Refinancing Apps Rise on Record Low Rates

Mortgage
rates broke another set of records during the week ended February 3,
establishing several new historic lows. 
In response, the seasonally adjusted Mortgage Bankers Association’s (MBA)
Market Composite Index, a measure of mortgage application volume, rose 7.5
percent and 8.7 percent on an unadjusted basis. 
  

The increases were
driven solely by refinancing which represented 80.5 percent of total applications for the week,
up from 80.0 percent the previous week. 
The Index measuring applications for refinancing increased 9.4 percent over
that of the week ended January 27 but the seasonally adjusted basis the
Purchase Index ticked up only 0.1 percent. The unadjusted Purchase Index was 6
percent higher than in the previous week and 4.1 percent lower than during the
same week in 2011. 

The four-week
moving averages for the seasonally adjusted Market and Purchase Indices were up 4.88 percent and 0.65 percent respectively and
the moving average for the Refinance Index rose 5.72 percent. 

Statistics for the
month of January indicate that investors played a slightly smaller part in the
purchase mortgage market than in December with the investor share of applications
for home purchase at 6.4 percent compared to 6.9 percent in December.  In
addition, the share of purchase mortgages for second homes increased to 5.9
percent in January from 5.4 percent in December.  The investor share of applications declined
in the West and East North Central regions. 

Purchase Index vs 30 Yr Fixed

Click Here to View the Purchase Applications Chart

Refinance Index vs 30 Yr Fixed

Click Here to View the Refinance Applications Chart

Both the average
contract interest rate and the effective rate for all types of mortgages with
loan-to-value ratios of 80 percent declined for the week and all fixed-rate
mortgages (FRM) reached new lows. 

  • Rates for 30-year FRM with onforming loan balances of $417,500
    or less
    decreased to 4.05 percent from 4.09 percent, with points increasing to 0.44 from 0.41 including the
    origination fee. 
  • Jumbo 30-year FRM, those with loan
    balances greater
    than $417,500,
    had averages
    rates of 4.29 percent with .43 point compared to 4.33
    percent with 0.41 point.
  • The rate for 30-year fixed-rate mortgages backed by the
    FHA decreased to 3.89 percent from 3.96 percent, with points increasing to 0.78
    from 0.61. 
  • Fifteen-year FRM had an average
    rate of 3.33 percent, down 3 basis points from the previous week and points decreased to
    0.37 from 0.41. 
  • The rate for 5/1 adjustable-rate mortgages (ARM) decreased to
    2.91 percent from 2.94 percent, with points increasing
    to 0.40 from 0.39. The ARM share of mortgage
    applications was up to 6.0 percent from 5.6
    percent the previous week.

MBA’s Weekly
Mortgage Applications Survey covers over 75 percent of all U.S. retail
residential mortgage applications, and has been conducted weekly since
1990.  Respondents include mortgage bankers, commercial banks and
thrifts.  Base period and value for all indexes is March 16, 1990=100.

…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Price-Rise Plateau

The Green Street Advisors Commercial Property Price Index remained unchanged in January as investors stayed cautious about the direction of the U.S. economy.

Fannie Mae: Outlook for Home Prices Rises Again

By Mia Lamar

The consumer outlook for U.S. home prices improved again in January, extending a recent upward trend in housing market sentiment, according to mortgage market firm Fannie Mae.

For its monthly reading, Fannie Mae said respondents in its January survey predicted home prices will rise by 1% over the next year, up from the 0.8% gain forecast in December.

Views on the direction of the U.S. economy also continued to improve. According to the respondents, 30% said they believe the U.S. economy is on the right track, up from 22% with that view in December. The percentage who said the economy is headed in the wrong direction fell to 63% of respondents, marking a 6 percentage point decline from the previous month.

Fannie Mae Chief Economist Doug Duncan pointed to a slowly improving U.S. job market as one cause for rising confidence in the long-battered housing market. ”The strengthening employment picture last Friday provides encouragement that the improving trend in consumer confidence will continue and will at some point be reflected in a firming up of consumer spending,” Duncan said.

