Mortgage rates rose last week, placing a damper on loan applications as reported by the
Mortgage Bankers Associations. Purchase
applications declined by 3.0% where refinance apps plummeted 20%. Interest rates declined slightly this week
due to strong demand for 10 YR Notes at Wednesday’s government auction. The decline in rates is not expected to be
enough to generate any type of significant increase in mortgage activity for
next week’s report, especially for refinances.
Thanks
to a sharp increase in home values in the 2nd quarter of this year,
2.5 million more mortgage borrowers are no longer underwater on their loan
balances. It is reported that as of June
30th, 7.1 million borrowers remained underwater, which represents
14.5% of mortgage properties. This is a
significant drop from the 1st quarter numbers of 9.6 million. When we look back at the worst period for
real estate during the recession, it was estimated that 26% of borrowers were
upside down on their equity position in their homes.
First
time jobless claims declined to the lowest point since the recession, all the
way down to 292,000. There is a special
factor which is raising a question about the accuracy of the report: In two states they are in the process of
computer upgrades, which is leading some analysts to believe that the
Department of Labor may have undercounted claims.
In
the absence of any other significant economic news, I decided this week would
be a good time to recap some of the major news headlines that many people were
following.
Ø Apple announces launch of iPhone 5S and less expensive
iPhone 5C. Apple stock declined 5% on
the news, as more and more analysts feel that Apple is lacking significant
innovation in their products
Ø A six story billboard is placed in Times Square
stating opposition to the launch of Obamacare.
Ø The U.S. Postal Service is so broke that they are
going to begin renting mail vans instead of purchasing new delivery trucks, as
the existing fleet ages.
After
a very light week of data, the coming week is shaping up to have a number of
market moving reports:
·
Monday September
16th – Industrial Production
·
Tuesday September
17th – Consumer Price Index
·
Wednesday
September 11th - MBA Applications, Housing Starts, FOMC Meeting
Announcement
- Thursday September 12th - First Time Jobless Claims and
Existing Home Sales
Sincerely,
Cindy Tomlinson
Loan Officer
Loan Officer
USLending Company
BRE Lic # 01520422
NMLS # 214851
NMLS # 214851
PS… FOLLOW ME on
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