Weekly mortgage applications fall 2.5% despite a sharp drop in rates

Overall mortgage application volume fell 2.5 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume pulled back the most, with those applications falling 5 percent for the week and 2 percent annually. Home sales fell at the end of the year, but so did mortgage rates, and agents report seeing higher demand in direct response to lower rates. The average contract interest rate for 30-year fixed-rate mortgages wit


Overall mortgage application volume fell 2.5 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Purchase volume pulled back the most, with those applications falling 5 percent for the week and 2 percent annually. Home sales fell at the end of the year, but so did mortgage rates, and agents report seeing higher demand in direct response to lower rates. The average contract interest rate for 30-year fixed-rate mortgages wit
Weekly mortgage applications fall 2.5% despite a sharp drop in rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-06  Authors: diana olick, ty wright, bloomberg, getty images
Keywords: news, cnbc, companies, applications, sharp, higher, fall, loan, lower, ago, despite, mortgage, volume, 25, interest, week, rates, rate, weekly, drop


Weekly mortgage applications fall 2.5% despite a sharp drop in rates

Mortgage demand continued to weaken, with homebuyers retreating the most last week.

Overall mortgage application volume fell 2.5 percent last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was nearly 10 percent lower than a year ago.

Purchase volume pulled back the most, with those applications falling 5 percent for the week and 2 percent annually. The signals are mixed, as real estate agents are reporting a surge in potential buyer activity through open houses in the past few weeks. Home sales fell at the end of the year, but so did mortgage rates, and agents report seeing higher demand in direct response to lower rates.

“I absolutely think it’s the interest rate, especially when they’re getting a 30-year mortgage and they’re going to be stuck with it for a long time,” said Laura Barnett, a Dallas area real estate agent who was surprised by the crowd of house hunters who came to one of her open houses last Sunday. “They have to make a really wise decision. They can always refinance later if it goes down, but they can never get this rate again if it goes back up.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69 percent from 4.76 percent last week, with points decreasing to 0.45 from 0.47 (including the origination fee) for loans with a 20 percent down payment. That rate was the lowest since April and just 19 basis points higher than one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.50 percent from 4.60 percent.

“Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2 percent lower than a year ago,” said Joel Kan, an MBA economist. “However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward.”

Applications to refinance a home loan, which are far more rate-sensitive week to week, increased 0.3 from the previous week but were still 19 percent lower than a year ago. Many borrowers already refinanced to rates in the 3 percent range a few years ago, so there is not a lot of incentive now to go through the process. For those who want to take cash out, they are now more likely to take out a second loan or line of credit rather than give up their current rock-bottom rate.

Mortgage rates started this week slightly higher, but then stabilized. There is no major economic data expected later this week to cause more volatility, but there is always the potential for political issues at home and abroad to cause major moves in the bond market.


Company: cnbc, Activity: cnbc, Date: 2019-02-06  Authors: diana olick, ty wright, bloomberg, getty images
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In a surprising twist, the state of housing demand is suddenly strong

After ending 2018 in a serious slump, demand for housing is suddenly soaring again, thanks to a drop in mortgage rates that could be temporary. Still, spring has sprung early, as buyers hope to get a quick deal before rates turn higher again. When rates began rising again last year, the combination of high prices and higher rates took its toll on sales, which fell sharply in the second half of last year to the lowest level in several years. But mortgage rates began to slide again in November, fa


After ending 2018 in a serious slump, demand for housing is suddenly soaring again, thanks to a drop in mortgage rates that could be temporary. Still, spring has sprung early, as buyers hope to get a quick deal before rates turn higher again. When rates began rising again last year, the combination of high prices and higher rates took its toll on sales, which fell sharply in the second half of last year to the lowest level in several years. But mortgage rates began to slide again in November, fa
In a surprising twist, the state of housing demand is suddenly strong Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-05  Authors: diana olick, source, -laura bennett, real estate agent in the dallas area
Keywords: news, cnbc, companies, dallas, housing, rates, buyers, drop, state, twist, demand, higher, surprising, suddenly, worked, strong, began, mortgage


In a surprising twist, the state of housing demand is suddenly strong

After ending 2018 in a serious slump, demand for housing is suddenly soaring again, thanks to a drop in mortgage rates that could be temporary.