A report last week from the U.S. Labor Department showed nonfarm payrolls grew 243,000 last month, the largest gain since April. The jobless rate fell from 8.5% to 8.3%, the lowest it has been since February 2009.

Fannie Mae’s January survey also found 44% of respondents expect their personal financial situation to improve over the next year, up from 40% with that view in December.

The survey is based upon a monthly poll of roughly 1,000 adults and has a margin of error of plus or minus 3.1%.

Write to Mia Lamar at mia.lamar@dowjones.com

January Housing Scorecard Released by HUD, Treasury

The
Departments of Housing and Urban Development (HUD) and Treasury issued the
administration’s January Housing Scorecard on Monday.  The report is essentially a summary of
data on housing and housing finance released by public and private sources over
the previous month and/or quarter.  Most
of the data such as new and existing home sales, permits and starts, mortgage
originations, and various house price evaluations have been previously covered
by MND. 

The scorecard incorporates by reference
the monthly report of the Making Home Affordable Program (MHA) through the end
of December.  This includes information
on the universe of MHA programs including the Home Affordable Modification
Program (HAMP), HOPE Now, and Second Lien Modifications and other initiatives. 

Since the
HAMP program began in April 2009 1,774,595 homeowners have entered into trial
loan modifications, 20,074 since the November HAMP report.  About half of these homeowners, 933,327, have
completed the trials and converted to permanent modifications; 23,374
conversions took place during the current report period.  Just over three-quarters of a million of the permanent
modifications are still active.

While the
HAMP program dates to April 2009, it underwent substantial revisions to its
policies and procedures in June 2010, and many of the measures of its
performance are benchmarked at that time. 
Eight-four percent of homeowners who entered a trial modification after
that date have received a permanent modification with an average trial period
of 3.5 months compared to 43 percent who entered a trial prior to the changes.  As of December, 21,002 of the active trials
had been underway for six months or more; in May 2010, the month before the
changes took place, 190,000 trials were six months old or more.  In December every servicer except Ocwen was
above an 80 percent conversion rate.

HAMP
modifications with the largest reduction in mortgage payments continue to
demonstrate the lowest redefault rates.  At
18 months after modification all loans have a 90+ day default rate of 23
percent.  However, loans with a 20
percent or smaller reduction in loan payment are defaulting at the rate of 36.4
percent while loans with a 50 percent payment decrease or greater have a
default rate of 13.3 percent. 

The Home
Affordable Foreclosure Alternatives program offers incentives to homeowners who
wish to exit home ownership through a short sale or deed-in-lieu of
foreclosure.  Thus far 43,368 homeowners
have been accepted into the program and 27,665 transactions have been
completed, the vast majority through a short sale.  More than half of the completed transactions
(18,350) were on loans owned by private investors; 7,711 were portfolio loans
and 1,604 were GSE loans.

There has
been an emphasis in some quarters on reducing the principal balance of
distressed loans since the last HAMP report. 
Some members of Congress have asked for justification from the GSEs as
to why they were not participating in principal reductions and the Treasury
Department recently urged them to do so as well while tripling the incentives
it is paying to other investors to reduce principal.  The HAMP Principal Reduction Alternative
(PRA) has started trial modifications for 63,203 home owners and permanent
modifications for 42,753 of which 40,374 are still active.  The median principal amount reduced in these
modifications is $67,196, a median of 31.1 percent of the principal balance.

Each month
HAMP reports on selected servicer performance metrics.   Servicers
are expected to make Right Party Contact (RPC) with eligible homeowners and
then evaluate their eligibility for HAMP.  HAMP evaluated servicer outreach to 60 days
delinquent homeowners over the previous 12 months (November 2010-December 2011)
and found most services have made RPC at least 85 percent of the time; however
there is a wide range of performance results in terms of completed the evaluations.
 

Servicers
are also expected to identify and solicit homeowners in early stages of
delinquency and, effective October 1, 2011, a higher compensation structure was
put into effect to reward servicers who complete evaluations and place
homeowners in a trial modification within 120 days of first delinquency.  The table below shows the status of major
servicers relative to their eligibility for maximum incentives.

