MBA - applications down
Mortgage applications decreased 1.0% from one week earlier,
according to data from the Mortgage Bankers Association’s (MBA)
Weekly Mortgage Applications Survey for the week ending February
10, 2012. The Market Composite Index, a measure of mortgage loan
application volume, decreased 1.0% on a seasonally adjusted basis
from one week earlier. On an unadjusted basis, the Index was
essentially unchanged compared with the previous week. The
Refinance Index increased 0.8% from the previous week to its
highest level since August 8, 2011. The seasonally adjusted
Purchase Index decreased 8.4% from one week earlier. The
unadjusted Purchase Index decreased 3.3% compared with the
previous week and was 7.6% lower than the same week one year ago.
The four week moving average for the seasonally adjusted Market
Index is down 0.45%.
The four week moving average is down 3.87% for the seasonally
adjusted Purchase Index, while this average is up 0.21% for the
Refinance Index. The refinance share of mortgage activity
increased to 81.1% of total applications from 80.5% the previous
week. This is the highest refinance share since January 20,
2012. The adjustable-rate mortgage (ARM) share of activity
decreased to 5.4% from 6.0% of total applications from the
previous week. The average loan size in the United States in
January 2012 was $226,000. Average loan size has been increasing
in recent months, up from $225,000 in December 2011 and up from
$207,000 in January 2011. The District of Columbia has the
highest average loan size in the nation at $375,000 while Indiana
had the lowest average loan size at $143,000. Across the country,
the average loan size was $217,000 for home purchase applications
and $228,000 for refinances in the month of January.
Tentative deal on payroll tax
One day after House Republican leaders said they would offer a
bill to extend the $100 billion payroll tax rollback for millions
of working Americans without requiring spending cuts to pay for
it, the Congressional negotiators struck a broader deal that
would also extend unemployment benefits and prevent a large cut
in reimbursements to doctors who accept Medicare. A vote on the
measure would most likely happen by Friday, when Congress is set
to recess for a week. But senior aides warned that negotiators
still had to sign off formally on the agreement and that
obstacles could surface given the long-running tensions over the
measure.
Democrats, elated after winning the Republican tax concession
after months of clashes, said they had also been able to beat
back new conditions that Republicans had wanted on jobless pay,
like requiring beneficiaries to seek high school equivalency
degrees, and had found middle ground on Republican attempts to
significantly reduce the number of weeks in which the unemployed
could draw benefits. Republicans did make Democrats pay for the
added unemployment benefits through changes to federal pensions,
aides said. More important, Republican leaders and their advisers
said that they had removed an election-year hammer from the hands
of President Obama and Congressional Democrats, depriving them of
the ability to keep pounding on the idea that Republicans were
resistant to tax cuts for the middle class.
Inventory declines temporary
Crucial housing market metrics are beginning to look better to
start the year, but the recent uptick may only be the result of a
delayed foreclosure process. At the end of January, most metro
areas saw prices stabilizing, even picking up in some of the
hardest hit areas like Miami and Las Vegas, according to Altos
Research. The average home price in Miami was $465,068, up more
than 7% from the previous three months. In Vegas, where prices
were cut by more than half during the downturn, prices increased
2% over the same period, cresting more than $140,000. Inventory
is also declining in these cities. "In many markets, tight
inventory of quality properties is another contributing factor
keeping a floor on home prices this spring," Altos said. In the
20 metro areas the company covers, inventory declined more than
14% from November to January. Vegas, especially was making
progress. The city held fewer than 11,000 properties in its
inventory at the end of last month, down more than 38% from
November levels. Declining inventories do not necessarily stem
from higher home sales these days but may rather be a product of
fewer REO hitting the market. Completed foreclosures in Nevada
dropped 26% to 6,328 in 2011 from nearly 8,000 the year before,
according to RealtyTrac. From November to December alone,
inventory declined in Vegas by 27%, a change Altos called
"staggering." With mortgage servicers putting the AG settlement
behind them in January, the process may be rebooted soon, pushing
inventories higher by the end of the year.
Manufacturing highest in years
The New York Fed's "Empire State" general business conditions
index climbed to 19.53 from 13.48 in January, topping economists'
expectations for 15.0. It was the highest level since June 2010.
The index has bounced back strongly from a summer slump as the
region contracted alongside a broader manufacturing slowdown.
