An Insider’s Look Into How Secondary Marketing Evaluates LOs

In this webinar we’ll explore the long-term financial impacts of renegotiations, extensions and fallouts, plus basic guidelines to be viewed as a professional by your secondary marketing department

HousingWire Annual Virtual Summit

Sessions from HousingWire Annual 2021 are going to be virtually streamed on October 25. Register now for FREE to tune into what housing industry leaders had to say this year!

How servicers can access timely, accurate data insights

Learn how to navigate the challenges in today’s market – for example, the need for ongoing, on-demand access to near-real-time data and the ability to access those data insights in a timely and accurate manner.

Steve Murray on new brokerage models, CFPB crackdowns

Today’s HousingWire Daily features a discussion on the emergence of a new brokerage model and the validity behind the concerns against institutional investors.

MortgageReal Estate

Leading indicators point to a May pick-up in home sales

Applications for purchase mortgages surpass last year

Mortgage credit availability is the highest ever recorded for the spring market. Fixed rate for home loans are near 4% and wages are up.

Hmmmm. What can that mean for the spring selling season? Unless Americans don’t want to own houses anymore – and that hasn’t happened yet – it means this month’s data should look pretty good.

But until we see hard numbers showing this month’s home sales, and while we’re awash in housing data reflecting the stagnant first quarter, let’s focus on leading indicators that hint at what’s happening in the spring housing market.

First, the purchase index from the Mortgage Bankers Association, which measures applications for mortgages to buy homes, increased 5% during the first week of May compared with the previous week, and was 5% higher than the same week one year ago.

But, those are applications, right? How likely will they turn into home sales? MBA’s mortgage credit availability index for April was the highest reading for that month in the eight-year index. And, it was near the record high seen in mid-2018. A high reading means it’s easier to get home loans and a low reading indicates a credit crunch.

At the end of March, the U.S. average rate for a 30-year fixed mortgage had the largest one-week decline in more than 10 years, dropping to 4.06%, according to Freddie Mac. Since then, it has bounced around in a narrow band, and this week averaged 4.1%. That's almost half a percentage point lower than it was a year ago, according to Freddie Mac data.

Sales of new home, which are recorded when a contract is signed, rose 4.5% in March, according to the Commerce Department. Pending home sales, reflecting existing homes with newly signed contracts, rose 3.8% in March, according to the National Association of Realtors

“There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,” Lawrence Yun, chief economist of NAR, said in the report.

The next report on new home sales will be released on May 23, and data on pending sales of existing homes will be released on May 30. Until then, track the mortgage applications index – specifically “purchase apps” – MBA issues every Wednesday to monitor the temperature of the spring market.

But, you can’t get a mortgage without enough income, and there are also positive indicators on that. Wage growth has picked up steam in recent months, after years of stagnation. Federal Reserve Governor Lael Brainard cited the positive news about wages in a speech on Friday in Washington.

“Employment rates of adults in their prime working years have been rising steadily during the expansion and recently reached their pre-recession peak,” Brainard said. “Importantly, wage growth has begun to pick up after years of slow gains.”

Most Popular Articles

FHFA to make desktop appraisals permanent

Desktop appraisals, a temporary flexibility implemented in March 2020 amid lockdowns and social distancing, will become permanent, the FHFA said today.

Oct 18, 2021 By

Latest Articles

Mortgage execs better prepare for redlining enforcement

Since Rohit Chopra was confirmed as the new director of the CFPB in September, there’s been one particular word on the lips of mortgage executives. And it gives them chills: redlining. HW+ Premium Content

Oct 20, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please