More rate rises are likely around the corner.
Inflation in the United States accelerated in September, with the cost of housing and other necessities intensifying pressure on households, wiping out pay gains and ensuring that the Federal Reserve will keep raising interest rates aggressively. Consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago - the fastest such pace in four decades. And on a month-to-month basis, such “core” prices soared 0.6% for a second straight time, defying expectations for a slowdown and signaling that the Fed’s multiple rate hikes have yet to ease inflation pressures. Core prices typically provide a clearer picture of underlying price trends. Overall prices rose 8.2% in September compared with a year earlier, down slightly from August, the government said Thursday in its monthly inflation report. But from August to September, prices increased 0.4%, faster than the July-to-August increase. Though cheaper gas helped slow the broadest measure of inflation, costlier food, medical care and housing pointed to the breadth of price pressures across the economy. “We still have no evidence that inflation is decelerating,” said Matthew Luzzetti, an economist at Deutsche Bank. “Let alone the clear and convincing evidence that the Fed is looking for.” Stock markets fell sharply in early trading, but then rebounded and moved higher. The Dow Jones was up 560 points, or 1.9%, in mid-day trading. Thursday’s report represents the final US inflation figures before the Nov. 8 midterm elections after a campaign season in which spiking prices have fueled public anxiety, with many Republicans casting blame on President Joe Biden and congressional Democrats. Speaking Thursday in Los Angeles, Biden acknowledged the pain that inflation is causing many people, while suggesting that the latest figures showed “some progress.” “Americans are squeezed by the cost of living,” the president said. “It’s been true for years, and folks don’t need to read a report to tell them they’re being squeezed. Fighting this battle every day is a key reason why I ran for president.” Even with widespread price spikes, the September data showed that the prices for many physical goods, including clothing, used cars, furniture, and appliances, dropped last month. A key factor is that supply chain snarls have eased, and many large retailers such as WalMart and Target have discounted some items to clear excess stockpiles. Yet the price drops were not as steep as many economists expected, and they were more than offset by sharp increases in services prices, including health care, auto repair and housing. A measure of housing costs jumped 0.8% in September, the largest such increase in 32 years. The Fed’s rate hikes have led to much higher mortgage rates - the average on a 30-year fixed home loan is nearly 7% - and caused home sales to tumble and prices to falter. But declining house prices will take time to feed through into the government’s measure. The cost of health insurance jumped 2.1% from August to September and more than 28% over the past 12 months - a record one-year increase. The cost of auto repairs surged 15% in September from a year earlier, also a record high. The supply chains of many car parts are still disrupted. “The primary driver of inflation has rotated away from goods prices and to services,” said Eric Winograd, US economist at AB. “Services inflation is heavily influenced by wages, and so it is going to take a meaningful weakening of the labor market to bring inflation to heel.” Inflation in services is also being fueled by steady consumer demand. Though there are signs that lower-income Americans are cutting back, higher-income households still appear willing to spend on travel, restaurant meals and services like veterinary care. Both Delta and American Airlines, for example, reported strong revenue growth this week, driven by increased demand from travelers. Airfares rose a brisk 0.8% from August to September. Service businesses are having to rapidly raise wages to attract the workers they need. Those higher labor costs, in turn, are often passed on to consumers in the form of higher prices. Inflation has swollen families’ grocery bills, rents and utility costs, among other expenses, causing hardships for many and deepening pessimism about the economy despite strong job growth and historically low unemployment. Kasondra Mathews is among those feeling the squeeze. Mathews, 50, who lives near Denver, has been working overtime as a nurse’s assistant to keep up with her rent and grocery bills. Her rent has increased roughly 5% a year for the past several years, shrinking her budget for other items. With her daughter a senior in high school and headed soon to college, Mathews has found ways for her to apply to her preferred schools for free. She’s also forgoing any visits to a college to avoid the travel expense. “We didn’t get to do college tours, because we can’t afford it,” she said. “I couldn’t do the things you might want to do for your senior.” As the elections near, Americans are increasingly taking a dim view of their finances, according to a new poll by The Associated Press-NORC Center for Public Affairs Research. Roughly 46% of people now describe their personal financial situation as poor, up from 37% in March. That sizable drop contrasts with the mostly steady readings that had lasted through the pandemic. The September inflation numbers essentially guarantee that the Fed will raise its key short-term rate by three-quarters