Still, spring has sprung early, as buyers hope to get a quick deal before rates turn higher again.

The average rate on the 30-year fixed mortgage rose throughout much of 2018, hitting a recent peak in November at just more than 5 percent. Rates had been in the 3 percent range throughout 2016 and 2017, which helped produce the run-up in home prices.

When rates began rising again last year, the combination of high prices and higher rates took its toll on sales, which fell sharply in the second half of last year to the lowest level in several years.

But mortgage rates began to slide again in November, falling back even more dramatically in December, when the stock market sold off and the government was on the verge of what would become the longest shutdown ever. That drop in rates is now suddenly registering with buyers and reinvigorating housing demand.

“It kind of caught us a little bit off guard,” said Laura Barnett, a real estate agent at Re/Max DFW Associates in the Dallas area. “We actually did get a surge of buyers coming in. And, matter of fact, I worked with two this weekend, one of which is under contract, another is about to be.”

At an open house she worked last Sunday in Coppell, a suburb of Dallas, there was a traffic jam of buyers on the front stairway. Buyers like Celena Vittorio had one thing top of mind.

“Interest rates are low. They’re on the decline, which is great,” she said.


Company: cnbc, Activity: cnbc, Date: 2019-02-05  Authors: diana olick, source, -laura bennett, real estate agent in the dallas area
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Mortgage applications pull back 2.7% as rates turn higher again

Total application volume fell 2.7 percent compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Refinances, which are highly sensitive to weekly interest rate moves, pulled the volume lower. Borrowers saw a sharp drop in interest rates in December and jumped to take advantage at the start of this year. Mortgage applications to purchase a home fell 2 percent for the week but were 13 percent higher than a year ago. “Oftentimes, a big loss in eq


Total application volume fell 2.7 percent compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Refinances, which are highly sensitive to weekly interest rate moves, pulled the volume lower. Borrowers saw a sharp drop in interest rates in December and jumped to take advantage at the start of this year. Mortgage applications to purchase a home fell 2 percent for the week but were 13 percent higher than a year ago. “Oftentimes, a big loss in eq
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Company: cnbc, Activity: cnbc, Date: 2019-01-23  Authors: diana olick, lucy nicholson
Keywords: news, cnbc, companies, lower, rates, week, start, 27, mortgage, higher, turn, interest, volume, saw, refinance, fell, applications, pull


Mortgage applications pull back 2.7% as rates turn higher again

After two weeks of sizable gains, mortgage demand cooled last week.

Total application volume fell 2.7 percent compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 3.3 percent higher than a year ago.

Refinances, which are highly sensitive to weekly interest rate moves, pulled the volume lower. Applications to refinance a home loan fell 5 percent for the week and were 7 percent lower than a year ago but were still at the highest level since spring.

Borrowers saw a sharp drop in interest rates in December and jumped to take advantage at the start of this year. Last week, however, rates rose slightly. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.75 percent from 4.74 percent, with points decreasing to 0.44 from 0.45 (including the origination fee) for loans with a 20 percent down payment.

The change was tiny, but so many borrowers have already refinanced at rock-bottom rates that there was a small pool of those left who can still benefit from a refinance. Rates are now 11 basis points lower than the previous month but still 39 basis points higher than a year ago.

“Reversing the recent downward trend, borrowers saw increasing rates for most loan types last week, as better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets ultimately led to a rise in Treasury rates,” said Joel Kan, an MBA economist.

The refinance share of mortgage activity decreased to 44.5 percent of total applications from 46.8 percent the previous week.

Mortgage applications to purchase a home fell 2 percent for the week but were 13 percent higher than a year ago. Purchase volume is less sensitive to weekly rate moves, and buyers today continue to be frustrated by high home prices and short supply of entry-level homes. Sales of existing homes fell sharply in December, according to a report this week from the National Association of Realtors. Most blamed that on weaker affordability.

Interest rates took a breather to start this week, as investors saw renewed concern about the direction of trade talks between the U.S. and China. Stock markets sold off.

