CHM Blog

Real Estate Market Insider August 8, 2022

August 8th, 2022 11:36 AM by Richard Sardella MLO.100007700/NMLS 233568


Rates At a Glance
Mortgage Rates
Currently Trending
7 Day Mortgage
Rate Forecast
This Week's
Potential Volatility

Neutral

Higher

High
(by Sigma Research)
Real Estate Report

Nearly half of U.S. mortgage payers own at least 50 percent equity

According to ATTOM’s Q2 2022 Home Equity & Underwater Report. This means that the balance of loans taken out against the home is less than half the estimated market value of the property.

As Statista's Anna Fleck notes, the share of equity-rich homeowners has been rising continuously for the past nine quarters. While it hit 34.4 percent in Q2 of 2021, it rose to 44.9 percent in Q1 of 2022, and finally to today’s figure of 48.1 percent for Q2 2022.

At the same time, just 2.9 percent of mortgaged homes were considered “seriously underwater”, meaning that the balance of loans secured by the property exceeded its market value by at least 25 percent. This is down from 3.2 percent in Q1 of this year.

This Week's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market worsened by -72 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Higher

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Treasury Sales and 3) The Fed

1) Inflation Nation: We get key readings on Inflation this week with Wednesday's CPI and Thursday's PPI. The market will be focused on the MOM change more so than the YOY change. The YOY change is expected to move lower but that is not reflection of current trend. The lower this MOM change is, the better it will be for rates, the higher the rate of change is....the worse it will be for rates.

2) Treasury Sales: We have two key auctions this week with Thursday's 30 year Treasury bond auction taking center stage as the most important of the week.

08/09 3 year note

08/10 10 year note

08/11 30 year bond

3) The Fed: Last week, we saw some big moves in pricing in response to comments made by several Fed Presidents. The bond market will continue to put a lot of weight on any commentary/speeches from Federal Reserve representatives since they are no longer providing any forward guidance as part of their policy statements. We will hear from Evans and Kashkari and probably a few others via interviews. We will also pay close attention to the Atlanta Fed's Inflation Expectations and the updated Fed Balance Sheet.

This Week's Potential Volatility: High

This morning markets are mostly moving sideways. Volatility has started low this week but any major news event could easily shift volatility higher.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on August 8th, 2022 11:36 AM

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