of a point for a fourth straight time when it next meets in early November. The Fed has already raised its key short-term rate by three percentage points since March, the fastest pace of hikes since the early 1980s. Those increases are intended to raise borrowing costs for mortgages, auto loans and business loans and cool inflation by slowing the economy. At their last meeting in late September, Fed officials had projected that by early next year, they would raise their key rate to roughly 4.5%, which would be the highest level in 14 years. Some economists now predict that the Fed will have to boost rates even higher to defeat what appears to be an entrenched bout of inflation. The risk is that such higher borrowing costs would push the economy into recession. Fed policymakers said at the September meeting that inflation was “showing little sign so far of abating,” according to minutes from the Fed’s most recent meeting. Used car prices dropped 1.1% from August to September, the third straight decline. Wholesale used car prices have fallen much faster, yet dealers have resisted passing on those declines to consumers, resulting in much bigger profits. Lael Brainard, vice chair of the Federal Reserve, noted this week that retailers have also reported healthy profit margins, having raised prices more than they have increased wages. “The return of retail (profit) margins to more normal levels could meaningfully help reduce inflationary pressures in some consumer goods,” Brainard said. Some large chains have started to cut prices. But it’s not clear how much effect on inflation that will have in the coming months. Walmart has said it will offer steep discounts on such items as toys, home goods, electronics and beauty. Target began offering holiday deals earlier this month. But after jacking up prices for the past 18 months, companies are reluctant to reverse course. Until consumer demand slows further, forcing more companies to compete on price, costs for many goods will likely stay high, economists say. “There’s a saying in economics that prices go up like rockets and down like feathers,” said Eric Swanson, a former Fed economist who is now a professor at the University of California, Irvine. “You’re kind of seeing that a little bit.”
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167% increase from a year ago, but borrowers selling homes to avoid foreclosure auctions.
Lenders started the foreclosure process on a total of 67,249 properties across the US in Q3 - up by a staggering 167% from a year ago, according to a new report by real estate data firm, ATTOM. The increase was close to pre-pandemic levels and 1% up from the previous quarter. The foreclosure process often starts when a borrower has received a default notice after missing four monthly mortgage payments in a row, although most lenders will reportedly send a notice of default when they are 90 days – or three months - past due. ATTOM’s Q3 2022 US Foreclosure Market Report also showed there were 92,634 properties with foreclosure filings, including scheduled auctions or bank repossessions. This was also up from a year ago (104%) and 3% from the previous quarter. Moreover, a total of 31,836 properties had foreclosure filings in September, up 62% compared to the same period a year ago, but down 8% from the previous month. Rick Sharga, executive vice president of market intelligence for ATTOM, nonetheless pointed out that although foreclosure starts had been rising since the end of the government’s foreclosure moratorium (June 30 for residential mortgages), they were still lagging behind pre-pandemic levels. He said: “Foreclosure activity is reflecting other aspects of the economy, as unemployment rates continue to be historically low, and mortgage delinquency rates are lower than they were before the COVID-19 outbreak.” The States with the largest number of foreclosure starts during the third quarter were California (7,368), followed by Florida (6,671), Texas (6,217), Illinois (4,702), and New York (3,997). The report also showed that New York topped the list of the 223 metropolitan areas with the highest number of foreclosure starts during the same period, followed by Chicago (3,950) and Los Angeles, (2,275). In contrast, the metropolitan areas with a population of more than one million that saw a decline in foreclosure starts were Tulsa, Oklahoma (down 60%), Kansas City, Missouri (down 26%) and Birmingham, Alabama (down 25%). Nationwide, one in every 1,517 properties had a foreclosure filing in Q3, and the States with the highest foreclosure rates during this period were Illinois (one in every 694 housing units), Delaware (one in every 825), New Jersey (one in every 855), South Carolina (one in every 971), and Ohio (one in every 1,027). Bank repossessions increase Lenders repossessed a total of 10,515 properties through foreclosure (REO) in Q3 - up 39% from a year ago and 18% from the previous quarter, although very few of the homes entering the foreclosure process reverted to the lender at the end of the foreclosure, according to Sharga. He added: “In fact, nearly three times more homes were repossessed by lenders in the second quarter of 2019 than in the second quarter of 2022. We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.” The States that posted the largest number of completed foreclosures (REOs) in Q3 included Illinois (1,331), Michigan (729) and New York with 695. The Takeaways
"In some areas, a growing number are seeing signs of a slowdown"..