“Oftentimes, a big loss in equities markets can send money running to the bond market where it benefits interest rates,” said Matthew Graham, chief operating officer at Mortgage News Daily. “This was the case overnight with Chinese stocks leading the way. The strong start in bonds allowed lenders to keep rates roughly unchanged and — in some cases — slightly lower.”


Company: cnbc, Activity: cnbc, Date: 2019-01-23  Authors: diana olick, lucy nicholson
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The unusually large drop in home sales has real estate agents baffled

Real estate brokers are trying to figure out why sales of existing homes plunged in December. “The latest numbers do not reflect the lower, current mortgage rates compared to the November figures, so it’s really harder to explain.” “This weakness is certainly due to the sharp home price gains along with the rise in mortgage rates,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. In fact, mortgage rates were twice what they are now back in 2000. While mortgage rates did


Real estate brokers are trying to figure out why sales of existing homes plunged in December. “The latest numbers do not reflect the lower, current mortgage rates compared to the November figures, so it’s really harder to explain.” “This weakness is certainly due to the sharp home price gains along with the rise in mortgage rates,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. In fact, mortgage rates were twice what they are now back in 2000. While mortgage rates did
The unusually large drop in home sales has real estate agents baffled Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-22  Authors: diana olick, david paul morris, bloomberg, getty images
Keywords: news, cnbc, companies, economist, mortgage, large, agents, rates, real, supply, low, estate, drop, baffled, unusually, higher, homes, sales, fact, lower


The unusually large drop in home sales has real estate agents baffled

Real estate brokers are trying to figure out why sales of existing homes plunged in December.

The 4.6 percent monthly drop was unusually large, regardless of direction. The tally from the National Association of Realtors generally moves in the very low single digits month-to-month.

In fact, the move was one of the largest that didn’t involve some sort of change in government policy, like the homebuyer tax credit.

“The latest decline is harder to explain. Perhaps it is the decline in consumer confidence that’s been occurring in the latter half of 2018,” said Lawrence Yun, chief economist for the NAR. “The latest numbers do not reflect the lower, current mortgage rates compared to the November figures, so it’s really harder to explain.”

The supply of homes for sale also rose just over 3 percent compared with a year ago. Low supply had been holding sales back last spring, despite strong demand, so it would make sense that more supply would boost sales…unless this is a sign that demand is weakening.

“This weakness is certainly due to the sharp home price gains along with the rise in mortgage rates,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Affordability has been blamed for slower sales over the past six months, but sales in December matched the same pace as in the year 2000, and Yun argues that affordability is better now.

“Today it is actually more affordable compared to year 2000, yet we have about 20 million more jobs, so for home sales to be roughly equivalent means that in 2018 there is an underperformance of the overall housing sector.”

That underperformance cannot be blamed on the government shutdown, as most of these deals would have been signed in October, well before even the threat of that. It also can not be blamed on stock market volatility, as that didn’t really kick into high gear until mid-November.

Interest rates did move higher in October but started their slide lower in November, and rates were higher in September as well, so it wasn’t a sudden jump. Rates are also still historically low. In fact, mortgage rates were twice what they are now back in 2000. Of course home prices were lower then.

“While positive demographics and a solid job market would normally offset this relatively modest rise in mortgage rates, it’s been about 10 years since mortgage rates have been as high as they were at the November peak – suggesting that there is a larger share of current homeowners who feel they are “locked in” at a lower mortgage rate…reducing the number of them who would be looking for a home at a higher mortgage rate,” said David Berson, chief economist at Nationwide.

If anything, the drop may be due to the fact that home prices are actually falling in some areas, especially in the west, and in the rest of the nation the gains are shrinking. That makes it easier to afford a home, but less desirable if potential buyers are concerned that their new home’s value will immediately depreciate. No one wants to catch a falling knife.

The median home price of $259,100 in 2018 was the highest on record. While mortgage rates did drop in December, the expectation is that they will move higher this year, and that will hurt affordability further.

“Looking ahead to 2019, expect weaker existing-homes sales as the new year ushered in a government shutdown and worsening economic uncertainty,” said Cheryl Young, senior economist at Trulia.


