Monday February 21, 2011
Mortgage Delinquency Rates Decline:
You would think by the barrage of negative news reports that just about every other home was going into foreclosure. Certainly this is not the case. In fact, the housing market has stabilized in the past six months. The latest report from the Mortgage Bankers Association shows that the percentage of homeowners that were behind at least one monthly payment fell from 9.1% in the third quarter to 8.2% in the fourth quarter. Also, the 2010 delinquency rate fell from over 10% in the beginning of the year to 8.2% at the end of the year.
The 2% drop in mortgage delinquencies follows the recent drop in the Unemployment Rate and the steady increase in Existing Home Sales and Consumer Confidence. These are significant signs that the housing market is closing in on a true market equilibrium.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +39 basis points last week which caused 30 year fixed rates to move lower after reaching their highest levels of 2011 in the prior week. The economic data such as PPI and CPI showed inflationary pressures that consumers pay – which is usually bad for mortgage rates. But the geo-political concerns over continued tensions in the Middle East, specifically the news stories of the Iranian War Ships requesting access to the Suez Canal, caused traders to move their funds into the safety of bonds which temporarily helped mortgage rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 22-Feb | 9:00 | Case-Shiller 20-city Index | Dec |
| 22-Feb | 10:00 | Consumer Confidence | Feb |
| 23-Feb | 7:00 | MBA Mortgage Index | 18-Feb |
| 23-Feb | 10:00 | Existing Home Sales | Jan |
| 24-Feb | 8:30 | Initial Claims | 19-Feb |
| 24-Feb | 8:30 | Continuing Claims | 12-Feb |
| 24-Feb | 8:30 | Durable Orders | Jan |
| 24-Feb | 8:30 | Durable Orders ex Transporation | Jan |
| 24-Feb | 10:00 | FHFA Housing Price Index | Dec |
| 24-Feb | 10:00 | New Home Sales | Jan |
| 24-Feb | 11:00 | Crude Inventories | 19-Feb |
| 25-Feb | 8:30 | GDP – Second Estimate | Q4 |
| 25-Feb | 8:30 | GDP Deflator – Second Estimate | Q4 |
| 25-Feb | 9:55 | Michigan Sentiment – Final | Feb |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Sincerely,
Ron and Lisa Marie Mulso