Remodeling market sentiment declined in the third quarter, according to the National Association of Home Builders (NAHB). While it remains positive in many parts of the country, NAHB’s Remodeling Market Index (RMI) fell to a reading of 77 in Q3 2022, down 10 points from Q3 2021. The report also revealed that 23% of remodelers said the market had worsened in the third quarter of 2022, compared to only 10% who said it had improved. “Home equity and ongoing strong demand for work at home and an aging housing stock are supporting demand for remodeling,” said NAHB chief economist Robert Dietz. “Interest rates are having a negative effect, more so on new construction than remodeling, so it’s not surprising that remodeler sentiment has so far managed to stay positive.” The Current Conditions Index decreased eight points year over year to an average of 82 points. All of its three components declined as well: the component measuring large remodeling projects ($50,000 or more) was down six points to 80, the component measuring moderately-sized remodeling projects (at least $20,000 but less than $50,000) posted an eight-point drop to 83, and the component measuring small remodeling projects (under $20,000) slipped six points to 85. The Future Indicators Index registered a 13-point decline to 71 in the third quarter. The component measuring the current rate at which leads and inquiries are coming in dropped 17 points to 66, and the component measuring the backlog of remodeling jobs decreased by eight points to 77. “In some areas, however, a growing number are seeing signs of a slowdown due to the ongoing problems of labor shortages, high material prices and rising interest rates,” said NAHB Remodelers chair Kurt Clason. “After a decline in 2022, NAHB expects a small increase in remodeling activity in 2023, in contrast to the rate of new construction, which we anticipate will continue to decline,” Dietz said. Here are some of the obstacles they’re facing.
Millennials are now the largest segment of the population in the US—as well as the largest segment of potential homebuyers. But very real issues such as exorbitant housing costs, burdensome debt, and tighter lending standards are standing in their way. Here is what you should know about millennials and homeownership (or lack thereof). Millennials and their attitude to homebuying Millennials’ attitude to homebuying is simple: they want to own homes someday but are feeling priced out. The biggest roadblock to homeownership for the millennial generation (ages 26-41) is affordability, according to a March Bankrate survey conducted by YouGov. The survey found that among millennials, 65% said homeownership was the top sign of success. Fifty-nine percent (59%) of Gen Zers (ages 18-25), on the other hand, said homeownership was the top sign of success. The most important sign of success for Gen Zers was having a successful career (60%). Millennials said that they believe rising property prices are the reason they are unable to afford a home. Gen Zers, by comparison, said their income is not yet high enough. Overall, the survey found that 74% of American adults view homeownership as the most important sign of success. To find more affordable homes, the younger generations appear willing to take some action, according to the survey. Sixty-nine percent (69%) of millennials and three-quarters of those in Generation Z said they would relocate to another state to afford a property, even if the area itself was less desirable. They are also willing to pay a discount price for a fixer upper. Why are millennials not buying houses? Fewer millennials are buying houses compared to previous generations. A 2019 survey conducted by Fannie Mae found that more than half of millennials and Gen Zers (55%) feel that homeownership is financially out of reach. The costs of mortgages, tighter lending standards, and personal financial problems were all cited as contributing factors. At the top of the list is the high cost of housing. The median existing home price rose to over $350,000—an all-time high—from $329,000 just a few months prior, according to the National Association of REALTORS. Inflation, housing shortages, low interest rates, and the rising costs for building materials all contribute to the rise in the cost of housing. Next is the high levels of debt many millennials carry. Nearly three-quarters of millennials are saving for future goals and life milestones—which includes saving for a home—according to the Bank of America’s 2020 Better Money Habits Millennial Report. Unfortunately, more than three-quarters of millennials are also struggling with debt, which makes it near impossible to have enough for a down payment on a property. Finally, tighter lending standards are preventing millennials from entering the housing market. While mortgage rates are low, the standard for lending has tightened significantly since the 2007-2009 recession. Mortgage credit availability dropped in June 2021, according to a Mortgage Bankers Association report. Another indication that lending standards are getting tighter is that the Mortgage Credit Availability Index fell by 8.5% last June. Understanding the issue of affordability The housing affordability crisis in the US has increased over the last two years. House prices skyrocketed at record rates due in part to rising demand, up some 34% since the beginning of the COVID-19 pandemic. While the red-hot housing market is showing signs of cooling, homeownership remains a distant goal for many millennials in the US. Will millennials ever buy a house? Yes—in two years’ time Both the housing market and millennial demand remain red hot, recent data from the Bank of America suggests. Sixty-seven percent (67%) of millennials said they are likely to purchase a property in the next two years, the 2022 Millennial Home Improvement Survey found. The top reason cited for this shift is an improvement in financial position, which is consistent with strong household balance sheets and increasing wages in the United States. However, more respondents said they were getting financial support from others, especially compared to surveys conducted in previous years. Millennials make up the largest portion of the population that are purchasing properties, with 43% buying new homes. That number is up from 37% in 2021, the National Association of Realtors found. Millennials also represent roughly one-fifth of the population in America and are the fastest-growing demographic in terms of homebuyers. In fact, the majority of millennials own homes, according to the survey, with 53% saying they have their own property—up from 52% in the previous survey. Two of the largest residential lenders reported noticeable declines in their Q3 mortgage profits.