Company: cnbc, Activity: cnbc, Date: 2019-01-22  Authors: diana olick, david paul morris, bloomberg, getty images
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Kevin O’Leary shares his best advice about paying off your mortgage

“Shark Tank” star and financial expert Kevin O’Leary has some advice for homeowners: “The No. 1 debt you want to get rid of is pay off your mortgage,” he tells CNBC Make It. O’Leary says paying off your mortgage quickly is especially important for young people. Of course, you want to think about your personal situation to decide whether paying off your mortgage early is financially feasible. “The top of my hit parade list advice on debt is this: Don’t get any,” O’Leary says.


“Shark Tank” star and financial expert Kevin O’Leary has some advice for homeowners: “The No. 1 debt you want to get rid of is pay off your mortgage,” he tells CNBC Make It. O’Leary says paying off your mortgage quickly is especially important for young people. Of course, you want to think about your personal situation to decide whether paying off your mortgage early is financially feasible. “The top of my hit parade list advice on debt is this: Don’t get any,” O’Leary says.
Kevin O’Leary shares his best advice about paying off your mortgage Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-17  Authors: sarah berger
Keywords: news, cnbc, companies, mortgage, shares, paying, advice, oleary, kevin, pay, important, deduction, dont, debt, best, tax


Kevin O'Leary shares his best advice about paying off your mortgage

“Shark Tank” star and financial expert Kevin O’Leary has some advice for homeowners: “The No. 1 debt you want to get rid of is pay off your mortgage,” he tells CNBC Make It.

A big reason to prioritize paying off your mortgage as soon as possible is the change in tax law for 2018 means “these days, you can’t write off as much as you used to,” says O’Leary.

The enactment of the Tax Cuts and Jobs Act (the sweeping tax overhaul that was signed into law in 2017 ), resulted in a significant drop in the number of homeowners who are able to benefit from a mortgage tax break. In April, CNBC reported only an estimated 13.8 million taxpayers will be able to claim the mortgage-interest deduction in 2018, a 57 percent drop from the over 32.3 million in 2017.

Though there are several reasons for that, a common problem is that the new law nearly doubled the standard deduction. That matters because mortgage interest is an itemized deduction — meaning in order to use it, the total of your itemized deductions needs to be more than the amount of the standard deduction. With the new much higher standard deduction, it makes way less sense for many people to itemize.

O’Leary says paying off your mortgage quickly is especially important for young people.

“Particularly if you’re starting out and you’ve just had your first child with your significant other, you want to pay off that mortgage. You want to get rid of that so you can start saving money and investing in your future,” he says.

To do so, “Think about getting mortgages that don’t have huge penalties to pay them off,” O’Leary advises. “Very often you can get [a mortgage] that after a year, you can start paying off the principal on an accelerated basis.”

O’Leary also says student debt is important to pay off.

“Those are the two big ones. You want to pay off that student loan, and you don’t want to get stuck in too big of a mortgage because you have to pay that one off too. Pay those off as fast as you can, and your savings will start,” he explains.

There is a caveat: It’s important to pay off whatever debt has the highest interest rate first, which is usually credit card debt, he says. But mortgages and student loans are also critically important to pay off because they’re larger sums, and often have extended terms. This means it’s easy to get comfortable, which can be dangerous, according to O’Leary.

“Life is unpredictable. What happens if you’re laid off or incur unexpected expenses elsewhere? Your once-manageable mortgage is suddenly going to seem not-so-manageable,” O’Leary previously told CNBC Make It.

Of course, you want to think about your personal situation to decide whether paying off your mortgage early is financially feasible. And you don’t want to forget about other important financial goals. For example, experts typically advise first contributing enough to your 401(k) to receive a company match, if one is available. Experts also emphasize the importance of creating an emergency savings fund of three to 12 months of expenses, depending on your situation.

O’Leary is famously known for advocating against debt (once even declaring that debt is evil). He emphasizes that his most important nugget of advice regarding debt boils down to one, simple concept.

“The top of my hit parade list advice on debt is this: Don’t get any,” O’Leary says. “In other words, don’t spend more than you have.”

Like this story? Subscribe to CNBC Make It on YouTube!

Don’t miss: ‘Shark Tank’ star Kevin O’Leary: Making this New Year’s resolution is the best thing you can do for your future

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.” This story has been updated.


