|10 year government bond yield||0.58%|
|30 year fixed rate mortgage||2.98%|
Stocks are flattish as we await the Fed’s decision at 2:00 pm this afternoon. Bonds and MBS are up.
Mortgage Applications fell 0.8% last week as purchases declined 2% and and refis fell 0.4%. “Mortgage rates remained near record lows for conventional loans last week, and refinances in the conventional sector continued to slightly increase. However, rates on FHA loans rose, leading to an almost 18 percent drop in FHA refinances,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Homebuyers stepped back slightly, and there was a larger drop in purchase application volume for FHA, VA, and USDA loans. This trend, along with the fact that average loan sizes are increasing, indicate that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in COVID-19 cases, as well as the uncertainty on how the next round of government support will take shape.”
Quicken is looking to raise $3.8 billion from its IPO. It intends to sell $150 million shares to the public at $20 to $22 per share. The new shares will trade under the symbol RKT. No formal date for the IPO has been announced yet.
Home prices rose 4.5% annually in May, according to the Case-Shiller Home Price Index. Price increases declined compared to April, however. I suspect that home prices appreciation will re-accelerate in June as lower rates and higher demand push prices back up. Given what companies like Redfin are reporting, bidding wars are now commonplace, and non-contingent offers (without financing or inspections) are winning the day.
HUD is tightening requirements for self-employed borrowers and the use of rental income to qualify, effective immediately.
Consumer confidence fell in July after a big surge in June. Reports of new COVID flare-ups in California, Texas and Florida dampened sentiment. Interesting factoid: despite the unemployment rate and jobless claims, the percentage that think jobs are “plentiful” is higher than those that think jobs are “hard to get.” Not what you would normally expect with double-digit unemployment.
The homeownership rate increased to 67.9% in the second quarter, according to Census. This is the highest percentage rate since 2007. The jump is dramatic and I guess represents the urban renters fleeing to the suburbs. I wonder if there were data issues though and it might be revised downward later.