The survey of manufacturing plants in the state is one of the
earliest monthly guideposts to US factory conditions. US stock
index futures added to gains immediately following the data,
though investors were also focused on efforts by Greece to
salvage its needed bailout deal. "It's better-than-expected and
consistent with the idea that the US economy is picking up steam
as the year gets started," said Omer Esiner, chief market analyst
at Commonwealth Foreign Exchange in Washington. "The question is
whether or not the data will have an impact on the market or take
a back seat to developments in Europe. For now the focus is on
Europe."
The new orders index slipped to 9.73 from 13.70, while
inventories dropped to minus 4.71 from 6.59. Employment gauges
were relatively steady, with the index for the number of
employees dipping to 11.76 from 12.09 and the average employee
workweek index rising to 7.06 from 6.59. Manufacturers were
slightly less optimistic about the coming months with the index
of business conditions six months ahead falling to 50.38 from
54.87.
Fixed rate on a roll
More than 95% of refinancing borrowers chose fixed-rate loans in
the fourth-quarter of 2011, Freddie Mac said in its quarterly
product transition report. The government-sponsored enterprise
said refinancing borrowers overwhelmingly continued to prefer
fixed-rate loans even if their original loans were
adjustable-rate mortgages. Of those borrowers in a 30-year, 43%
decided to refinance into shorter loan terms of 15- or 20-years,
Freddie's report said. Meanwhile, 58% of borrowers with hybrid
ARMs moved into fixed-rate loans during the fourth quarter, while
the remaining 42% chose to refinance into the same type of loan
product they held earlier. "Fixed mortgage rates averaged 4% for
30-year loans and 3.30% for 15-year loan products during the
fourth quarter," said Frank Nothaft, vice president and chief
economist for Freddie Mac. Borrowers wanting lower refinance
rates were able to get them even when shortening their loan terms
in the fourth-quarter. The interest rate on a 15-year, FRM was
only 0.7 percentage points lower than the 30-year, FRM during the
fourth quarter, Nothaft said. "And for borrowers who plan to
remain in their current home for only a few years, the hybrid ARM
allows for even a greater interest-rate savings. The initial
interest rate on a 5/1 hybrid ARM was about 1.1 percentage points
lower than on a 30-year fixed-rate loan."
Mortgage applications decreased 1.0% from one week earlier,
according to data from the Mortgage Bankers Association’s (MBA)
Weekly Mortgage Applications Survey for the week ending February
10, 2012. The Market Composite Index, a measure of mortgage loan
application volume, decreased 1.0% on a seasonally adjusted basis
from one week earlier. On an unadjusted basis, the Index was
essentially unchanged compared with the previous week. The
Refinance Index increased 0.8% from the previous week to its
highest level since August 8, 2011. The seasonally adjusted
Purchase Index decreased 8.4% from one week earlier. The
unadjusted Purchase Index decreased 3.3% compared with the
previous week and was 7.6% lower than the same week one year ago.
The four week moving average for the seasonally adjusted Market
Index is down 0.45%.
The four week moving average is down 3.87% for the seasonally
adjusted Purchase Index, while this average is up 0.21% for the
Refinance Index. The refinance share of mortgage activity
increased to 81.1% of total applications from 80.5% the previous
week. This is the highest refinance share since January 20,
2012. The adjustable-rate mortgage (ARM) share of activity
decreased to 5.4% from 6.0% of total applications from the
previous week. The average loan size in the United States in
January 2012 was $226,000. Average loan size has been increasing
in recent months, up from $225,000 in December 2011 and up from
$207,000 in January 2011. The District of Columbia has the
highest average loan size in the nation at $375,000 while Indiana
had the lowest average loan size at $143,000. Across the country,
the average loan size was $217,000 for home purchase applications
and $228,000 for refinances in the month of January.
Tentative deal on payroll tax
One day after House Republican leaders said they would offer a
bill to extend the $100 billion payroll tax rollback for millions
of working Americans without requiring spending cuts to pay for
it, the Congressional negotiators struck a broader deal that
would also extend unemployment benefits and prevent a large cut
in reimbursements to doctors who accept Medicare. A vote on the
measure would most likely happen by Friday, when Congress is set
to recess for a week. But senior aides warned that negotiators
still had to sign off formally on the agreement and that
obstacles could surface given the long-running tensions over the
measure.
