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U.S Mortgage Rates Surge in Response to U.S Inflation Figures for December.
2022 Jan 16, 6:05am 2,352 views 47 comments
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41
Al_Sharpton_for_President
2022 Feb 13, 5:27am
Al_Sharpton_for_President
2022 Feb 13, 5:27am
Black Knight publishes a monthly Mortgage Monitor report that contains interesting information on the mortgage market and housing.
Press Release: Black Knight: 2021 Sees Record $2.6 Trillion Tappable Equity Gain; Home Prices Reaccelerate on Continued Inventory Shortfall as Rising Rates Increase Affordability Pressures
Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company's industry-leading mortgage, real estate and public records datasets. After a year of historic home price gains, homeowners' tappable equity – the amount available for a mortgage-holder to access while retaining at least a 20% equity stake in their home – has hit yet another record high. According to Black Knight Data & Analytics President Ben Graboske, Q4 2021's nearly half-billion-dollar increase in tappable equity has also resulted in the lowest total market leverage on record.
"Home price appreciation over the course of 2021 was unlike anything that's come before, and the incredible growth we've seen in homeowner equity is testament to that fact," said Graboske. "The aggregate total of $9.9 trillion represents an astounding 35% annual growth rate – which works out to an increase of $2.6 trillion in tappable equity in a single year. …
"The interplay between prices and rates has significantly impacted affordability and borrower buying power in recent weeks. It now takes 25.8% of the median household income to purchase the average-priced home with 20% down and a 30-year mortgage, up from the 22.4% required at the end of Q3 2021. Interest rate jumps in recent weeks have pushed us – and quite quickly – above the long-term, pre-Great Recession average payment-to-income ratio of 25%, straight to the worst affordability levels since 2008.”
emphasis added
Here is a graph on delinquencies from Black Knight:
• At 3.38%, the national delinquency rate is within 0.1% of its pre-pandemic level and very near the record low set in January 2020
• There are 35% fewer early-stage delinquencies than at the start of the pandemic, but nearly 2.5 times as many serious ones – although that metric is improving as well, albeit more slowly
• The decline in serious delinquencies has been slower than might be expected given the large number of borrowers who have exited forbearance plans in recent months and remain in loss mitigation
• The share of borrowers who have exited forbearance but are unable to make full or modified mortgage payments is worth watching
• At 946K, there are still at least half a million more seriously delinquent mortgages (including those in active forbearance plans) than prior to the pandemic
And on the payment to income ratio:
• It now takes 25.8% of the median household income to purchase the average home with 20% down and a 30-year mortgage, up from the 22.4% required at the end of Q3 2021
• Interest rate jumps in recent weeks have pushed us rapidly above the long-term, pre-Great Recession average payment-to-income ratio of 25%, resulting in the worst affordability levels since 2008
• While a 20.5% ratio has been the tipping point between market acceleration and deceleration over the past decade, severe inventory shortfalls are keeping home prices running hotter than they might otherwise
There is much more in the mortgage monitor.
https://calculatedrisk.substack.com/p/black-knight-mortgage-monitor-for?source=patrick.net
Press Release: Black Knight: 2021 Sees Record $2.6 Trillion Tappable Equity Gain; Home Prices Reaccelerate on Continued Inventory Shortfall as Rising Rates Increase Affordability Pressures
Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company's industry-leading mortgage, real estate and public records datasets. After a year of historic home price gains, homeowners' tappable equity – the amount available for a mortgage-holder to access while retaining at least a 20% equity stake in their home – has hit yet another record high. According to Black Knight Data & Analytics President Ben Graboske, Q4 2021's nearly half-billion-dollar increase in tappable equity has also resulted in the lowest total market leverage on record.