JPMorgan Chase and Wells Fargo, two of the nation’s largest home lenders, released their third-quarter earnings report on Friday. Hammered by higher interest rates, both banks reported a significant decline in their home lending revenues. Wells Fargo originated $21.5 billion of residential first liens in Q3 2022, a 36.1% decline from Q2 2022 and down 58.6% from Q3 2021. “Industry mortgage rates have increased over 300 basis points since the beginning of the year and ended the quarter at the highest level since 2007, driving weekly mortgage applications as measured by the Mortgage Bankers Association to a 25-year low at quarter end,” said Mike Santomassimo Wells Fargo chief financial officer. Santomassimo noted a 52% year-over-year decline in the bank’s residential lending revenue, “driven by lower mortgage originations and gain on sale margins as well as lower revenue from the resecuritization of loans purchased from securitization pools.” “While the mortgage market adjusts to lower volumes, we expect it to remain challenging in the near term, and it’s possible that we have a further decline in the mortgage banking revenue in the fourth quarter when originations are seasonally slower,” he added. “We continue to remove excess capacity to align with the reduced demand and expect these adjustments will continue over the next couple of quarters.” Meanwhile, JPMorgan experienced a 45.5% quarter-over-quarter decline in its mortgage originations, funding $15.2 billion in residential loans in Q3. Compared to the third quarter of 2021, the firm’s mortgage production was down by 67%. “The only significant item this quarter was discretionary net investment securities losses in corporate of $959 million as a result of repositioning the portfolio by selling US treasuries and mortgages,” said Jeremy Barnum, chief financial officer of JPMorgan Chase. “Our strong results this quarter reflect the resilience of the franchise in a dynamic environment.” JPMorgan CEO Jamie Dimon expects inflation and ongoing market volatility to deplete consumers’ savings sometime in mid-2023. “It’s rather predictable if you look at how they’re spending and inflation,” Dimon said. “You have inflation, higher rates, higher mortgage rates, oil volatility war. So those things are out there, and that is not a crack in current numbers. It’s quite predictable. It will strain future numbers.” Arbitration Panel Awards Divorced Spouse Nearly $2 Million for Being Refused Loss Mitigation10/22/2022 Chicagoland Consumer Advocates' Award Against One of America's Largest Mortgage Loan Servicers Includes Compensatory, Punitive Damages and Homeowner's Attorney's Fees.