Company: cnbc, Activity: cnbc, Date: 2019-01-17  Authors: sarah berger
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Dow futures near breakeven | May’s Brexit deal fails | More banks to report earnings

Futures were hovering near breakeven this morning as the market evaluated the impact of the failed Brexit vote. (CNBC)It’s a big morning for bank earnings, with Bank of America (BAC), Bank of New York Mellon (BK), Comerica (CMA), Goldman Sachs (GS), PNC Financial (PNC), and US Bancorp (USB) all set to report. After the bell reports today include CSX Corp. (CSX), H.B. The Labor Department will issue its December report on import and export prices at 8:30 a.m. (CNBC)The Federal Reserve issues its


Futures were hovering near breakeven this morning as the market evaluated the impact of the failed Brexit vote. (CNBC)It’s a big morning for bank earnings, with Bank of America (BAC), Bank of New York Mellon (BK), Comerica (CMA), Goldman Sachs (GS), PNC Financial (PNC), and US Bancorp (USB) all set to report. After the bell reports today include CSX Corp. (CSX), H.B. The Labor Department will issue its December report on import and export prices at 8:30 a.m. (CNBC)The Federal Reserve issues its
Dow futures near breakeven | May’s Brexit deal fails | More banks to report earnings Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: berkeley lovelace jr, peter schacknow
Keywords: news, cnbc, companies, morning, near, today, dow, bank, brexit, earnings, mortgage, futures, breakeven, deal, pnc, fails, vote, issues, reports, et, report, mays


Dow futures near breakeven | May's Brexit deal fails | More banks to report earnings

Futures were hovering near breakeven this morning as the market evaluated the impact of the failed Brexit vote. The Dow is sitting less than 200 points away from escaping correction. The three U.S. major averages are coming off their highest closes in more than a month. (CNBC)

* European markets higher after May’s Brexit vote defeat (CNBC)

U.K. Prime Minister Theresa May had placed a motion before lawmakers in the lower house of Parliament, asking them to rubber stamp her withdrawal agreement with the European Union. The bill was rejected by 432 votes to 202, thought to be the largest in U.K. political history. (CNBC)

It’s a big morning for bank earnings, with Bank of America (BAC), Bank of New York Mellon (BK), Comerica (CMA), Goldman Sachs (GS), PNC Financial (PNC), and US Bancorp (USB) all set to report. Asset manager BlackRock (BLK) and brokerage firm Charles Schwab (SCHW) will also issue quarterly numbers this morning. After the bell reports today include CSX Corp. (CSX), H.B. Fuller (FUL), and Kinder Morgan (KMI). (CNBC)

* BlackRock results fall short of expectations, assets fall back below $6 trillion (CNBC)

Two economic reports out today are housing-related: the Mortgage Bankers Association will be out with its weekly look at mortgage applications at 7 a.m. ET, while the National Association of Home Builders issues its monthly sentiment index at 10 a.m. ET. The Labor Department will issue its December report on import and export prices at 8:30 a.m. ET. (CNBC)

The Federal Reserve issues its Beige Book today, with its region-by-region assessment of the U.S. economy due out at 2 p.m. ET.


Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: berkeley lovelace jr, peter schacknow
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Homebuilder sentiment turns higher in January after mortgage rates drop

The downturn in mortgage interest rates that began in November finally has homebuilders feeling better. Builder sentiment rose 2 points to 58 in January on a monthly index from the National Association of Home Builders. This came after two months of sharp drops in sentiment to the lowest level in more than two years. “The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” said NAHB Chairman Randy Noel. The CEOs of KB Home and Lennar indicated that high prices


The downturn in mortgage interest rates that began in November finally has homebuilders feeling better. Builder sentiment rose 2 points to 58 in January on a monthly index from the National Association of Home Builders. This came after two months of sharp drops in sentiment to the lowest level in more than two years. “The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” said NAHB Chairman Randy Noel. The CEOs of KB Home and Lennar indicated that high prices
Homebuilder sentiment turns higher in January after mortgage rates drop Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: diana olick, daniel acker, bloomberg, getty images
Keywords: news, cnbc, companies, homebuilder, higher, nahb, turns, drop, sales, rose, housing, mortgage, builders, rates, prices, points, sentiment


Homebuilder sentiment turns higher in January after mortgage rates drop

The downturn in mortgage interest rates that began in November finally has homebuilders feeling better.