…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Nearly 100 Metro Areas on Improving Market List

The list of Improving Housing Markets (IHM) maintained by
the National Association of Home Builders (NAHB) took another big jump in
February, rising from 76 in January and more than doubling the 41 reported in
December.  There are now 98 metropolitan
areas
representing 36 states included on the list.

The IHM identifies metropolitan areas that have shown
improvement from their respective troughs on each of three metrics –
employment, housing permits, and home prices – for at least six consecutive
months.  NAHB uses data from the Bureau
of Labor Statistics, the U.S. Census Bureau, and Freddie Mac to measure
improved performance.

The additions to the February Index include some
metropolitan areas that had been particularly weak including Miami, Detroit,
Memphis, Kansas City, Missouri; Portland, Oregon, and Salt Lake City.  NAHB points out that inclusion in the Index
does not indicate strong recovery, merely that some of these troubled areas are
coming off of extreme lows.

Seven metro areas dropped off of the Index in February due
to softening housing prices.  One of
these was Washington, DC, one of the few areas that had continued to show
strong prices and sales through 2011. 

“While many of the markets on the February IMI are far from fully
recovered, the index points out where employment, home prices and housing
production are no longer retreating and have held above their lowest recession
troughs for six months or more,” said NAHB Chief Economist David Crowe.
“This is a sign that a large cross section of the country is starting to
turn the corner as local economic conditions stabilize.”

