Mortgage Rates dropped as Mortgage Bonds successfully broke above resistance at the 50, 100 and closed just above the 200-day Moving Average. Investing dollars fled to the safe haven of the Bond markets today aided by a plunge in Stock prices both here in the States and abroad. The push lower was sparked by declining emerging markets, which fueled a worldwide sell-off. The 4% Mortgage Bond closed at 104.47 up 41bp.
Many say a correction in the Stock Market is long over due. Further decline in Stock Prices, can push Mortgage Rates back down to historical lows. Hence, creating opportunities for the housing market and those who missed refinancing the last time rates were low.
The Dow fell 318.24 points to 15,879.11, the S&P 500 fell 38.17 points to 1,790.29, the Nasdaq dropping 90.71 points to end the week at 4,128.17. Next week the FOMC meeting will be front and center with the monetary policy statement being released on Wednesday at 2:00pm ET.
Weekly Survey of Rates from the Mortgage Bankers Association
Mortgage loan application volume, increased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 15 percent lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.57 percent, the lowest level since November 2013, from 4.66 percent, with points increasing to 0.36 from 0.33 (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 4.57 percent, the lowest level since November 2013, from 4.58 percent, with points decreasing to 0.18 from 0.24 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.68 percent, the lowest level since December 2013, from 3.72 percent, with points decreasing to 0.29 from 0.37 (including the origination fee) for 80 percent LTV loans.
Housing News
Existing Home Sales Rebound
The National Association of Realtors reported today that Existing Home Sales rose by 1% from November to December to an annual rate of 4.87M units, which was the first monthly gain in three months. For all of 2013, there were 5.09 million sales, which was 9.1% higher than 2012.
The Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and gives breakdowns for the West, Midwest, South and Northeast regions of the country. These figures include condos and co-ops, in addition to single-family homes. Current sales rates, actual totals and median prices by month going back 12 months.
The most overvalued housing market in America
Fitch: Here’s also what rising mortgage rates will do to home prices
Housing markets gaining high self-esteem from juiced up home prices may be at risk in 2014 if those dramatic price swings are not supported by economic fundamentals. Housing markets resting on the laurels of juiced up home prices may be at risk in 2014 if those dramatic price swings are not supported by economic fundamentals.
And while Fitch Ratings expects most of the U.S. to experience modest and slow home price appreciation in 2014, a few markets have the research firm’s bubble radar going off, according to Rui Pereira, managing director of structured finance for the ratings giant. Read more
Economic News
US claims inch up, suggesting gradual labor thaw
The number of Americans filing new claims for unemployment rose marginally last week, but the underlying trend suggested the labor market continued to steadily improve. Initial claims for state unemployment benefits ticked up 1,000 to a seasonally adjusted 326,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 fewer applications received than previously reported. Economists polled by Reuters had expected first-time applications for jobless benefits to hold steady at 326,000 in the week ended Jan. 18. Read more
U.S. Manufacturing Purchasing Managers Index dipped to 53.7 from December’s reading of 55.0. Economists polled by Reuters expected no change.
Sources: CNBC, Bloomberg, MMG, Housingwire, MBA