Builder sentiment rose 2 points to 58 in January on a monthly index from the National Association of Home Builders. This came after two months of sharp drops in sentiment to the lowest level in more than two years. The index stood at 72 last January. Anything above 50 is considered positive.

“The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” said NAHB Chairman Randy Noel. “Low unemployment, solid job growth and favorable demographics should support housing demand in the coming months.”

Of the index’s three components, current sales conditions rose 2 points to 63. Sales expectations over the next six months increased 3 points to 64 and buyer traffic through new home models rose 1 point to 44. Buyer traffic is the only component in negative territory.

Some of the nation’s largest public homebuilders reported weak quarterly earnings last week, indicating a slowdown in sales. The CEOs of KB Home and Lennar indicated that high prices had sidelined buyers, especially as mortgage rates rose in the early fall. Now that rates are lower, builders could see renewed demand.

Builders, however, are not lowering prices significantly. There remains a tight supply of homes for sale at the entry level because builders are unable to profit as much on lower-priced homes.

“Builders need to continue to manage rising construction costs to keep home prices affordable, particularly for young buyers at the entry-level of the market,” said NAHB chief economist Robert Dietz. “Lower interest rates that peaked around 5 percent in mid-November and have since fallen to just below 4.5 percent will help the housing market continue to grow at a modest clip as we enter the new year.”

Regionally, on a three-month running average, sentiment in the Northeast fell 5 points to 45. Sentiment in the Midwest and South both fell 3 points to 52 and 62, respectively, The West saw a 1-point drop to 67.

Monthly housing starts and builder permits will not be released Thursday, due to the partial government shutdown. The NAHB estimates that the December government data would show that single-family starts ended the year totaling 876,000 units, a 3 percent gain over the 2017 total of 848,900. The association noted that the slowdown in sales during the fourth quarter has left new home inventories elevated in some markets.


Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: diana olick, daniel acker, bloomberg, getty images
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Potential for foreclosure crisis because of climate change is real

A foreclosure crisis spurred by climate change is becoming a real threat to the mortgage industry as extreme storms and other natural disasters increasingly occur in places where borrowers might not have flood or fire insurance. “If we look at the basic foundation of what drives the mortgage market, it is the application of credit risk. What’s missing is the understanding of weather risk and where those weather events can take place,” Delgado said. The current system is reactive and local and do


A foreclosure crisis spurred by climate change is becoming a real threat to the mortgage industry as extreme storms and other natural disasters increasingly occur in places where borrowers might not have flood or fire insurance. “If we look at the basic foundation of what drives the mortgage market, it is the application of credit risk. What’s missing is the understanding of weather risk and where those weather events can take place,” Delgado said. The current system is reactive and local and do
Potential for foreclosure crisis because of climate change is real Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: diana olick, lisa rizzolo
Keywords: news, cnbc, companies, crisis, major, change, mortgage, foreclosure, market, homes, natural, climate, real, risk, potential, weather, borrowers, delgado, payments


Potential for foreclosure crisis because of climate change is real

A foreclosure crisis spurred by climate change is becoming a real threat to the mortgage industry as extreme storms and other natural disasters increasingly occur in places where borrowers might not have flood or fire insurance.

The industry is not prepared for the effects of such extreme weather and rising sea levels, according to Ed Delgado, CEO of national mortgage trade association the Five Star institute and a former executive at Freddie Mac.

“If we look at the basic foundation of what drives the mortgage market, it is the application of credit risk. What’s missing is the understanding of weather risk and where those weather events can take place,” Delgado said.

The current system is reactive and local and doesn’t include plans for the widespread effects of climate change. That could affect several major housing markets at once.

As it stands, after major natural disasters, mortgage servicers follow guidelines from Fannie Mae, Freddie Mac and the FHA, which own or insure most home loans today.

The guidelines usually involve a temporary moratorium on foreclosures, as well as loan forbearance programs, which allow borrowers to miss a few months of payments but then extend the length of the loan.

This helps borrowers who need to rebuild and may be waiting for insurance payments to repair damage. It also helps people who have lost their salaries temporarily due to a disaster. Again, these are momentary solutions to singular events.

