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January 2009
Mortgage Applications Report Released
January 29, 2009
Mortgage Applications Fall In Latest MBA Weekly Survey
WASHINGTON, D.C. (January 28, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 23, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8 percent on a seasonally adjusted basis from 1195.3 one week earlier. This week’s results included an adjustment to account for the shortened week due to the Martin Luther King Jr. holiday. On an unadjusted basis, the Index decreased 46.5 percent compared with the previous week and 40.4 percent compared with the same week one year earlier.
Highlights from the report:
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.22 percent from 5.24 percent, with points decreasing to 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.98 percent from 4.99 percent, with points decreasing to 1.13 from 1.20 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs increased to 5.96 percent from 5.89 percent, with points decreasing to 0.06 from 0.07 (including the origination fee) for 80 percent LTV loans.
Please click here to view the entire release.
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National Overnight Mortgage Rate Averages
January 26, 2009
Source: Bankrate.com
Rates may include points
View: Six months
30 year fixed /
15 year fixed
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Majority of economists expect a slow recovery this year
January 26, 2009
By Barbara Hagenbaugh and Barbara Hansen, USA TODAY
WASHINGTON — The U.S. economy will climb out of recession in the second half of the year, but firms will continue to cut jobs through 2009 and growth will likely be more of a crawl than a sprint, according to USA TODAY's latest survey of economists.
The unemployment rate is expected to peak at 8.8% early next year, according to the median answer of 52 economists surveyed by USA TODAY Jan. 15-22. That is up from the 7.2% jobless rate seen in December and would be the highest since 1983. The jobless rate often continues to rise following a recession as employers remain cautious and implement earlier, announced cuts.
Rising unemployment and general economic uncertainty are expected to keep the Federal Reserve on the interest-rate sidelines through 2009. The Fed meets Tuesday and Wednesday and is expected to pledge to keep rates near zero for as long as it takes to get the economy moving.
Economic improvement doesn't mean smooth sailing. The majority of the economists said the economy wouldn't return to a healthy, sustainable growth rate until 2011 or later. And 42%, a plurality, said the recession will turn out to be the worst in postwar history.
Standard & Poor's chief economist David Wyss says that for many people, the economy won't feel good for some time: "The key number for people is probably the unemployment rate. Until you see that turn around … I think people will feel this is a recession, regardless of what the economists say."
But Wyss and the vast majority of economists expect the economy will turn a corner this year. Consumers are expected to increase their spending again in the second quarter as fiscal stimulus, bargain-basement interest rates and lower costs for a variety of items, including gasoline, prompt them to loosen up their wallets a bit. Home sales are also expected to hit bottom, providing a boost to consumer confidence.
Nearly two-thirds of the economists, however, said the recovery will be "slow and gradual" given continued strains in financial markets and fragile business and consumer confidence. Businesses are expected to continue to cut spending until early 2010.
But there are a few economists, such as Action Economics chief economist Michael Englund, who anticipate a stronger recovery.
"Once the dust settles on the current consumer and business pullback, we will likely see substantial pent-up demand," says Englund, who expects consumers will swoop in to buy cheap cars and homes at low interest rates once credit markets thaw.
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We’re All in This Together - What’s Good for Homeowners Is Good for America
January 26, 2009
Source: RISMedia
Commentary by Ralph R. Roberts
RISMEDIA, January 26, 2009-Over the past year or so, the American homeowner has taken it on the chin-a one-two-three punch that has knocked many out of their homes and threatens to do the same to millions more. First, the housing bubble burst, stripping billions in equity. Tight credit landed the next blow, preventing homeowners from refinancing their way out of trouble. Finally, a severe economic downturn has led to record job losses, making it difficult or impossible for many families to keep their homes even if they otherwise would be able to negotiate a loan modification with their lender.
If American homeowners weren’t down for the count just yet, some of their fellow citizens are lining up to stomp them into the dirt. These folks, no doubt consisting of those who have been fortunate enough to dodge the foreclosure bullet so far, are calling for the end of the bailouts-specifically for the end of any bailouts for homeowners. These are the people who post comments on blogs and discussion forums every day claiming that homeowners who are drowning in debt shouldn’t be “rewarded” with special deals.
What most of those who are clamoring for an end to homeowner bailouts, such as loan modifications, fail to realize is that we are all in this together. What’s good for homeowners is good for America.
Here’s why:
- Foreclosures reduce property values for everyone in the neighborhood.
- Lower property values usually mean states, counties, and towns have less money to fund education and other services.
- Lower property values also lead to lower commissions for real estate agents and less business for everyone who makes a living off of the real estate industry.
- Foreclosures leave vacant homes that tend to attract vandals, vagrants, and other criminal types who either set up shop in the homes or use the homes to commit real estate or mortgage fraud.
- Rising default rates convince lenders to tighten credit, making it more difficult and costly to borrow money.
- As families lose their homes, they have less money to spend on products and services, lowering demand and increasing unemployment.
- The mass exodus of families from an area destabilizes the neighborhood, often attracting transient (just passing through) populations. This makes it difficult for schools and other township agencies to plan for development.
Foreclosures feed on foreclosures as the repercussions from one foreclosure ripple through the economy.
Don’t be fooled-when a family loses its home, everyone in the neighborhood becomes a victim of foreclosure. This is why it is so important for us to work together, as Americans have traditionally done in the face of crises, to stem the tide of foreclosures and stabilize the housing market. We need to stop worrying about homeowners who have gotten breaks that seem unfair and begin to realize that we have a lot more to lose if homeowners across America are not given the breaks they need.
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Long-Term Mortgage Rates Rise this Week, Reversing 11-Week Trend
January 23, 2009
Source: Realty Times
Long-Term Mortgage Rates Rise this Week, Reversing 11-Week Trend
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Surveyâ (PMMSâ) in which the 30-year fixed-rate mortgage (FRM) averaged 5.12 percent with an average 0.7 point for the week ending January 22, 2009, up from last week when it averaged 4.96 percent. Last year at this time, the 30-year FRM averaged 5.48 percent.
The 15-year FRM this week averaged 4.80 percent with an average 0.7 point, up from last week when it averaged 4.65 percent. A year ago at this time, the 15-year FRM averaged 4.95 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.24 percent this week, with an average 0.6 point, down from last week when it averaged 5.25 percent. A year ago, the 5-year ARM averaged 5.13 percent. The 5-year ARM has not been this low since the week ending September 8, 2005, when it also averaged 5.24 percent.
One-year Treasury-indexed ARMs averaged 4.92 percent this week with an average 0.7 point, up from last week when it averaged 4.89 percent. At this time last year, the 1-year ARM averaged 4.99 percent.
"Fixed-rate mortgages followed bond yields and edged up this holiday week," said Frank Nothaft, Freddie Mac vice president and chief economist. However, over the first three weeks of 2009, 30-year fixed-rate mortgages averaged 0.25 percentage points below its monthly average for December 2008. As a result, the number of mortgage applications for refinancing was roughly about 86 percent of all conventional loans over the same time period."
"New housing construction continues to thin due to foreclosures and an abundance of unsold homes. Housing starts for 1-family homes fell 13.5 percent in December 2007 to an annualized pace just under 400,000 houses, the slowest pace since the data were collected in January 1959. In addition, homebuilder confidence fell to a record low in January since history began in January 1985."
Published 1/23/2009
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