North Atlantic Mortgage Corp.   (877) 794-5363 John Sauro Rates At a Glance Mortgage Rates Currently Trending 7 Day Mortgage Rate Forecast This Week’s Potential Volatility Lower NEUTRAL High

This Weeks Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Lower

Sigma Research says that rates are trending slightly worse this morning.  Last week the MBS market improved by +19bps.  This was probably not enough to affect rates or  fees.  The market was extremely volatile last week.

This Week’s Rate Forecast: Neutral

Three Things: These are the three things to watch as they will be the driving forces in pricing this week: 1) Oil, 2) China, 3) ECB Meeting. Notice all three are events that are outside of the U.S. Domestically we have a very light week for economic data. However, we’ll want to keep an eye on existing home sales that is released Friday. Texas Tea, Black Gold: We start the week with Oil once again under pressure as Crude oil is down -0.48% as lower demand (China) and a glut of new supply is ready to hit the markets (Iran) is driving pricing lower. China: Their GDP data hit 6.9% which magically matched market expectations of 6.9%. This is a drop from 2014’s reading of 7.3%. Both steel and electrical power production fell in 2015 for the first time in decades. While the headline reading was designed/crafted to calm the markets, it is clear that traders simply aren’t buying it.

This Week’s Potential Volatility: High

According to Sigma Research the risk for volatility is high today and this week. No major economic news due out this week that is likely to move mortgage rates.  Oil continue to be the main driver of mortgage rates and as long as there’s a lot of uncertainty in that market, we’ll see mortgage rates make big moves.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional at North Atlantic to discuss it with them.

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

John Sauro
North Atlantic Mortgage Corp.
NMLS#: 42481
Phone: 914-764-3261

Email: johnsauro@gmail.com

Website: http://www.northatlanticmortgage.com/

It has now been 4 years that the Federal Reserve has been predicting inflation would “soon” move to 2.0%; 4 yrs of wishful thinking and 4 yrs that the Fed doesn’t understand. Once again expect Yellen to say 2.0% inflation will happen in 2016. The truth is, the Fed isn’t able to predict it as in history. Some believe the Fed’s models no longer are reliable since the economic crash in 2008. In a speech in Sept Yellen commented and acknowledged “significant uncertainty” about her prediction that inflation would rise. Conventional models, she said, have become “a subject of controversy.” Central banks praying for inflation to increase or wages won’t increase and the feeble economic growth and the tedious outlook will increasingly be questioned.

No news that this is a key week. The FOMC set to increase rates, the bank needs to do it for numerous reasons, the number one reason, so the Fed has room to lower the rate again if (when) the economy stumbles again. Markets today are not buying the Fed’s belief of continued growth, markets expect China’s economy to continue to weaken, the ECB is worried enough to continue buying €60B a month in stimulus moves. The Fed is saying Dec 2016 FF rate will be 1.375%, a rather astounding forecast; markets in the mean time looking for just 0.76%.

WASHINGTON, D.C. (December 9, 2015) – Mortgage applications increased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 4, 2015.

The refinance share of mortgage activity increased to 58.7 percent of total applications from 56.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.14 percent from 4.12 percent, with points decreasing to 0.43 from  0.50 (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) increased to 4.02 percent from 3.99 percent, with points increasing to 0.40 from 0.33 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.91 percent from 3.89 percent, with points decreasing to 0.43 from 0.49 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.39 percent from 3.36 percent, with points decreasing to 0.39 from 0.44 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 5/1 ARMs decreased to 2.98 percent from 3.11 percent, with points decreasing to 0.30 from 0.44 (including the origination fee) for 80 percent LTV loans.

WASHINGTON (November 23, 2015) — With mortgage rates remaining below 4 percent for the third straight month, existing-home sales in October were at a healthy pace but failed to keep up with September’s jump, according to the National Association of Realtors®. All four major regions saw no gains in sales in October.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4 percent to a seasonally adjusted annual rate of 5.36 million in October from 5.55 million in September. Despite last month’s decline, sales are still 3.9 percent above a year ago (5.16 million).

Lawrence Yun, NAR chief economist, says a sales cooldown in October was likely given the pullback in contract signings the last couple of months. “New and existing-home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,” he said. “Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales.”

Adds Yun, “As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago.”