The mortgage market is not factoring the overall risk into its loan underwriting and is not quantifying the amount of potential losses should a wide swath of borrowers walk away from damaged or destroyed homes.

“Whether it’s fires and mudslides in California, flooding in Texas, or tornadoes in the Oklahoma region,” Delgado said. “It’s going to be a problem if the banks don’t start to pay closer attention to what those weather risks are.”

As an example, Hurricane Harvey, which struck in August 2017, flooded close to 100,000 Houston-area homes. In Harvey’s federally declared disaster areas, 80 percent of the homes had no flood insurance, because they weren’t normally prone to flooding. Serious mortgage delinquencies on damaged homes jumped more than 200 percent, according to CoreLogic.


Company: cnbc, Activity: cnbc, Date: 2019-01-16  Authors: diana olick, lisa rizzolo
Keywords: news, cnbc, companies, crisis, major, change, mortgage, foreclosure, market, homes, natural, climate, real, risk, potential, weather, borrowers, delgado, payments


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Mortgage applications surge 13.5% as borrowers rush to take advantage of lower rates

Volume was 11 percent lower compared with one year ago, when mortgage rates were 42 basis points lower. Still, it is also important to note that a jump in mortgage rates last January caused mortgage demand to drop, so the annual comparisons are now off a lower volume. They may also be eager to take advantage of the dip in mortgage rates. Both Wells Fargo and J.P. Morgan reported lower mortgage origination volume in the last quarter, according to company earnings releases Tuesday. Simply put, ban


Volume was 11 percent lower compared with one year ago, when mortgage rates were 42 basis points lower. Still, it is also important to note that a jump in mortgage rates last January caused mortgage demand to drop, so the annual comparisons are now off a lower volume. They may also be eager to take advantage of the dip in mortgage rates. Both Wells Fargo and J.P. Morgan reported lower mortgage origination volume in the last quarter, according to company earnings releases Tuesday. Simply put, ban
Mortgage applications surge 13.5% as borrowers rush to take advantage of lower rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-15  Authors: diana olick, scott mlyn
Keywords: news, cnbc, companies, rush, applications, lower, 135, mortgage, rates, surge, borrowers, highest, market, advantage, level, spring, loans, volume, week


Mortgage applications surge 13.5% as borrowers rush to take advantage of lower rates

Mortgage demand continues to recover sharply, after ending last year in the basement.

Total mortgage application volume rose 13.5 percent last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

That is its highest level since February 2018 and came after a 23 percent jump the previous week. Volume was just 0.5 percent lower compared with the same week one year ago.

Refinance demand drove the gains, with those applications rising 19 percent for the week to the highest level since last March. Volume was 11 percent lower compared with one year ago, when mortgage rates were 42 basis points lower.

The drop in mortgage rates over the past two months has given new life to the refinance market. Still, it is also important to note that a jump in mortgage rates last January caused mortgage demand to drop, so the annual comparisons are now off a lower volume. Refinance volume is still historically low.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) remain unchanged at 4.74 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The rate has fallen 20 basis points in the past four weeks.

“Uncertainty regarding the government shutdown, slowing global growth, Brexit, a more patient Fed, and a volatile stock market continued to keep rates from increasing,” said Mike Fratantoni, MBA’s chief economist. “The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.”

Mortgage applications to purchase a home also rebounded 9 percent for the week to the highest level since April of 2010. Purchase volume was 11 percent higher compared with the same week one year ago. Buyers may be jumping in before the start of the usually competitive spring season. They may also be eager to take advantage of the dip in mortgage rates. More inventory came onto the market at the start of the year, and that may also be adding to activity.

The refinance share of mortgage activity increased to its highest level since January 2018, 46.8 percent of total applications, from 45.8 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to its highest level since October 2014, 9.2 percent of total applications. The average loan size for refinance applications reached a survey high at $353,100.

“Borrowers with larger loans tend to be more responsive to a given drop in mortgage rates, and we are seeing that so far in 2019,” Fratantoni said. “Furthermore, borrowers with jumbo loans are also more apt to take adjustable-rate mortgages as opposed to fixed-rate loans. Thus, it is not surprising to see the ARM share at its highest level since 2014. These borrowers may also feel more confident taking an adjustable-rate mortgage given the expectation of a more patient Fed.”