"Home price appreciation over the course of 2021 was unlike anything that's come before, and the incredible growth we've seen in homeowner equity is testament to that fact," said Graboske. "The aggregate total of $9.9 trillion represents an astounding 35% annual growth rate – which works out to an increase of $2.6 trillion in tappable equity in a single year. …
"The interplay between prices and rates has significantly impacted affordability and borrower buying power in recent weeks. It now takes 25.8% of the median household income to purchase the average-priced home with 20% down and a 30-year mortgage, up from the 22.4% required at the end of Q3 2021. Interest rate jumps in recent weeks have pushed us – and quite quickly – above the long-term, pre-Great Recession average payment-to-income ratio of 25%, straight to the worst affordability levels since 2008.”
emphasis added
Here is a graph on delinquencies from Black Knight:
• At 3.38%, the national delinquency rate is within 0.1% of its pre-pandemic level and very near the record low set in January 2020
• There are 35% fewer early-stage delinquencies than at the start of the pandemic, but nearly 2.5 times as many serious ones – although that metric is improving as well, albeit more slowly
• The decline in serious delinquencies has been slower than might be expected given the large number of borrowers who have exited forbearance plans in recent months and remain in loss mitigation
• The share of borrowers who have exited forbearance but are unable to make full or modified mortgage payments is worth watching
• At 946K, there are still at least half a million more seriously delinquent mortgages (including those in active forbearance plans) than prior to the pandemic
And on the payment to income ratio:
• It now takes 25.8% of the median household income to purchase the average home with 20% down and a 30-year mortgage, up from the 22.4% required at the end of Q3 2021
• Interest rate jumps in recent weeks have pushed us rapidly above the long-term, pre-Great Recession average payment-to-income ratio of 25%, resulting in the worst affordability levels since 2008
• While a 20.5% ratio has been the tipping point between market acceleration and deceleration over the past decade, severe inventory shortfalls are keeping home prices running hotter than they might otherwise
There is much more in the mortgage monitor.
https://calculatedrisk.substack.com/p/black-knight-mortgage-monitor-for?source=patrick.net
42
RC2006
2022 Feb 14, 7:24am
RC2006
2022 Feb 14, 7:24am
I'll take 100k house at 12%+ than fucking 700k+ at 3%. It'ss way out if whack.
43
Bitcoin
2022 Feb 14, 8:25am
Bitcoin
2022 Feb 14, 8:25am
RC2006 says
Who wouldnt.
But it cant happen. Imagine interest rates would go to 12% and houses cost 100k.....Many, me included, could just buy houses with all cash. Obviously, the market would adjust overnight and you end up with a 500k house + 12% interest.
The real "problem" is the wealth transfer. Its all about the haves and dont haves. My neighbor put his house on the market last week. 6 showings and 5 offers on the first day. 3 out of state with all cash. We are talking 1M + price tag.
Most people in the US just cant afford to buy anymore....those days are gone no matter what interest rates do. On the other hand you have people who are swimming in cash and who accumulate houses like there is no tomorrow.
This has been a reality in Europe for decades now. The well-off people get rich and the middle class gets poorer.
I'll take 100k house at 12%+ than fucking 700k+ at 3%. It'ss way out if whack.
Who wouldnt.
But it cant happen. Imagine interest rates would go to 12% and houses cost 100k.....Many, me included, could just buy houses with all cash. Obviously, the market would adjust overnight and you end up with a 500k house + 12% interest.
The real "problem" is the wealth transfer. Its all about the haves and dont haves. My neighbor put his house on the market last week. 6 showings and 5 offers on the first day. 3 out of state with all cash. We are talking 1M + price tag.
Most people in the US just cant afford to buy anymore....those days are gone no matter what interest rates do. On the other hand you have people who are swimming in cash and who accumulate houses like there is no tomorrow.
This has been a reality in Europe for decades now. The well-off people get rich and the middle class gets poorer.
44
TheAntiPanicanLearingCenter
2022 Feb 26, 2:21pm
TheAntiPanicanLearingCenter
2022 Feb 26, 2:21pm
RC2006 says
Yep. And you just refinance when the rates drop.
I'll take 100k house at 12%+ than fucking 700k+ at 3%. It'ss way out if whack.
