|10 year government bond yield||1.09%|
|30 year fixed rate mortgage||2.86%|
Stocks are lower this morning as earnings continue to come in. Bonds and MBS are up.
Delinquencies fell in December to 6.08%, the lowest level since April, according to Black Knight Financial Services. This is down 3.9% compared to November, but is up 78% on a YOY basis.
The MBA is requesting a $25 billion housing assistance fund. “We are requesting that you include a $25 billion Housing Assistance Fund, modeled on the Hardest Hit Fund, to provide funds to state housing finance agencies to help homeowners with COVID-19 hardships bring their mortgage loans current through targeted assistance,” the letter said. “The funds would be used for mortgage payment assistance, utility payments, property tax assessments and other support to prevent eviction, mortgage delinquency, default, foreclosure or loss of utility services.”
Flagstar reported fourth quarter earnings numbers that revealed that gain on sale margins are beginning to compress. “Our mortgage team continues to deliver, achieving revenues of $232 million for the quarter. While gain on sale margins did compress, we were pleased with how well they held up, finishing at 1.93 percent for the quarter. The team’s all-out efforts—coupled with our diverse, multi-channel mortgage platform—made it possible for us to deliver a quality experience to customers all year long in the face of unprecedented volumes. It will be interesting to see if this margin compression continues through 2021.
United Wholesale completed its merger with the Gores SPAC and should begin trading today under the new ticker UWMC. Third quarter originations were $54 billion for the company.
The three hottest real estate markets are Austin TX, Phoenix, and Nashville. The coldest are New York, San Francisco, and Los Angeles. “The pandemic has not upended the housing market so much as accelerated trends we saw coming into 2020,” said Zillow senior economist Jeff Tucker. “These Sun Belt destinations are migration magnets thanks to relatively affordable, family-sized homes, booming economies and sunny weather. Record-low mortgage rates and the increased demand for living space, coupled with a surge of millennials buying their first homes, will keep the pressure on home prices there for the foreseeable future.”
The PMI Flash index shows manufacturing and services perking up. Growth is the fastest since the start of 2015, however keep in mind that it is exaggerated given the drop in activity last year. The index did note that supply chain constraints are creating a backdrop for inflation.