Morning Report: Home price appreciation continues its torrid pace

Vital Statistics:

 LastChange
S&P futures4,57618.2
Oil (WTI)84.110.31
10 year government bond yield 1.63%
30 year fixed rate mortgage 3.33%

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are flat.

Home Prices rose 18.5% YOY, according to the latest FHFA House Price Index. “Annual house price gains remained extremely high in August but the pace of month-over-month gains continues to decelerate,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “This does not mean house prices are at risk of declining—far from it, they continue to climb at a double-digit pace in all regions—but it does suggest we may have seen the peak in annual gains for the time being.”

Based on that home price appreciation gain, we should see 2022 conforming loan limits around $650k. Of course the FHFA might not increase it by that much. Next month’s report will be the one FHFA uses to set the new limit.

The share of loans in forbearance fell to 2.28% last week, according to the MBA. “Following two weeks of rapid declines, the share of loans in forbearance dropped again, but at a reduced rate. As reported in the past, many servicers process forbearance exits at the beginning of the month, therefore it is not surprising to see the pace of exits slow again mid-month,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The composition of loans in forbearance is evolving. More than 25% of loans in forbearance are now made up of new forbearance requests and re-entries, while many other homeowners who have reached the end of 18-month terms are successfully exiting into deferrals or modifications.”

Separately, Treasury distributed about $2.8 billion worth of rental aid in September. While the eviction moratoriums issued by the Center for Disease Control have expired, many states still prohibit foreclosures and evictions.

Author: Brent Nyitray

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

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