Consumer lawyers Nick Wooten, Rusty A. Payton, and Adam J. Feuer, have obtained a substantial verdict for their client in a consumer fraud case against PHH Mortgage Services, a wholly owned subsidiary of Ocwen Financial Corporation. Ocwen denied the consumer loss mitigation and refused to follow Freddie Mac guidelines to assist homeowners going through a divorce. The award is significant because it demonstrates that Ocwen / PHH has harmed thousands of divorcing homeowners by refusing them loss mitigation during divorce as a matter of corporate policy. Policy which directly conflicts with Ocwen / PHH's obligations under Federal law and Freddie Mac guidelines. "Our client was mistreated for nearly five years because Ocwen simply refuses to follow the law. Ocwen's conduct maintains a long-time trend of abusing homeowners and ignoring legal obligations. Ocwen engaged in tactics that made it impossible for our client to get the relief she was entitled to, eventually suing her for foreclosure in early 2018," said Rusty A. Payton. "Ocwen then dangled an offer of help and received payments intended for loss mitigation only to later snatch the offer away. Ocwen mistreats divorcing borrowers in need of a loan modification. Our client is relieved that this long nightmare appears to be drawing to an end." "PHH's unvarnished illegality strips divorcing consumers of their rights under Federal law. Divorcing couples have a right to loss mitigation and loan modifications in the name of the borrower retaining the home. PHH ignores and tramples on those rights. We were glad to help our client in this case but who knows how many thousands of homeowners have lost their home due to Ocwen's abuse of divorcing borrowers." said Nick Wooten, the lead trial attorney and a consumer lawyer with more than 25 years of experience trying similar cases against the nation's largest mortgage servicers, including Ocwen. "At Ocwen / PHH, violating and ignoring consumers' rights is business as usual." After filing suit, the consumer agreed with Ocwen to arbitrate the dispute during the COVID pandemic in a binding arbitration through the American Arbitration Association. The culmination of that process was a six day arbitration hearing conducted by a JAMS Arbitrator who is a retired Cook County Circuit Court Judge. In her award, the Arbitrator noted: "Corporate actions and indifference, when practiced to the harm of a targeted group, can easily be described as malicious. For Claimant, the actions of the loan modification process in December 2018 through June 2019 may not have begun as intentionally malevolent, but clearly evolved into deceit. Claimant's request for punitive damages is supported by the record." The Arbitration final award was issued on September 29, 2022. The consumer has moved the United States district court to confirm the award and enter an enforceable money judgment. "Ocwen's counsel has represented that they will contest entry of judgment, at least in part, on the grounds that the arbitrator was guilty of misconduct or misbehavior, an allegation that is both baseless and repugnant to her reputation and the professional manner in which she conducted the hearing," adds Payton. "Matrimonial attorneys, divorcing spouses, and consumer lawyers should all be on the lookout for mortgage servicers denying divorced or divorcing couples loss mitigation This misconduct seems rampant today," adds Adam J. Feuer. "Homeowners who are experiencing similar deceptive or abusive conduct from their mortgage servicer should know that there are powerful tools available to hold these companies to account, and we are here to help." Wooten recently became head of consumer litigation for Austin, Texas based DC Law advocating for consumers with a national reach. Payton is the principal of Payton Legal Group and Feuer is the principal of Chicagoland Consumer Advocates The trial team can be reached by calling 773-945-9880. The case is Albeck v. PHH Mortgage Corp., No. 20-cv-07727, United States District Court, Northern District of Illinois. Ocwen was represented at the hearing by attorneys Simon Fleischmann and Ryan Sawyer of Locke Lord LLP. The Arbitrator's award may be found at: Albeck Final Award. View original content:https://www.prnewswire.com/news-releases/arbitration-panel-awards-divorced-spouse-nearly-2-million-for-being-refused-loss-mitigation-301655764.html Company says it is "fully provisioned" for the payment.
Credit Suisse Group AG agreed to pay $495 million to settle the largest remaining case related to its role in selling residential mortgage-backed securities in the US that contributed to the 2008 financial crisis. The Swiss bank said in a statement on Monday that it’s “fully provisioned” for the payment, which will resolve claims tied to more than $10 billion in such securities. The New Jersey Attorney General had alleged damages of $3 billion in a litigation case filed in 2013. “Credit Suisse is pleased to have reached an agreement that allows the bank to resolve the only remaining RMBS matter involving claims by a regulator and the largest of its remaining exposures on its legacy RMBS docket,” it said. Investors are closely watching the bank ahead of an Oct. 27 strategy announcement aimed at putting an end to years of scandals and losses that have eroded investor confidence. The Zurich-based bank has suffered weeks of tumult as markets questioned its stability amid a broader sell-off. Credit Suisse shares climbed 1.1% to 4.47 Swiss francs ($4.46) by 9:10 a.m. in Zurich, though the stock has still lost more than a fifth of its value this year. Legal risks Credit Suisse is among lenders that have been defending themselves against claims over the sale of mortgage securities that plummeted in value during the 2008 crisis. It paid $600 million last year to settle a lawsuit with MBIA Insurance Corp over mortgage securities. The banks have faced allegations that they misrepresented the quality of the home loans underpinning these securities in order to win buyers, exacerbating the impact of the sub-prime mortgage crisis. Credit Suisse faces a longer list of legal woes. Last week, the prospect of fresh legal risks for the bank arose when US authorities launched a probe investigating whether the bank helped clients hide assets. In Singapore, a Credit Suisse trust is awaiting the outcome of a trial that will determine its liability for losses tied to a rogue banker. In June, Switzerland’s top court handed the bank a guilty verdict in an historic case over money laundering. Growing share of listings may have to cut prices to meet reduced demand, expert says.