October existing-home sales in the Northeast were at an annual rate of 760,000, unchanged from September and 8.6 percent above a year ago. The median price in the Northeast was $248,900, which is 1.3 percent above October 2014.

In the Midwest, existing-home sales declined 0.8 percent to an annual rate of 1.30 million in October, but are 8.3 percent above October 2014. The median price in the Midwest was $172,300, up 5.7 percent from a year ago.

Existing-home sales in the South decreased 3.2 percent to an annual rate of 2.14 million in October, but are still 0.5 percent above October 2014. The median price in the South was $188,800, up 6.2 percent from a year ago.

Existing-home sales in the West fell 8.7 percent to an annual rate of 1.16 million in October, but are still 2.7 percent above a year ago. The median price in the West was $319,000, which is 8.0 percent above October 2014.

Sources: WSJ, Teno, CNBC, Bloomberg

It will surprise no one if the US Federal Reserve increases rates at its December 16 meeting. So there’s no time to waste if your planning on buying or refinancing a home.

That fact appears to have been settled with the release of the minutes from the October Federal Open Market Committee meeting and a consistent series of comments and the accompanying theme from Fed speakers for the past month that the time is right for the first rate hike in the US in nine years.

But while the timing of the first move seems settled, there remains some debate about how far or how fast the Fed will be raising rates. Of course, Fed speakers recently have been at pains to signal that the moves will be data dependent.

Inevitably that means that with many and varied views about the path of the US economy in the year and years ahead, the magnitude of the Fed’s tightening cycle, or at least its speed, is still subject to some debate.

But that debate, and the uncertainty around it, makes a note released over the weekend by Goldman Sachs’ US chief economist Jan Hatzius and his team an important contribution to market thinking.

Hatzius and his colleagues characterize the US as undergoing a “Tortoise Recovery” but say that they expect the committee to raise the funds rate by 100 basis points next year, “or one hike per quarter.”

On the face of it, that seems a reasonable rate of tightening given where the employment market is in the US, the emerging wages cost pressures, and the lower potential growth rate. But Hatzius highlights the Goldman Sachs call of 100 points of tightening is “a fair amount above the 55-60bp pace priced into the bond market.”

That’s a risk for markets if they get a little spooked that the Fed will move faster than currently priced.

But Hatzius is quick to highlight he sees the risks to his forecasts as being to the downside. He also makes a compelling case for why the Fed has to move in the next two meetings, December or January, and why rates will continue to rise after that in a steady fashion.

First, he asks why the Fed will be hiking when there is “only moderate growth in the economy as a whole, stagnation in the industrial sector, and an uncertain global environment?”

The reason, he said:

Is that although the funds rate has been stuck at zero for seven years, a lot has happened “under the surface”. Exhibit 9 shows the federal funds rate and the policy prescriptions from a range of Taylor Rules. For several years after the recession, most standard policy rules said the FOMC should cut rates well below zero, if that were possible. Now, because of the cumulative progress the economy has made since 2009, even relatively cautious versions of the Taylor Rule call for raising the funds rate sometime soon. The rule that we think best describes Fed Chair Yellen’s views—which uses the U6 unemployment gap and a zero equilibrium funds rate — says the FOMC should hike at the December or January meeting, if taken literally. Thus, the same basic framework that has kept the Fed at zero — and that has guided our relatively dovish policy views — now suggests the process of normalization should begin.

Here’s the chart:

Goldman Sachs

So, the need for a rate hike is settled. But the vexed question for the market, the one that really matters in the year ahead, is the pace of Fed rate hikes.

Hatzius acknowledged that the Fed has, in various degrees has characterized the tightening cycle as “‘gradual,’ ‘shallow,’ ‘slow,’ ‘halting,’ and even crawling.'”

Again he refers to Fed modeling, or specifically a model built by San Francisco Fed president John Williams and Federal Reserve Board Monetary Affairs director Thomas Laubach.

It’s all a question of the “equilibrium funds rate” Hatzius says. The catch is, it’s not an observable benchmark and so it’s open to conjecture. But Hatzius gives traders a guide to what the Fed might do.

He says:

In practice we suspect the pace of rate hikes will be guided by three factors: (1) the extent to which inflation appears to be returning to target, (2) how financial conditions respond to the first few rate hikes, and (3) whether growth remains above trend.