Yep. And you just refinance when the rates drop.
45
HeadSet
2022 Feb 26, 5:23pm
HeadSet
2022 Feb 26, 5:23pm
AmericanKulak says
Plus, the lower cost is easier to pay off outright.
ep. And you just refinance when the rates drop.
Plus, the lower cost is easier to pay off outright.
46
clambo
2022 Feb 27, 3:27pm
"Houses aren't expensive, they just cost more than you can afford (borrow)".
Normally as mortgage rates rise, house prices fall, but maybe not now.
My friend was recently complaining about his Santa Cruz property taxes, he's years older than I and still goes down in the salt mines. Poor guy.
Normally as mortgage rates rise, house prices fall, but maybe not now.
My friend was recently complaining about his Santa Cruz property taxes, he's years older than I and still goes down in the salt mines. Poor guy.
47
Ceffer
2022 Feb 27, 3:31pm
Ceffer
2022 Feb 27, 3:31pm
If I can't continue to fwap on the Prop.13 fiat value of my crap shacks, life has no meaning!
« First « Previous Comments 41 - 47 of 47 Search these comments
Mortgage rates were on the rise once more in the second week of 2022.
In the week ending 13th January, 30-year fixed rates surged by 23 basis points to 3.45%. 30-year fixed rates had risen by 11 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 9th consecutive week.
Compared to this time last year, 30-year fixed rates were up by 80 basis points.
30-year fixed rates were still down by 149 basis points, however, since November 2018’s last peak of 4.94%.
Freddie Mac Rates
The weekly average rates for new mortgages as of 13th January were quoted by Freddie Mac to be:
30-year fixed rates jumped by 23 basis points to 3.45% in the week. This time last year, rates had stood at 2.65%. The average fee remained unchanged at 0.7 points.
15-year fixed rose by 19 basis points to 2.62% in the week. Rates were up by 46 basis points from 2.16% a year ago. The average fee rose from 0.6 points to 0.7 points.
5-year fixed rates increased by 16 basis points to 2.57%. Rates were down by 18 basis points from 2.75% a year ago. The average fee fell from 0.5 points to 0.3 points.
According to Freddie Mac,
All mortgage types saw rates rise, driven by the prospect of a faster than expected tightening of monetary policy.
The shift in sentiment was driven by a continued pickup in inflation exacerbated by uncertainty in labor and supply chains.
In spite of the rise in mortgage rates this year, purchase demand has yet to reflect the jump in rates.
Given the fast pace of home price growth, however, it will likely dampen demand in the near future.
Mortgage Bankers’ Association Rates
For the week ending 7th January, the rates were:
Average interest rates for 30-year fixed with conforming loan balances rose from 3.33% to 3.52%. Points decreased from 0.48 to 0.45 (incl. origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA increased from 3.40% to 3.50%. Points increased from 0.42 to 0.45 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.31% to 3.42%. Points fell from 0.38 to 0.36 (incl. origination fee) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by 1.4% from a week earlier. The Index had fallen by 2.7% from 2-weeks earlier.
The Refinance Index slipped by 0.1% in the week ending 7th January and was 50 basis points lower than the same week a year ago. The index had declined by 2% from 2-weeks ago. The refinance share of mortgage activity decreased from 65.4% to 64.1% in the week ending 7th January. The share had risen from 63.9% to 65.4% in the 2-weeks prior.
According to the MBA,
Mortgage rates increased significantly as the FED signaled tighter policy ahead, pushing yields higher.
30-year fixed hit 3.52%, its highest level since March 2020.
Rates at these levels are quickly closing the door on refinance opportunities for many borrowers.
Applications remained at their lowest level in over a month.
The housing market started 2022 on a strong note. However, the strength in growth will be dependent upon a more rapid growth in housing inventory to meet demand.
https://www.fxempire.com/news/article/u-s-mortgage-rates-surge-in-response-to-u-s-inflation-figures-for-december-867127?source=patrick.net