Highlights of economic news that influenced mortgage markets from last week, include a survey of senior loan officers from U.S. and foreign banks doing business in the U.S.
They indicated that banks were gradually easing lending standards for business and consumer loans, but viewed lending criteria for home loans as more restrictive than other types of loans.
According to CoreLogic, U.S. home prices increased at their fastest pace since February 2006. Mortgage rates rose incrementally, and the Weekly Jobless Claims report came in lower than the expected 339,000 at 333,000 new jobless claims.
Last Weeks Mortgage News
Monday: Bank loan officers surveyed indicated that while mortgage lending requirements have been eased for low risk mortgage loans, it remains challenging for those with less-than-stellar credit to qualify for home loans.
Bankers noted some concern that easing credit standards may signal to the Fed that it’s time to taper the quantitative easing program that’s designed to keep long term interest rates, including mortgage rates, low.
Tuesday: The CoreLogic Home Prices report for June showed that home prices rose 1.90 percent in June, and rose by 11.88 percent year-over-year. 48 states showed rising home prices while only Mississippi and Delaware showed a decline.
Nevada led the list of higher home prices with a 27.00 percent gain year-over-year; Nevada home values were among the hardest-hit in the economic downturn.
Thursday: Weekly Jobless Claims came in at 333,000, which were higher than last week’s reading of 328,000 new jobless claims. The four-week average is considered a less volatile indicator of unemployment trends.
The four week rolling average for new jobless claims decreased by 6250 to 335,000. This was the lowest reading for the four-week rolling average since November 2007.
Freddie Mac Mortgage Rate Survey
Freddie Mac’s weekly report on mortgage rates brought not-so-good news; the average rate for 30-year fixed rate mortgages rose by one basis point to 4.40 percent, while the average rate for a 15-year fixed mortgage was unchanged at 3.43 percent. The average rate for a 5/1 adjustable-rate mortgage rose by one basis point to 3.19 percent.
Discount points for 30-year fixed rate mortgages and 15-year fixed rate mortgages were unchanged at 0.7 percent, while average discount points for a 5/1 adjustable rate mortgage dropped to 0.5 percent.
What’s Coming Up
“Mortgage Bonds begin the week higher aided by continued weakness in the Stock markets. Stock Traders are skittish with equities near record highs and the threat of QE tapering. History has shown that taking the “punchbowl” away will not be good for Stocks. This is good news for Bonds. There are no economic reports due for release today, but the rest of the week’s calendar is packed with reports that will give the Fed a broad view as to how the U.S. economy is holding up.
This week’s economic news includes the federal budget for Monday. Retail Sales and Core Retail Sales will be reported on Tuesday; the Producers Price Index (PPI) and Core PPI will be out on Wednesday.
Thursday’s news includes weekly jobless claims and Freddie Mac’s mortgage rates update. The Consumer Price Index (CPI) and Core CPI (excluding volatile food and energy sectors) will also be released. The NAHB Home Builders Housing Market Index (HMI) is also due Thursday.
Friday’s scheduled economic news includes Housing Starts, Building Permits and Consumer Sentiment for July.
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