Hatzius’ call that the Fed will increase rates at a 25 basis points per quarter rate still feels gradual. But because the Fed meets only every six weeks, it still implies a rate hike every other meeting.

Hatzius and Goldman have clearly placed their bets.

But, in a nod to the acute uncertainty that has pervaded markets in 2015, Hatzius adds the jury is still out and if “financial conditions tighten more than expected, if growth slows, or if inflation fails to rebound as expected, then the FOMC might delay further rate increases.”

Source: Business Insider

Markets continue to lean toward a Fed move next month. Interest rates have almost discounted the move with the recent increase in rates across the yield curve. All of our work technically remains bearish although we are looking for a little rebound, but it isn’t likely to be much.  Markets continuing to digest the strong employment report for Oct released last Friday. Investors and money managers torn; zero interest rates are manna for equities but an increase by the Fed next month may be testimony that the economy will continue to improve next year, adding to desires to buy equities. The same thoughts in the interest rate markets but reversed, a Fed move ostensively would imply the Fed isn’t worried about the global declines and that the level of inflation will begin to increase.

Will this be the last chance to refinance?

While many have refinanced into some of the lowest rates historically, there are still those who for what ever reason have yet to do so.  It’s hard to say if this is the end of low home loan rates, as there is much discrepency among economists as to the direction of the economy.  However, for those who don’t want to have regrets, its best to make a move now, before any run up takes place.  A quick phone call to my office at 877-794-5363 can help you determine how much you can save by refinancing.

WASHINGTON, D.C. (November 11, 2015) –  Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 6, 2015.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.12 percent, its highest level since August 2015, from 4.01 percent, with points decreasing to 0.45 from  0.47 (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) increased to 4.04 percent, its highest level since September 2015,  from 3.90 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.87 percent, its highest level since September 2015, from 3.81 percent, with points decreasing to 0.25 from 0.32 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.35 percent, its highest level since August 2015, from 3.24 percent, with points decreasing to 0.35 from 0.37 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 5/1 ARMs increased to 3.22 percent, its highest level since February 2015, from 3.12 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans.

WASHINGTON (October 22, 2015) — Existing–home sales rebounded strongly in September following August’s decline and have now increased year–over–year for 12 consecutive months, according to the National Association of Realtors®. All four major regions experienced sales gains in September.

Total existing–home sales¹, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, increased 4.7 percent to a seasonally adjusted annual rate of 5.55 million in September from a slightly downwardly revised 5.30 million in August, and are now 8.8 percent above a year ago (5.10 million).

Lawrence Yun, NAR chief economist, says a slight moderation in home prices in some markets and mortgage rates remaining below 4 percent gave more households the confidence to close on a home last month. “September home sales bounced back solidly after slowing in August and are now at their second highest pace since February 2007 (5.79 million),” he said. “While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace.”

The median existing–home price² for all housing types in September was $221,900, which is 6.1 percent above September 2014 ($209,100). September’s price increase marks the 43^rd consecutive month of year–over–year gains.

Total housing inventory³ at the end of September decreased 2.6 percent to 2.21 million existing homes available for sale, and is now 3.1 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.8–month supply at the current sales pace, down from 5.1 months in August.

“Despite persistent inventory shortages, the housing market has made great strides this year, backed by an increasing share of pent–up sellers realizing the increased equity they’ve gained from rising home prices and using it towards trading up or moving into a smaller home,” says Yun. “Unfortunately, first–time buyers are still failing to generate any meaningful traction this year.”

First–time buyers fell to 29 percent of sales in September after climbing to their highest share of the year in August (32 percent). A year ago, first–time buyers represented 29 percent of all buyers.

NAR President Chris Polychron, executive broker with 1^st Choice Realty in Hot Springs, Ark., says Realtors® strongly back the passing of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2015.” Polychron testified in support of the bill yesterdaybefore the U.S. House Financial Services Subcommittee on Housing and Insurance.

“This bill helps expand homeownership and rental housing opportunities at all levels and specifically includes changes to Federal Housing Administration policies that limit the flexible and affordable financing needed by many potential condo buyers — especially first–time buyers.”

All–cash sales rose to 24 percent of transactions in September (22 percent in August) and are unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in September, up from 12 percent in August but down from 14 percent a year ago. Sixty–seven percent of investors paid cash in September.