Democrats, elated after winning the Republican tax concession
after months of clashes, said they had also been able to beat
back new conditions that Republicans had wanted on jobless pay,
like requiring beneficiaries to seek high school equivalency
degrees, and had found middle ground on Republican attempts to
significantly reduce the number of weeks in which the unemployed
could draw benefits. Republicans did make Democrats pay for the
added unemployment benefits through changes to federal pensions,
aides said. More important, Republican leaders and their advisers
said that they had removed an election-year hammer from the hands
of President Obama and Congressional Democrats, depriving them of
the ability to keep pounding on the idea that Republicans were
resistant to tax cuts for the middle class.
Inventory declines temporary
Crucial housing market metrics are beginning to look better to
start the year, but the recent uptick may only be the result of a
delayed foreclosure process. At the end of January, most metro
areas saw prices stabilizing, even picking up in some of the
hardest hit areas like Miami and Las Vegas, according to Altos
Research. The average home price in Miami was $465,068, up more
than 7% from the previous three months. In Vegas, where prices
were cut by more than half during the downturn, prices increased
2% over the same period, cresting more than $140,000. Inventory
is also declining in these cities. "In many markets, tight
inventory of quality properties is another contributing factor
keeping a floor on home prices this spring," Altos said. In the
20 metro areas the company covers, inventory declined more than
14% from November to January. Vegas, especially was making
progress. The city held fewer than 11,000 properties in its
inventory at the end of last month, down more than 38% from
November levels. Declining inventories do not necessarily stem
from higher home sales these days but may rather be a product of
fewer REO hitting the market. Completed foreclosures in Nevada
dropped 26% to 6,328 in 2011 from nearly 8,000 the year before,
according to RealtyTrac. From November to December alone,
inventory declined in Vegas by 27%, a change Altos called
"staggering." With mortgage servicers putting the AG settlement
behind them in January, the process may be rebooted soon, pushing
inventories higher by the end of the year.
Manufacturing highest in years
The New York Fed's "Empire State" general business conditions
index climbed to 19.53 from 13.48 in January, topping economists'
expectations for 15.0. It was the highest level since June 2010.
The index has bounced back strongly from a summer slump as the
region contracted alongside a broader manufacturing slowdown.
The survey of manufacturing plants in the state is one of the
earliest monthly guideposts to US factory conditions. US stock
index futures added to gains immediately following the data,
though investors were also focused on efforts by Greece to
salvage its needed bailout deal. "It's better-than-expected and
consistent with the idea that the US economy is picking up steam
as the year gets started," said Omer Esiner, chief market analyst
at Commonwealth Foreign Exchange in Washington. "The question is
whether or not the data will have an impact on the market or take
a back seat to developments in Europe. For now the focus is on
Europe."
The new orders index slipped to 9.73 from 13.70, while
inventories dropped to minus 4.71 from 6.59. Employment gauges
were relatively steady, with the index for the number of
employees dipping to 11.76 from 12.09 and the average employee
workweek index rising to 7.06 from 6.59. Manufacturers were
slightly less optimistic about the coming months with the index
of business conditions six months ahead falling to 50.38 from
54.87.
Fixed rate on a roll
More than 95% of refinancing borrowers chose fixed-rate loans in
the fourth-quarter of 2011, Freddie Mac said in its quarterly
product transition report. The government-sponsored enterprise
said refinancing borrowers overwhelmingly continued to prefer
fixed-rate loans even if their original loans were
adjustable-rate mortgages. Of those borrowers in a 30-year, 43%
decided to refinance into shorter loan terms of 15- or 20-years,
Freddie's report said. Meanwhile, 58% of borrowers with hybrid
ARMs moved into fixed-rate loans during the fourth quarter, while
the remaining 42% chose to refinance into the same type of loan
product they held earlier. "Fixed mortgage rates averaged 4% for
30-year loans and 3.30% for 15-year loan products during the
fourth quarter," said Frank Nothaft, vice president and chief
economist for Freddie Mac. Borrowers wanting lower refinance
rates were able to get them even when shortening their loan terms
in the fourth-quarter. The interest rate on a 15-year, FRM was
only 0.7 percentage points lower than the 30-year, FRM during the
fourth quarter, Nothaft said. "And for borrowers who plan to
remain in their current home for only a few years, the hybrid ARM
allows for even a greater interest-rate savings. The initial
interest rate on a 5/1 hybrid ARM was about 1.1 percentage points
lower than on a 30-year fixed-rate loan."
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