Mortgage Bond Prices have improved since Washington ended the threat of a shut down. Interest rates continue to fall as Bond Prices rise. Mortgage Bond prices are up – $105.12, only $1.97 away from their high of 107.09 on April 30th and has gained back $3.49 since the multi year low hit back on September 5th. This is Great News for Mortgage Rates. Headed into the weekend, we recommend locking into Mortgage Rates as Mortgage Bonds retreated from resistance at their 200-day Moving Average. As always, things can change quickly, so don’t procrastinate.
Stocks had a decent day – the Dow was up 28 points to 15,399.65, the S&P rose by 11.35 points to 1,744.50 (record close) while
the Nasdaq gained 51.13 points to end the week at 3,914.27. Oil was last seen at $100.89/barrel also near unchanged levels.
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 4.46 percent from 4.42 percent, with points decreasing to 0.31 from 0.44 (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 4.51 percent from 4.45 percent, with points decreasing to 0.15 from 0.21 (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 4.16 percent from 4.15 percent, with points increasing to 0.44 from 0.37 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 5/1 ARMs remained unchanged at 3.25 percent, with points increasing to 0.32 from 0.29 (including the origination fee) for 80 percent LTV loans.
Housing News
Is the Housing market Making a Major Shift?
The real estate market has been one of the strongest pillars of the economy following the greatest financial downturn since the Great Depression. Amid low interest rates and a great deal of intervention from policymakers, home buyers received an added incentive to purchase a home. Meanwhile, sellers enjoyed low inventory levels and rising prices. However, a new survey finds that sellers might be losing their control on the market. Read more
Homeowners Impact on Net Worth
Over the last five years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth. A recent study by the Federal Reserve formally answered this question.
Some of the findings revealed in their report:
- The average American family has a net worth of $77,300
- Of that net worth, 61.4% ($47,500) of it is in home equity
- A homeowner’s net worth is over thirty times greater than that of a renter
- The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100
Bottom Line
The Fed study found that homeownership is still a great way for a family to build wealth in America.
Economic News
Crisis Averted: Congress Strikes a Debt Limit Deal
After the partisan passions and heated rhetoric, the disruptions of a government shutdown and displays of dysfunction, Congress did what it could have done weeks ago: voted to fund the government and lift the debt limit. Read more
Jobless Claims
Weekly claims for state unemployment benefits totaled 358,000. Economists had expected initial jobless claims to drop to 330,000. Read more
U.S. Home Builder Sentiment Slips in October – NAHB
U.S. homebuilder sentiment slipped slightly in October on policy gridlock in Washington and higher labor costs, the National Association of Home Builders said on Wednesday. The NAHB Housing Market Index dropped to 55 in October, the lowest since June, the group said in a statement. The September reading was initially reported at 58 but was revised lower to 57 on Wednesday. Read more
Manufacturing
Manufacturing activity in the New York region slowed in October, according to the Empire State Survey. The reading came in at 1.52, while economists had expected a reading of 6.0, down from the prior reading of 6.29.
Sources: CNBC, Housingwire, MMG, KCM, Reuters, MBA, Bloomberg, USA Today