Sources: CNBC, Bloomberg, MBA, TBWS, NAR

New York, NY (October 15, 2015) – A soft opening in the bond and mortgage markets this morning after a strong rally yesterday. It was another knee jerk reaction for mortgage rates as the Mortgage Bond market increased 32 basis points, causing lenders to drop rates later in the day. This is the second time in two weeks that the market moved significantly intraday.  Is it possible these big swings in Bond prices resulting in lower rates will continue? Thats anyones guess. But one thing is for sure, the only way to lock into a rate when it drops intraday, is to be sure you’re working with a broker that monitors the market in real time and can help you take advantage of a momentary drop in rates. Most banks do not work in real time and price their rates once a day or once every few days.

WASHINGTON, D.C. (October 14, 2015) -The Mortgage Bankers Association Survey for the week ending October 9, 2015.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) remained unchanged at 3.89 percent, with points increasing to 0.41 from 0.25 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.20 percent from 3.24 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 5/1 ARMs increased to 3.00 percent from 2.96 percent, with points increasing to 0.46 from 0.32 (including the origination fee) for 80 percent LTV loans.

Next up for markets, the debt ceiling. Today reports out saying Treasury will run out of money on Nov 3rd, 2 days earlier than Jack Lew thought. Last March Congress set the debt limit at $18.1 trillion (that’s trillion). Since then, the Treasury has been using extraordinary measures, such as the suspension of certain pension investments, to conserve cash. After Nov 3rd Treasury will fund the government only with daily cash flow if the debt limit isn’t increased. the Bipartisan Policy Center estimates that the Treasury would run out of cash between Nov. 10 and Nov 19.

WASHINGTON (September 21, 2015) — Following three straight months of gains, existing–home sales dipped in August despite slowing price growth and a positive turnaround in the share of sales to first–time buyers, according to the National Association of Realtors®. None of the four major regions experienced sales increases in August.

Total existing–home sales¹, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a slight downward revision of 5.58 million in July. Despite last month’s decline, sales have risen year–over–year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).

Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. “Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers,” he said. “The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year.”

The median existing–home price² for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August’s price increase marks the 42^ndconsecutive month of year–over–year gains.

Total housing inventory³ at the end of August rose 1.3 percent to 2.29 million existing homes available for sale, but is 1.7 percent lower than a year ago (2.33 million). Unsold inventory is at a 5.2–month supply at the current sales pace, up from 4.9 months in July.

“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,” adds Yun.

The percent share of first–time buyers rebounded to 32 percent in August, up from 28 percent in July and matching the highest share of the year set in May. A year ago, first–time buyers represented 29 percent of all buyers.

According to Freddie Mac, the average commitment rate for a 30–year, conventional, fixed–rate mortgage declined to 3.91 percent in August after climbing above 4 percent in July (4.05 percent) for the first time since November 2014 (4.00 percent).

“When the Federal Reserve decides to lift short–term rates — likely later this year — the impact on mortgage rates and overall housing demand will likely not be pronounced,” says Yun. “With job growth holding steady, prospective buyers can handle any gradual rise in mortgage rates — especially if today’s stronger labor market finally leads to a boost in wages and homebuilding accelerates to alleviate supply shortages and slow price growth in some markets.”

NAR released a study earlier this month that examined new home construction in relation to job gains. The findings revealed that homebuilding activity is currently insufficient in a majority of metro areas and is contributing to the ongoing housing shortages and unhealthy price growth in many markets.

Properties typically stayed on the market for 47 days in August, an increase from 42 days in July but below the 53 days in August 2014. Short sales were on the market the longest at a median of 124 days in August, while foreclosures sold in 66 days and non–distressed homes took 45 days. Forty percent of homes sold in August were on the market for less than a month.

All–cash sales decreased slightly to 22 percent of transactions in August (23 percent in July) and are down from 23 percent a year ago. Individual investors, who account for many cash sales, purchased 12 percent of homes in August, down from 13 percent in July and unchanged from a year ago. Sixty percent of investors paid cash in August.

Matching the lowest share since NAR began tracking in October 2008, distressed sales⁴— foreclosures and short sales — remained at 7 percent in August for the second consecutive month; they were 8 percent a year ago. Five percent of August sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in August (17 percent in July), while short sales were discounted 12 percent (unchanged from July).

