After Friday’s fireworks supplied by the Jobs Report, we will float, not lock Mortgage Rates into the new week as Mortgage Bonds seems to have found support at the 200-day Moving Average.
The better than expected jobs data pushed Mortgage Bonds considerably lower Friday morning, but they did manage to cut some of the losses before the close of trading. The Mortgage Bond closed down 25bp to end the session at 104.16. The Dow finished at 16.452.72 up 30.83 points, the S&P 500 gained 1.01 points to end at 1,878.04, another record close. The Nasdaq fell by 15.90 points to end at 4,336.22. Oil was last seen at $102.55/barrel up 96 cents.
Weekly Survey of Rates from the Mortgage Bankers Association
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.47 percent from 4.53 percent, with points decreasing to 0.28 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.37 percent from 4.47 percent, with points increasing to 0.20 from 0.13 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.52 percent from 3.56 percent, with points decreasing to 0.18 from 0.28 (including the origination fee) for 80 percent LTV loans.
Commercial Real Estate Lending
Commercial Mortgage backed Securities (CMBS) – The 10 Yr Swap rate moved higher to finish the week at 2.871%.
Housing News
Home Prices Continue to Rise
CoreLogic reported that home prices, including distressed sales, rose by 12.02% in January 2014 compared to January 2013. January marks the 23rd consecutive month of year-over-year prices gains. The 12.02% year-over-year gain in January is up from the 11.02% rise recorded from December 2012 to December 2013. In addition, prices increased 0.9% month-over-month from December to January.
Kiplingers– The housing recovery will remain somewhat spottyin the months ahead. Mass., N.Y., Md., W.Va., Minn., Iowa, the Dakotas, Neb., Texas,
Colo., Utah and Mont…plus Washington, D.C., the median home price now matches or fell…
that much.) By the end of the year, Vt., Pa., Va., N.C., Tenn., Ky., Ind., Kan., Ark. ll take till 2016 or so before that benchmark is hit in Fla., Ariz. and Nev., states where the median is still 20% below the 2007 level.
By Jan. 1, 2015: 8 million home mortgagors still underwater, owing more on their loans than their properties are worth. With price gains slowing to 4%-4.5% on average this year, fewer mortgages will be pulled out of the depths than in 2013, when home values gained an average of 11% nationwide. Nearly 10 million borrowers…
representing 19% of all mortgaged homes…are trapped by such circumstances now.
Economic News
Surprise Rise in February Job Creation
Despite the harsh winter weather, employers created more jobs than expected in February. The Labor Department reported that Non-farm Payrolls rose by 175,000 last month, above the 163,000 expected. This was the largest gain in three months.
New orders for U.S. factory goods fell 0.7 percent in January, slightly more than the 0.5 percent drop that was expected. It’s another sign of slowing manufacturing activity.
The European Central Bank left its benchmark interest rate unchanged at 0.25%, euro briefly rises to session high
In its latest report on economic conditions around the country, the Federal Reserve said the effects of severe winter weather can be seen throughout the U.S. economy. Despite those headwinds, the economy continues to expand, with eight Fed districts showing improvement.
Sources: CNBC, Bloomberg, Kiplingers, Housingwire, MMG