter of 2013." 

read more: http://online.wsj.com/article/PR-CO-20131217-904750.html?dsk=y
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How the Tax Rules Work When You Refinance Your Home Mortgage      

12/16/2013

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Fannie Mae Mortgage-Guarantee Fees Increased by U.S. Overseer 

12/11/2013

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Job growth drives mortgage rate jump

12/9/2013

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Mortgage rates jumped this week on stronger-than-expected economic reports, according to Freddie Mac's weekly survey.

The 30-year, fixed-rate loan, the most popular product for homebuyers, rose to 4.46% from 4.29% last week. The average rate on a 15-year, fixed-rate mortgage, typically used for refinancing higher interest mortgages, also jumped 0.17 percentage point to 3.47%. 

 This week's rate approached a high for the year. Rates on the 30-year have ranged from a low of 3.34% in the first week of January to a high of 4.58% in August.

Frank Nothaft, Freddie's chief economist, cited job creation as a prime reason for the rate spike.

"Private companies added 215,000 new jobs in November according to the ADP employment report, well above the consensus," he said. "In addition, revisions added 54,000 jobs in the prior month." 

Read more: http://money.cnn.com/2013/12/05/real_estate/mortgage-rate-rise/
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Fixed Mortgage Rates Move Higher

12/6/2013

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Average interest rates on fixed-rate mortgages jumped higher this week according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS) for the week ending December 5th, 2013.

Fixed Rate Mortgages:

Interest rates on fixed rate mortgages pushed higher this week with the 30-year fixed rate mortgage increasing by seventeen basis points to an average of 4.46 percent with an average of 0.5 points. Last week the average rate increased by seven basis points. A year ago, the 30-year fixed rate mortgage averaged 3.34 percent.

Average 30-year fixed rates were generally the lowest in the Southeastern portion of the United States where mortgage rates averaged 4.43 percent while the highest rates were reported in the North Central area of the country where interest rates averaged 4.50 percent.

The average rate for a 15-year fixed mortgage was 3.47 percent this week with an average of 0.4 points, up from an average of 3.30 percent last week. At this time last year, the 15-year fixed rate mortgage averaged 2.67 percent.

Adjustable Rate Mortgages:

Interest rates for adjustable-rate mortgages were mixed this week with the 5-year Treasury-indexed hybrid ARM averaging 2.99 percent, with an average of 0.4 points, up from an average of 2.94 percent last week. The 5-year adjustable rate mortgage averaged 2.69 percent a year earlier.

The 1-year Treasury-indexed adjustable rate mortgage averaged 2.59 percent with an average of 0.4 points, down slightly from an average of 2.60 percent last week. A year ago, the 1-year adjustable rate mortgage averaged 2.55 percent.

Source: http://loanrateupdate.com/mortgages/fixed-mortgage-rates-move-higher

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5 Great Reasons Why You Should Think About Refinancing Your Mortgage

12/5/2013

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30-year mortgage rate rises again: Zillow

12/4/2013

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 Real-estate website Zillow Inc. Z -2.93% said its real-time rate on 30-year fixed-rate mortgages increased in the latest week, rising for a second straight week.

The 30-year fixed-mortgage rate on Zillow's Mortgage Marketplace, which tracks mortgages on the company's website, was up at 4.25% from 4.14% a week earlier.

Although Federal Reserve Chairman Ben Bernanke has said the central bank is committed to keeping short-term interest rates low for an extended period, Zillow expects upward pressure and volatility in mortgage rates, according to Svenja Gudell, economic research director at Zillow.

"This week will bring more movement as a lot of important economic data is set to be released," Ms. Gudell said.

Zillow said the rate for a 15-year fixed home loan was 3.22% compared with 3.13% last week. The rate for a 5-1 adjustable-rate mortgage was 2.72%, unchanged from the previous week. A 5-1 ARM has an initial rate that applies for the first five years of the loan and then adjusts annually.

Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the company's website. 

Source: http://www.marketwatch.com/story/30-year-mortgage-rate-rises-again-zillow-2013-12-03?reflink=MW_news_stmp
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