NAR President Chris Polychron, executive broker with 1^st Choice Realty in Hot Springs, Ark., says Realtors® worked hard over the summer to prepare for the Oct. 3 implementation of Know Before You Owe, also known as the TILA–RESPA Integrated Disclosure rule. “A large majority of Realtors® have taken some form of training⁵ to prepare for the new disclosure requirements,” he said. “As the ruling goes into effect next month, communication is crucial between all parties involved in a real estate transaction to ensure consumers get to closing seamlessly and without delay. NAR will monitor the progress of the rule in the weeks ahead and will share any concerns that arise as part of our continued partnership with the Consumer Financial Protection Bureau.”

Sources: CNBC, Bloomberg, NAR, MBA, TBWS

Mortgage rates had a wild day Friday.  If you were checking rates on Friday, it’s important to understand just how immense the swings have been.  Let’s start with the good news.  The average conventional 30yr fixed rate quote thundered to its best levels in more than 5 months Friday morning, making it easily to 3.75% for almost any lender and even as low as 3.625% for quite a few lenders. This, after the big jobs report came in significantly weaker than expected.

The bad news is that the afternoon saw a fairly substantial reversal in the bond markets that underlie mortgage rates.  When those trading levels begin losing ground, mortgage lenders are increasingly at risk of recalling rate sheets and sending out new, higher rates (aka “mid day reprice”).  By the early afternoon, most lenders had pulled back their earlier, more aggressive offerings, leaving us with rates that are still better than the day prior, but not nearly as low as Friday morning’s.

The fact remains that the jobs report provided a compelling negative argument against a Fed rate hike and against general economic growth itself.  Without a strong growth outlook, it will be hard for longer term rates to move higher, no matter what the Fed does with short term rates.  There can still be plenty of volatility in the near-term though.  That makes today’s 5-month lows yet another good opportunity to lock for those that aren’t interested in wading through the volatility.  Doing so could prove beneficial, but only at the risk of being forced to accept a higher payment or fees if markets move against you.  In general, the less time you have and the less flexibility on payment/costs, the more it makes sense to lock.

WASHINGTON (September 28, 2015) — Pending home sales retreated in August but remained at a healthy level of activity and have now risen year–over–year for 12 consecutive months, according to the National Association of Realtors®. A modest increase in the West was offset by declines in all other regions.

The Pending Home Sales Index,* a forward–looking indicator based on contract signings, decreased 1.4 percent to 109.4 in August from 110.9 in July but is still 6.1 percent above August 2014 (103.1).

Lawrence Yun, NAR chief economist, says even with the modest decline in contract signings, demand continues to outpace housing supply and elevate price growth in numerous markets. “Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” he said. “Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”

According to Yun, sales in the coming months should be able to roughly maintain their current pace. However, he warns that there are looming speed bumps that have the potential to impact housing.

“The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being,” adds Yun. “Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales.”

The national median existing–home price is expected to increase 5.8 percent in 2015 to $220,300. Yun forecasts total existing–home sales this year to increase 7.0 percent to around 5.28 million, about 25 percent below the prior peak set in 2005 (7.08 million).

The PHSI in the Northeast fell 5.6 percent to 93.3 in August, but is still 8.9 percent above a year ago. In the Midwest the index inched down 0.4 percent to 107.4 in August, and is now 6.5 percent above August 2014.

Pending home sales in the South declined 2.2 percent to an index of 121.5 in August but are still 4.1 percent above last August. The index in the West rose 1.8 percent in August to 104.9, and is now 7.6 percent above a year ago.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Sources: CNBC,Bloomberg, NAR, MND

John Sauro speaks with Kathleen Hays on 

“The Hays Advantage” Show on

Bloomberg Radio today Wednesday July 22 at 3:05 pm EST

Listen online here

http://www.bloomberg.com/radio/

or at

1130 on AM Radio

Tune into Bloomberg Radio to listen to Kathleen Hays and John Sauro, President of North Atlantic Mortgage Corp. discuss the state of interest rate & real estate markets.

WASHINGTON, D.C. (June 24, 2015) – Mortgage applications increased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 19, 2015.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.19 percent from 4.22 percent, with points decreasing to 0.38 from 0.46 (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 4.14 percent from 4.18 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.38 percent from 3.43 percent, with points increasing to 0.37 from 0.33 (including the origination fee) for 80 percent LTV loans.

