Morning Report: Q4 delinquencies fall to a 40 year low

Vital Statistics:

 

Last Change
S&P futures 3371 13.25
Oil (WTI) 51.06 1.12
10 year government bond yield 1.62%
30 year fixed rate mortgage 3.67%

 

Stocks are higher this morning after China expressed optimism on economic growth. Bonds and MBS are down small.

 

Jerome Powell continues his Humphrey-Hawkins testimony today. Here were his prepared remarks from yesterday. There was really nothing new in them – the economy is growing moderately, but due to concerns about global growth the Fed cut rates.

 

Mortgage Applications rose 1.1% last week as purchases decreased 6% and refis increased 5%. “The mortgage market continues to be active in early 2020, as applications increased for the third straight week,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Rates also rose, but still remained close to their lowest levels since October 2016. The refinance index climbed to its highest level since June 2013, and refinance loan sizes also increased as a result of an active jumbo lending market.”

 

Mortgage delinquency rates in the fourth quarter fell to the lowest in 40 years, according to the MBA. The delinquency rate for one-to-four unit properties fell to a seasonally adjusted rate of 3.77% of all loans outstanding, which was down 20 bps from Q3 and 29 bps from a year ago. “The mortgage delinquency rate in the final three months of 2019 fell to its lowest level since the current survey series began in 1979,” said Marina Walsh, MBA Vice President of Industry Analysis. “Mortgage delinquencies track closely to the U.S. unemployment rate, and with unemployment at historic lows, it’s no surprise to see so many households paying their mortgage on time.”

 

Job openings fell in December, according to the JOLTS report. The quits rate (which tends to lead wage growth) was unchanged.

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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