We will continue to float Mortgage Rates into next week , but be prepared to lock ahead of next Friday’s Jobs Report. Mortgage Bond Prices took a breather Friday from their recent run higher closing slightly lower due to a mixed bag of economic data this morning. The Bond fell by just 6bp to end the session at 104.81 and near the upper end of Friday’s range. Remember Mortgage Rates move opposite Bond Prices.
Stocks had a seesaw day, trading positive, then negative and back to positive by day’s end. The Dow rose by 49.06 points to 16,321.71, the S&P 500 finished at 1,859.45 while the Nasdaq closed lower by 10.81 points to end the trading week at 4,308.11. Oil was last seen at $102.45/barrel near unchanged. Next week, the government will release the February Jobs Report where
it is expected that employers added 163K workers.
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) increased to 4.53 percent, the highest rate since week ending January 17, 2014, from 4.50 percent, with points increasing to 0.31 from 0.26 (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 4.47 percent, the highest rate since week ending January 24, 2014, from 4.45 percent, with points increasing to 0.13 from 0.11 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.56 percent, the highest rate since week ending January 24, 2014, from 3.55 percent, with points decreasing to 0.28 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Commercial Real Estate Lending
After three years of momentum building in commercial property lending, analysts are projecting that institutional lenders will place what could be record amounts of capital into commercial real estate in 2014. Commercial Mortgage backed Securities (CMBS) – The 10 Yr Swap rate move down from 2.80% earlier in the week to finish the week at 2.728%.
Commercial property lending is fundamentally strong, and lenders still maintain disciplined underwriting standards, according to comments by Jones Lang LaSalle (JLL) executives attending the Mortgage Bankers Association’s Commercial Real Estate Finance/Multifamily Housing Convention on Feb.3, 2014. At the same time, they said, fundamentals in the real estate market are improving due to growth in housing markets, construction, industrial production and improved consumer sentiment. Read more
Housing News
Home Prices in 2013 Post Biggest Annual Gain Since 2005 -S&P Case-Shiller
Home prices posted their largest annual gain last year since 2005, according to a report released Tuesday, amid a frenzy of sales activity, low mortgage rates, and reduced inventories during the first half of the year. U.S. prices increased 11.3% in the fourth quarter compared to a year earlier, according to the S&P/Case-Shiller price index. An index that measures home prices in 20 major metro areas rose 13.4%. But there are growing signs that, amid a slowdown in sales activity that began last fall, the pace of price gains could soon moderate. Read more
Toll Brothers revenue surges as home selling prices jump – the largest U.S. luxury home builder reported a 52% increase in quarterly revenues.
Upside Surprise for New Home Sales
Despite the harsh weather last month, New Home Sales rose by 9.6% from December to January to an annual rate of 468,000, well above the 400,000 expected. The 468,000 was the highest level since July of 2008 and eases concerns of a housing slowdown.
US pending home sales up 0.1% in January vs. 2.0% estimate
Amid harsh weather that battered much of the U.S., signed contracts to buy existing homes held steady last month, according to the National Association of Realtors. The nearly-flat reading caught economists by surprise. Pending home sales edged up 0.1 percent to 95.0 in January, disappointing analysts who had expected sales to gain 2.0 percent, according to a consensus estimate from Reuters. Read more
Economic News
Unemployment Claims Spike
The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the underlying trend suggested no shift in labor market conditions. Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 348,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 2,000 fewer applications received than previously reported.
Economists polled by Reuters had forecast first-time applications for jobless benefits slipping to 335,000 in the week ended Feb. 22, which included the Presidents Day holiday. While last week’s increase pushed them to the upper end of their range so far this year, it probably does not signal labor market weakness as claims tend to be volatile around federal holidays. Read more
Consumer Confidence dips to 78.1 in February, versus 80 estimate. The January Consumer Confidence Index was revised to 79.4 from 80.7.
U.S. gross domestic product growth in the fourth quarter was lowered to 2.4 percent. GDP had been expected to be lowered to a 2.4 percent annual rate, according to a Reuters poll of economists. That would be down sharply from the 3.2 percent pace reported last month and the 4.1 percent logged in the third quarter.
The February Chicago Purchasing Managers’ Index, a gauge of regional manufacturing activity, came in at 59.8. Chicago PMI had been expected to come in at 57.0, following the prior month’s 59.6. A reading above 50.0 indicates expansion in the sector.
Sources: CNBC, Bloomberg, MMG, Housingwire, KCM, Reuters, WSJ, NAR