economy

Austin Mortgage Market Update – For the week of January 18, 2010

Last week, housing market news was thin on the ground. It was good to see that fixed-rate mortgage rates dropped again, according to Freddie Mac's weekly survey of conforming mortgages, which came out Thursday. The report was accompanied by encouraging words from Freddie Mac's chief economist Frank Nothaft, who said: "The Federal Reserve recently reported positive news in both the housing market and the overall state of the economy in its January 13 regional economic report....Economic activity improved in 10 of its 12 districts. Home sales...increased due in part to the home-buyer tax credit and house prices appeared to have changed little since its last report." The bottom in home pricing appears to have formed in many areas of the country.

January 18, 2010|Inside Lending Newsletter|

Interest Rate Forecasting Has Been Tough to Handicap – If You Like IT, Lock It

Keep in mind that interest rate forecasting has been tough to handicap, giving us hope for a day only to turn into a one hit wonder. Same rules apply with such a volatile environment; if you like it, lock it. We’ll try to wrap this up later today.

January 15, 2010|Austin Mortgage Market|

Employment Data Surprises

After several weeks of strong performance, it was a tough week for mortgage markets. Stronger than expected economic data and an improved economic outlook from the Fed increased concerns about future inflationary pressures. Rising inflation expectations result in higher yields, and mortgage rates increased during the week.

December 4, 2009|MBS Quoteline Newsletter|

With stocks near unchanged and a basket of economic uncertainty, best to not throw caution to the wind

With stocks near unchanged and a basket of economic uncertainty, best to not throw caution to the wind. Bernanke's mandate for low interest rates well into the future, coupled with a staggering deficit, falling dollar, 3 trillion in health care costs on the docket, and taxes for both individuals and small business destine to rise in 2010 will create difficult challenges and unintended consequences. With the Fed policy a given, we expect to see a floor under the bond market, supporting both treasury and mortgage back security pricing. Buying sponsorship (upcoming auctions) and year end book closings will be the challenge (liquidity issues).

November 17, 2009|Austin Mortgage Market|

Overall, the report shows that the employment situation remains depressed and economists are now saying that approximately 100k new jobs need to be created each month in order to meet the demand of new workers entering the market

This morning, the October employment report produced some surprises. Most notably, the unemployment rate rose to 10.2%, well higher than expected, and its highest level since 1983. We did hit the jobs number right on the head at190,000 job losses for the month, but August and September's job losses were revised with 91,000 fewer lost. September numbers were revised to only being down 219k from the 263k previously reported. Overall, the report shows that the employment situation remains depressed and economists are now saying that approximately 100k new jobs need to be created each month in order to meet the demand of new workers entering the market.

November 6, 2009|Austin Mortgage Market|

Austin Mortgage Market Update For the week of October 26, 2009

The week ended with the terrific news that Existing Home Sales shot UP 9.4% in September to a 5.57 million annual rate. This was almost twice the increase the consensus expected and a nice boost coming off the slight drop we saw in August. Best of all, the inventory is now down to a 7.8 month supply, getting us closer and closer to the 6-month level of a normal housing market.

October 26, 2009|Inside Lending Newsletter|

While a number of Fed Governors are pounding the rate rising drum, the policy statement continues to favor low rate, easy money well into 2010

While a number of Fed Governors are pounding the rate rising drum, the policy statement continues to favor low rate, easy money well into 2010. What they would like to do is communicate an upcoming transition period. One that would produce a soft landing instead of going cold turkey. With their focus on employment and inflation, it would seem that rates will remain low until the unemployment picture stabilizes and then starts to improve.

October 24, 2009|Austin Mortgage Market|

We’ll stick with our neutral call, keeping one eye on a stock chart and the other on MBS

With most chart time frames in harmony, the future of interest rates will most likely follow the stock market’s lead. We’ll stick with our neutral call, keeping one eye on a stock chart and the other on MBS.

October 19, 2009|Austin Mortgage Market|

Inside Lending: Austin Mortgage Market Update For the week of October 12, 2009

Austin Mortgage Market Update - At the end of September, the supply of homes for sale was reported down 1.8% from the previous month in 27 major metropolitan areas. We all know the factors. Home prices are very affordable, mortgage rates and very favorable and first-time homebuyers are taking advantage of the $8,000 tax credit set to expire at the end of November, now just seven weeks away. The Mortgage Bankers Association saw loan applications for home purchases rise 13.2% last week, as the MBA's Purchase Index hit its highest level since last January. The average rate on 30-year fixed rate mortgage slid to 4.89% with an average 1.13 points (including the origination fee) for 80% loan-to-value ratio loans to borrowers with good credit. Freddie Mac's weekly survey of conforming mortgage rates put the average 30-year fixed rate mortgage at 4.87% with an average 0.7 point for 80% loan-to-value ratio loans to borrowers with good credit.

October 12, 2009|Inside Lending Newsletter|

FOMC made no mention of an exit strategy, instead talking about keeping Austin mortgage rates low for an extended period of time

With the FOMC dust settled, a couple of points are worth mentioning. First up, the FOMC made no mention of an exit strategy, instead talking about keeping Austin mortgage rates low for an extended period of time. Number two was the statement about continuing the purchase of Treasuries and MBS and extending the period until the end of Q1, allowing for a wind down period. Seems obvious that they are more concerned about housing and the economy versus inflation and deficits. One reason for the accommodative policy may be the building inventory due to future delinquency and foreclosures, estimated to be 7 million units. This is what we call “shadow inventory”, not yet on the books but in the pipeline nonetheless. That number is huge, representing an entire year of sales. We shall see.

September 24, 2009|Austin Mortgage Market|

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