Archives for February 2016

Mortgage applications decline mid February 2016

As mortgage rates moved up just a bit; mortgage applications fell…declining over 4% mid February 2016 compared to earlier in the month according to the Mortgage Bankers Association.  The move in mortgage rates was not significant so it’s not exactly clear if it caused the slow down in mortgage application and reduced loan volume.  Refinance mortgage volume slowed the most; declining 8% and purchase applications increased slightly.  Purchase volume is less rate sensitive than refinance loan volume.  The average mortgage rate remained below 4.00% and since the beginning of the year mortgage rates have been aggressive considering the volatility in the bond market.

Subprime mortgage volume on the rise

Subprime mortgage volume has increased recently however the types of Subprime mortgage loans being funded now are not the same type of Subprime mortgage loans funded prior to 2008.  Based on the information provided by Equifax and their National Consumer Credit Trends Report (which places a Subprime label on a borrower if they have a 620 credit score or below), Subprime mortgage volume increased from January 2015 to October 2015 – 312,000 new mortgage loans were originated with a total volume of $50.7 billion.  That’s nearly a 45% increase compared to the same period in 2014.

The biggest difference between these Subprime mortgage loans and the Subprime mortgage loans pre-2008 is the lenders underwriting standards for the new mortgage loan.  Pre-2008 lenders rarely if ever verified income with employers and he IRS however today it generally happens on every file; especially those with sub 620 FICO scores.  Another area that makes these Subprime mortgage loans different is the lenders appraisal standards and background checks lenders complete when they receive a new mortgage application.

MND West Leads Nation with Double Digit Price Increases

Per Jann Swanson of Mortgage News Daily:

Once again a report on home price changes indicates that appreciation has not yet slowed. CoreLogic issued a report on its Home Price Index for December of Tuesday which indicates a pick-up in monthly increases.

The index shows prices nationwide, including distressed sales, rose 0.8 percent from November to December compared to a 0.5 percent change from October to November. On an annual basis there was a 6.3 percent gain, the same as the November 2014 to November 2015 pace.

“Nationally, home prices have been rising at a 5 to 6 percent annual rate for more than a year,” said Dr. Frank Nothaft, chief economist for CoreLogic. “However, local-market growth can vary substantially from that. Some metropolitan areas have had double-digit appreciation, such as Denver and Naples, Florida, while others have had price declines, like New Orleans and Rochester, New York.”

Among the states the highest annual appreciation was again in Colorado at 10.4 percent followed by two other western states, Washington and Oregon at 10.3 and 9.1 percent respectively. Three states posted declines; Louisiana (2.9 percent), Mississippi (2.8 percent), and New Mexico (0.1 percent).

Among large metropolitan areas the largest annual increases were scored by San Francisco at 12.6 and Denver at 11.4 percent.

The CoreLogic HPI Forecast indicates that home prices will increase by 5.4 percent on a year-over-year basis from December 2015 to December 2016, and on a month-over-month basis home prices are expected to increase 0.2 percent from December 2015 to January 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Higher property valuations appear to be driving up single-family construction as we head into the spring. Additional housing stock, especially in urban centers on the coasts such as San Francisco, could help to temper home price growth in the longer term,” said Anand Nallathambi, president and CEO of CoreLogic. “In the short and medium term, local markets with strong employment growth are likely to experience a continued rise in home sales and price growth well above the U.S. average.”

Article at Mortgage News Daily

MPA Urban homes outpacing suburbs in most major metros

MPA’s Steve Randall:

Urban homes outpacing suburbs in most major metros
Most top-tier metros are seeing urban homes outpacing those in the suburbs according to a new report from Zillow. While the American Dream of a home in the suburbs is still maintaining higher prices in many areas, city living is hot in Boston, Washington DC and San Francisco with the mean value of urban homes beating those in suburban areas. Downtown Denver, Phoenix and Chicago are not far away from higher-than-suburb prices.

“This trend, in part, reflects home buyers’ changing preferences, as they seek amenity-rich, dense and walkable areas that are often closer to their workplace,” said Zillow Chief Economist Dr. Svenja Gudell. “In the future, this lifestyle trend will change some suburbs as we know them, and they’ll start to feel more urban as buyers move further from city centers in search of affordable housing in communities that still feel urban.”

Nationally, suburban home values grew 5.9 per cent in 2015, while urban homes gained 7.5 per cent.

Article from Mortgage Professional America