Mortgage News for the Week of February 8, 2019
Has Spring Sprung Early for the Housing Market?

Demand for housing is picking up and housing analysts are pointing to lower mortgage rates as the main reason. The spring buying season may be coming early.

In Coppell, Texas, a suburb of Dallas, real estate pros reported a traffic jam of buyers lined up on the front stairway to get into an open house.

"It kind of caught us a little bit off-guard," Laura Barnett, a real estate professional with RE/MAX DFW Associates in the Dallas area, told CNBC about the sudden uptick in buyer demand. "We actually did get a surge of buyers coming in. And, matter of fact, I worked with two this weekend, one of which is under contract; another is about to be."

The 30-year fixed-rate mortgage increased for most of 2018 and neared 5 percent, prompting home sales to decrease. However, rates have been moderating in recent weeks, and potential home shoppers are taking advantage. The 30-year fixed rate mortgage averaged 4.46 percent last week, Freddie Mac reports.  Read more at NAR's Realtor Magazine.
HPSI Starts the New Year on a Hopeful Note
Consumer Sentiment Suggests Improving Affordability

The Fannie Mae  Home Purchase Sentiment Index┬« (HPSI) increased in January, rising 1.2 points to 84.7 and paring some of its recent losses. The increase can be attributed primarily to an 8-percentage point jump in the net share of Americans who reported substantially higher household income today compared to this time last year.

"Movement among the HPSI components points to possible housing affordability relief at the start of 2019," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The net share of consumers expecting home prices to increase over the next year has declined further, falling to the lowest level since late 2012.

Meanwhile, consumer perceptions of household income growth have improved, with the net share noting rising income over the past year hitting a survey high. Furthermore, fewer consumers since last summer, on net, believe that mortgage rates will rise over the next year - a sentiment consistent with the Fed's statement at its January meeting that it will be patient with future target rate adjustments.

Overall, these results are in line with our forecast that, amid improving affordability conditions, home sales should stabilize in 2019 after declining last year for the first time in four years."  Read more from Fannie Mae.
Falling Rates Help Bump Refinancing Opportunities

Although they covered the topic in last month's Mortgage Monitor, further declines in interest rates have prompted Black Knight to take another look at the impact on the refinance pool. The previous edition reported that the 30-basis point drop in the 30-year fixed rate mortgage from a post-recession peak in November to 4.55 percent by the end of December had boosted the pool of borrowers who could qualify for and benefit from refinancing by more than a half million. At that point the pool had returned to 2.4 million homeowners who could reduce their rate by at least 0.75 percent.    

Since then the rate has fallen to 4.45 percent, the lowest since last April, and the refinance pool has grown to 2.9 million, 1 million more than when rates were at their peak, and the largest this population has been since January 2018. Black Knight says, "Even if rates should hold steady - and certainly if they fall further - this could lead to an unexpected bump in refinance volumes in early 2019.  Read more at Mortgage News Daily.
Millennials Still Want Realtors

It's no doubt that the mortgage industry is feeling the effects of the digital disruption. With more and more players blurring the line between the real estate and mortgage spaces, it stands to reason that the real estate industry is feeling the effects of the digital disruption as well.

As millennials have become the largest group of home buyers, industries have been observing their buying patterns and where they find the most value in the home buying process. The relevance of realtors was recently highlighted in the 2019 Millennial Home Buyer Report from Clever Real Estate, which surveyed 1,000 Americans who indicated they were planning to buy a home in the next year in order to get a snapshot of who these buyers are and what they want.

The good news for realtors is that people still want to use them as part of the home buying process. Because of this, client relationships are more important than ever, and realtors who understand that will be the ones who survive.  Read more at MPA Magazine.
Mortgage Rates Drop

house and graph The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months. This is great news for consumers who will be looking for homes during the upcoming spring home buying season. Mortgage rates are essentially similar to a year ago, but today's buyers have a larger selection of homes and more consumer bargaining power than they did the last few years.





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Information and analysis is obtained through third parties and is deemed accurate but not guaranteed.  Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570.

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