Real Estate Insider Blog

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01
Jun
2016

Are Interest Rates Going Up?

 

Market Update

Tuesday, May 31, 2016
 

What's going on and why does it matter?

Mortgage bonds opened lower today, and are sitting right at their 100-day moving average, which has been operating as a strong level of technical support over the past few weeks.  This is a big week for the markets with lots of high-tiered economic reports that may sway the market wildly one way or another.  Of particular interest is Friday's non-farm payrolls report, preceded on Thursday by an OPEC meeting on oil, and an ECB meeting on European monetary policy.  If the economic reports are favorable this week, the Fed may be more inclined to increase rates in June.  If this happens, the Fed may bring an end to their mortgage bond buying program sooner rather than later.  The Fed is scheduled to purchase up to $1.4 billion in GNMA mortgage bonds today, and they'll be purchasing up to $2.375 billion in 30-yr conventional mortgage bonds tomorrow.  Today's personal income and core inflation numbers came out in line with market expectations.  However, expect lots of volatility this week as the market deals with the deluge of economic reports that will be released in the coming days.  In the midst of all this, it'll be interesting to see if mortgage bond prices can hold above their 100-day moving average.  If they break below that level, the next hard stop on the way down will be their 200-day moving average,...

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17
Oct
2015

DELIINQUENT MORTGAGES CONTINUE TO FALL

By Michael Neal

According to the most recent release of the Mortgage Bankers Association's National Delinquency Survey, the share of mortgages that are considered delinquent continued to fall. The delinquency rate is at its lowest level since the third quarter of 2007.

According to the most recent release of the Mortgage Bankers Association's National Delinquency Survey, the share of mortgages that are considered delinquent continued to fall. On a seasonally adjusted basis, the share of mortgages past due declined to 5.68% in the fourth quarter of 2014, 17 basis points from the third quarter of 2014 and 71 basis less than its level in the fourth quarter of 2013. At 5.68% the delinquency rate is at its lowest level since the third quarter of 2007.

The decrease over the year in the not seasonally adjusted share of mortgages past due reflected declines over each stage of delinquency. The proportion of mortgages 30-59 days past due fell by 31 basis points to 2.97% while the percentage of mortgages considered 60-89 days past due shrank by 13 basis points to 1.02%. The share of mortgages 90 or more days past due decreased 30 basis points to 2.25%. As Figure 1 shows, mortgages 90 or more days past due averaged 0.8% between 1980 and 2005. However, the percentage of mortgages 90 or more days past due soared during the most recent recession, peaking at 5.1% in the fourth quarter of 2009. Since then, the share of mortgages 90 or more days past due has declined significantly.

A...

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