Single-family home price growth slowed to an annualized pace of 13.8% in the third quarter, according to Fannie Mae’s latest Home Price Index (HPI). The Q3 home price reading is down from 19.1% in Q2, according to the index, which measures the average quarterly price change for all single-family properties in the United States (excluding condos). On a quarterly basis, home prices climbed at a seasonally adjusted 0.2% in the third quarter, the slowest quarter of growth since the fourth quarter of 2011. On a non-seasonally adjusted basis, home prices were down by 0.2% in the third quarter. “Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” said Fannie Mae chief economist Doug Duncan. According to the Mortgage Bankers Association, mortgage application volume fell 2% for the week ending Oct. 7. Applications for both refinancing and home purchases also continued to fall behind last year’s record levels, down 86% and 39%, respectively. “In addition to the greater affordability constraints for potential homebuyers, many existing homeowners likely feel ‘locked-in’ to their existing, lower-interest-rate mortgages,” Duncan explained. “This contributes to fewer homes being listed, as well as fewer potential buyers, and may lead to a growing share of listings having to cut prices to meet the reduced demand.” Duncan added that the supply of completed, new single-family homes for sale has started to increase, suggesting that homebuilders may also need to begin offering greater price concessions to move inventory. “We expect these trends to continue in the coming months,” he said. It illustrates a battered market…
A measure of US homebuilder sentiment dropped for a 10th straight month in October, hitting the lowest level since the early days of the pandemic and illustrating a housing market battered by soaring mortgage rates. The National Association of Home Builders/Wells Fargo gauge decreased 8 points to 38, the weakest since May 2020, figures showed Tuesday. The gauge was weaker than the most pessimistic forecast in a Bloomberg survey of economists. Sentiment has fallen every month this year, extending what was already the longest stretch of declines in data back to 1985. “While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers,” NAHB Chief Economist Robert Dietz said in a statement. The housing market has been the clearest sign yet of the Federal Reserve’s policies working their way through the economy, sending mortgage rates to a 20-year high. With the central bank signaling it’ll stay on an aggressive path of interest-rate hikes to stomp out decades-high inflation, there’s likely more pain ahead for the real estate sector. The report’s measure of future sales slid 11 points to 35, the lowest since 2012, while indexes of current sales and prospective buyer traffic weakened to the softest levels since May 2020. Builder sentiment weakened in all regions but the Northeast. In the West, it fell to a 10-year low. Application activity reaches new low.
“Mortgage applications are now into their fourth month of declines, dropping to the lowest level since 1997,” said Joel Kan, deputy chief economist of the Mortgage Banker Association (MBA). Overall mortgage application volume fell 4.5% on a seasonally adjusted basis from one week earlier. The increase comes as long-term mortgage rates hit their highest level in 20 years, according to Kan. “The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market,” he added. “Residential housing activity ranging from new housing starts to home sales have been on downward trends coinciding with the rise in rates.” Refinance applications posted a 7% week-over-week decline, and purchase activity was down 4% from a week ago. Year over year, refi and purchase application volumes were down 86% and 38% over the year, respectively. Of total applications, the refinance share of mortgage activity dropped seven basis points to 28.3% week over week. Meanwhile, the adjustable-rate mortgage share of activity increased to 12.8%, and the portion of FHA loans rose to 13.6%. “With rates at these high levels, the ARM share rose to 12.8% of all applications, which was the highest share since March 2008. ARM loans continue to remain a viable option for borrowers who are still trying to find ways to reduce their monthly payments,” Kan said. |
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