Interest rates doing nicely this morning but still the 10 yr note based on our work remain in a bearish pattern.The volatility is extreme but within a wide range with no trend, the 10 yr 2.50% to 2.30%. This morning early the 10 yield dropped to 2.33% frm 2.48% on Friday; up 7 bps on Friday and down 15 bps this morning; last week the yield ncreased 22 bps, this morning half of that has been recovered. . Mortgage rates in an even tighter yield range with no significant change in rates for the last three weeks. US equity markets following the rest of the world lower this morning; Greece of course but also China’s markets continue to fall and now in bearish status.

Fed’s Dudley: September rate rise ‘very much in play’ amid stronger data

A Federal Reserve interest-rate hike will be “very much in play” at the central bank’s September meeting if the recent strengthening of the US economy continues, according to one of America’s top central bankers.

William Dudley, the president of the Reserve Bank of New York, said recent evidence of accelerating wage gains, improving incomes, and growing household spending had alleviated some of his concerns about the sustainability of momentum in America’s jobs market. read more

Housing News

Pending home sales rise 0.9% in May, highest level since 2006

A sharp jump in interest rates may have deterred some home buyers in May. Signed contracts to buy existing homes, so-called pending home sales, rose just 0.9 percent in May from April, according to the National Association of Realtors, after a downward revision to April’s reading. That is slightly lower than analysts predicted, but is still the highest level on the association’s index since April of 2006. Pending sales are now 10.4 percent higher than one year ago. Watch

Economic News

You know by now that Greece has closed its banks this week after creditors finally rejected Greek proposals.

Talk of a Greek referendum vote on whether to take creditors’ proposals or leave the EU. Europe’s stock markets under pressure, the Dow Jones opened down 151 points and there is a push into US treasuries. Tomorrow Greece will default on its payment to the IMF. Greece has destabilized Europe and global markets for months, nothing that happens there should be a surprise either way Greece may go. Concerns are that the debt crisis will spread to Portugal and Spain. The Greek referendum is scheduled for July 5th as of the moment.

Mortgage rates were at their highest levels since early October as of yesterday afternoon, and in general, have been in the throes of the most aggressive move higher since the 2013 taper tantrum.  Much of the motivation has come from European markets.  There is a domino effect, of sorts, leading from extremely large moves in Europe that ends up visibly affecting mortgage rates in the US.  As such, it’s no surprise to  see that benchmark interest rates in Europe were at their long-term highs yesterday as well.  It’s also no surprise that when the pendulum swung the other way in Europe this morning, US interest rates were able to come along for the ride.

As is always the case when Europe is leading a market movement, US rates get a lesser version of the improvements.  Fortunately, today was so big that the improvements were noticeable.  Many lenders moved back to quoting conventional 30yr fixed rates at 4.125% as opposed to the recently more prevalent 4.25%.  For borrowers whose contract rate remained the same, closing costs would be significantly lower today.  In some cases as much as half a point lower (meaning $500 for every $100k financed).

Unfortunately, due to the fact that we were at the weakest levels of the year only yesterday, it’s way too soon to assume that the good times will continue to roll.  In fact, we could have several more days like today and remain very much at risk of a longer term move toward even higher rates.  It’s still safer to plan for that risk as opposed to an opportunity that has yet to materialize.

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Housing News

WASHINGTON, D.C. (June 11, 2015) -The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 459,000 units in May 2015, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

“Mortgage applications to homebuilders declined in May following an improved start to the year. Consistent with the intent to complete new homes in time for the school year, applications fell at a similar rate between April and May last year. That said, application volume is 15% percent ahead of the same month last year,” said Lynn Fisher, MBA’s Vice President of Research and Economics.

The seasonally adjusted estimate for May is a decrease of 5.7 percent from the April pace of 487,000 units. On an unadjusted basis, the MBA estimates that there were 45,000 new home sales in May 2015, a decrease of 6.3 percent from 48,000 new home sales in April.

MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. Utilizing this data, as well as data from other sources, MBA is able to provide an early estimate of new home sales volumes at the national, state, and metro level. This data also provides information regarding the types of loans used by new home buyers. Official new home sales estimates are conducted by the Census Bureau on a monthly basis. In that data, new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

Sources MND, CNBC, Bloomberg, MBA