 MSA  Permits Trough Date Growth From Trough Prices Trough Date Growth From Trough Employment Trough Date Growth From Trough
1 Florence, AL 03/31/09 2.6% 02/28/11 0.6% 07/31/09 3.9%
2 Tuscaloosa, AL 05/31/11 8.8% 02/28/11 3.6% 06/30/09 1.7%
3 Fayetteville, AR 03/31/09 1.2% 02/28/11 1.0% 02/28/10 3.0%
4 Napa, CA 06/30/11 31.2% 02/28/11 0.3% 02/28/11 3.3%
5 Boulder, CO 11/30/09 11.6% 01/31/11 6.2% 01/31/10 2.7%
6 Denver, CO 03/31/09 2.8% 02/28/11 2.1% 01/31/10 1.4%
7 Fort Collins, CO 03/31/09 4.5% 12/31/10 4.6% 12/31/09 3.5%
8 Greeley, CO 11/30/10 8.1% 02/28/11 3.3% 12/31/09 0.1%
9 Bridgeport, CT 03/31/09 1.2% 02/28/11 4.5% 01/31/10 1.4%
10 New Haven, CT 04/30/11 26.0% 02/28/11 0.0% 02/28/10 2.1%
11 Cape Coral, FL 03/31/09 3.1% 02/28/11 8.1% 01/31/11 1.7%
12 Deltona, FL 03/31/11 2.6% 03/31/11 15.1% 01/31/11 3.3%
13 Jacksonville, FL 04/30/09 1.4% 02/28/11 1.5% 02/28/10 2.3%
14 Miami, FL 04/30/09 7.3% 03/31/11 2.6% 03/31/10 1.7%
15 North Port, FL 01/31/09 2.7% 02/28/11 6.2% 06/30/11 1.2%
16 Punta Gorda, FL 01/31/09 1.6% 02/28/11 11.5% 06/30/09 3.5%
17 Tampa, FL 03/31/09 1.7% 03/31/11 3.8% 12/31/09 2.6%
18 Athens, GA 03/31/11 4.2% 01/31/11 2.7% 01/31/10 0.8%
19 Augusta, GA 12/31/08 1.7% 03/31/11 3.0% 05/31/11 0.0%
20 Honolulu, HI 12/31/08 0.4% 01/31/11 3.4% 08/31/10 3.1%
21 Ames, IA 07/31/10 7.4% 02/28/11 6.3% 05/31/11 2.4%
22 Davenport, IA 05/31/09 1.8% 12/31/10 4.1% 01/31/10 0.7%
23 Des Moines, IA 02/28/09 4.5% 01/31/11 2.6% 05/31/11 1.5%
24 Dubuque, IA 12/31/08 5.0% 02/28/11 3.1% 04/30/09 5.8%
25 Waterloo, IA 03/31/09 1.4% 11/30/10 0.9% 07/31/09 4.1%
26 Elkhart, IN 04/30/09 2.2% 02/28/11 1.5% 08/31/09 10.4%
27 Indianapolis, IN 01/31/09 0.4% 02/28/11 3.0% 10/31/09 0.6%
28 Lafayette, IN 01/31/09 15.7% 02/28/11 5.4% 07/31/09 4.0%
29 Muncie, IN 04/30/11 11.1% 02/28/10 3.4% 02/28/11 2.7%
30 Lake Charles, LA 04/30/11 6.2% 02/28/11 0.9% 11/30/10 3.6%
31 Monroe, LA 03/31/09 3.3% 05/31/10 3.6% 03/31/11 1.3%
32 Shreveport, LA 01/31/09 1.9% 03/31/11 5.6% 10/31/09 3.2%
33 Boston, MA 02/28/09 1.1% 03/31/11 0.7% 07/31/09 2.9%
34 Springfield, MA 04/30/11 3.8% 03/31/11 2.5% 08/31/09 2.6%
35 Cumberland, MD 05/31/10 3.1% 01/31/11 6.2% 06/30/11 6.5%
36 Lewiston, ME 06/30/11 16.1% 01/31/11 1.4% 06/30/11 3.8%
37 Ann Arbor, MI 05/31/09 0.1% 12/31/10 4.5% 07/31/09 3.0%
38 Detroit, MI 04/30/09 8.6% 03/31/11 6.8% 06/30/09 2.4%
39 Grand Rapids, MI 04/30/09 2.9% 02/28/11 7.7% 07/31/09 5.0%
40 Lansing, MI 05/31/09 4.4% 02/28/11 10.6% 08/31/09 2.7%
41 Monroe, MI 12/31/09 2.7% 02/28/11 7.6% 10/31/09 2.5%
42 Muskegon, MI 11/30/09 0.2% 01/31/11 6.1% 12/31/10 1.6%
43 Duluth, MN 05/31/11 2.9% 03/31/11 4.6% 09/30/09 0.6%
44 Minneapolis, MN 03/31/09 1.8% 02/28/11 2.5% 09/30/09 1.5%
45 Rochester, MN 03/31/09 0.7% 02/28/11 2.4% 12/31/10 1.5%
46 Columbia, MO 11/30/08 1.7% 02/28/11 1.5% 08/31/09 3.6%
47 Jefferson City, MO 08/31/10 1.0% 03/31/11 3.9% 02/28/10 2.1%
48 Joplin, MO 02/28/11 5.0% 02/28/11 15.4% 08/31/09 1.2%
49 Kansas City, MO 03/31/09 3.2% 02/28/11 5.2% 06/30/11 1.2%