Although it is just one week’s read, the jump in purchase demand bodes well for the start of the spring market, indicating strong demand. High home prices were sidelining buyers last spring and higher mortgage rates last fall only exacerbated the weakness. Both Wells Fargo and J.P. Morgan reported lower mortgage origination volume in the last quarter, according to company earnings releases Tuesday.

“Home Lending revenue was down 8 percent, driven by lower net reduction revenue in a low volume highly competitive environment,” J.P. Morgan CFO Marianne Lake said in a prepared statement to analysts.

Simply put, banks are making less money on lower mortgage volume and less profitable loans.


Company: cnbc, Activity: cnbc, Date: 2019-01-15  Authors: diana olick, scott mlyn
Keywords: news, cnbc, companies, rush, applications, lower, 135, mortgage, rates, surge, borrowers, highest, market, advantage, level, spring, loans, volume, week


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One of the largest homebuilders said it can’t give a forecast because the market is so ‘uncertain’

The U.S. housing market has become so cloudy that Lennar says it can’t give investors guidance for 2019. The second biggest homebuilder in the country by market value, second only to D.R. While earnings doubled in the fourth quarter, the homebuilder has already felt the pressure from a slowdown in the housing market as the higher mortgage rates continue to weigh on buyer confidence. “We continued to experience slower sales due to higher home prices and rising mortgage rates. “Therefore we contin


The U.S. housing market has become so cloudy that Lennar says it can’t give investors guidance for 2019. The second biggest homebuilder in the country by market value, second only to D.R. While earnings doubled in the fourth quarter, the homebuilder has already felt the pressure from a slowdown in the housing market as the higher mortgage rates continue to weigh on buyer confidence. “We continued to experience slower sales due to higher home prices and rising mortgage rates. “Therefore we contin
One of the largest homebuilders said it can’t give a forecast because the market is so ‘uncertain’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-09  Authors: yun li, mark elias, bloomberg, getty images
Keywords: news, cnbc, companies, market, mortgage, housing, cant, earnings, largest, miller, lennar, continue, forecast, slower, homebuilders, uncertain, rates, higher


One of the largest homebuilders said it can't give a forecast because the market is so 'uncertain'

The U.S. housing market has become so cloudy that Lennar says it can’t give investors guidance for 2019.

The second biggest homebuilder in the country by market value, second only to D.R. Horton, reported strong fourth-quarter earnings on Wednesday, but the company could only scratch its head when it comes to the future.

“Due to continued softness and uncertainty at this seasonally slower time of year, we are deferring guidance for fiscal year 2019 until the markets further define themselves,” Lennar’s executive chairman Stuart Miller said in a press release.

While earnings doubled in the fourth quarter, the homebuilder has already felt the pressure from a slowdown in the housing market as the higher mortgage rates continue to weigh on buyer confidence. Home values in November 2018 were 5.1 percent higher compared with November 2017.

“We continued to experience slower sales due to higher home prices and rising mortgage rates. We continue to believe that the housing market is adjusting to a temporary disconnect between sales prices and buyer expectations and that the basic underlying fundamentals of low unemployment, higher wages and low inventory levels remain favorable,” Miller said in the release.

Lennar reported net earnings of $796.1 million in the fourth quarter, compared to $309.6 million in the prior year. Shares of Lennar are up more than 4 percent in Wednesday’s trading.

Some clarity for Lennar could be coming: New data out Wednesday showed mortgage applications jumped last week as prospective buyers were encouraged by a pullback in rates.

“As rates have started to ease, we have seen traffic pickup,” Miller said in an earnings call on Wednesday. “Therefore we continue to believe the market has taken a natural pause. It will adjust and re-calibrate and demand driven by fundamental economic strength will resume.”


Company: cnbc, Activity: cnbc, Date: 2019-01-09  Authors: yun li, mark elias, bloomberg, getty images
Keywords: news, cnbc, companies, market, mortgage, housing, cant, earnings, largest, miller, lennar, continue, forecast, slower, homebuilders, uncertain, rates, higher


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