50 Hattiesburg, MS 01/31/11 2.2% 03/31/11 4.1% 04/30/11 3.6%
51 Fayetteville, NC 12/31/08 2.1% 01/31/10 0.3% 10/31/10 3.2%
52 Winston-Salem, NC 03/31/09 1.9% 11/30/10 0.1% 01/31/11 2.4%
53 Bismarck, ND 03/31/09 15.3% 02/28/10 8.8% 12/31/07 8.8%
54 Fargo, ND 04/30/09 4.9% 02/28/11 3.0% 07/31/09 4.2%
55 Grand Forks, ND 04/30/09 3.0% 12/31/10 7.7% 09/30/10 4.2%
56 Lincoln, NE 01/31/09 1.6% 01/31/11 4.2% 07/31/10 3.2%
57 Omaha, NE 07/31/10 4.5% 03/31/11 2.7% 02/28/10 2.6%
58 Manchester, NH 02/28/11 2.1% 02/28/11 0.5% 01/31/10 1.8%
59 Ocean City, NJ 03/31/09 1.0% 03/31/11 6.3% 05/31/11 5.7%
60 Syracuse, NY 03/31/11 2.9% 03/31/11 10.2% 08/31/10 1.5%
61 Cincinnati, OH 01/31/09 0.2% 02/28/11 2.1% 12/31/10 1.6%
62 Springfield, OH 01/31/11 13.4% 03/31/11 2.5% 01/31/10 3.5%
63 Toledo, OH 05/31/09 1.4% 01/31/11 0.6% 06/30/09 3.4%
64 Youngstown, OH 06/30/11 5.2% 02/28/11 3.9% 06/30/09 4.0%
65 Oklahoma City, OK 05/31/09 0.6% 02/28/11 1.0% 01/31/10 4.0%
66 Tulsa, OK 10/31/10 0.8% 02/28/11 4.4% 02/28/10 3.1%
67 Corvallis, OR 04/30/11 5.7% 02/28/11 4.3% 07/31/09 4.9%
68 Portland, OR 03/31/09 2.6% 03/31/11 3.7% 11/30/09 2.0%
69 Erie, PA 03/31/11 4.6% 02/28/11 3.1% 02/28/10 3.9%
70 Philadelphia, PA 03/31/09 0.7% 02/28/11 2.9% 02/28/10 0.5%
71 Pittsburgh, PA 02/28/09 1.6% 01/31/10 6.5% 02/28/10 4.1%
72 Williamsport, PA 03/31/11 46.3% 02/28/10 8.5% 12/31/09 3.9%
73 Chattanooga, TN 05/31/11 2.6% 02/28/11 4.0% 08/31/09 3.2%
74 Clarksville, TN 01/31/09 2.7% 02/28/11 1.3% 08/31/09 5.1%
75 Kingsport, TN 02/28/11 0.4% 01/31/11 1.6% 02/28/10 2.8%
76 Memphis, TN 04/30/09 2.8% 03/31/11 1.1% 09/30/10 3.1%
77 Nashville, TN 03/31/09 1.6% 02/28/11 1.4% 09/30/09 3.7%
78 Amarillo, TX 10/31/08 1.7% 01/31/10 3.2% 04/30/10 4.6%
79 College Station, TX 10/31/10 5.5% 02/28/11 10.2% 12/31/07 3.6%
80 Corpus Christi, TX 01/31/11 5.1% 12/31/10 4.3% 11/30/09 6.0%
81 Dallas, TX 05/31/09 0.9% 02/28/11 0.5% 12/31/09 3.6%
82 Laredo, TX 12/31/08 1.3% 01/31/10 2.9% 09/30/09 7.1%
83 Longview, TX 04/30/09 3.2% 03/31/11 5.9% 10/31/09 7.9%
84 McAllen, TX 01/31/09 0.4% 11/30/10 1.9% 12/31/07 5.2%
85 Midland, TX 04/30/09 3.6% 01/31/10 8.7% 08/31/09 10.0%
86 Odessa, TX 02/28/09 24.5% 11/30/10 8.9% 08/31/09 9.0%
87 Tyler, TX 03/31/09 0.4% 12/31/10 0.8% 07/31/10 5.3%
88 Victoria, TX 09/30/10 4.2% 02/28/11 6.2% 11/30/09 4.8%
89 Provo, UT 02/28/09 2.7% 03/31/11 1.1% 12/31/09 4.6%
90 Salt Lake City, UT 03/31/09 2.3% 03/31/11 0.4% 02/28/10 3.6%
91 Danville, VA 03/31/09 1.8% 11/30/10 11.4% 11/30/09 2.9%
92 Winchester, VA 04/30/11 7.9% 10/31/10 8.4% 08/31/09 5.4%
93 Burlington, VT 03/31/11 6.1% 01/31/10 1.3% 09/30/09 4.5%
94 Bellingham, WA 04/30/11 2.7% 03/31/11 0.2% 06/30/11 0.4%
95 Kennewick, WA 03/31/09 4.2% 03/31/11 0.3% 12/31/07 4.4%
96 Madison, WI 01/31/09 1.3% 02/28/11 0.8% 08/31/09 2.1%
97 Casper, WY 11/30/10 7.0% 01/31/10 3.2% 12/31/09 8.5%
98 Cheyenne, WY 12/31/08 6.0% 12/31/10 3.0% 01/31/10 2.8%

…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.