Improved Guidelines – the US department of Housing and Urban Development (HUD) released a statement on Wednesday that updates guidelines to their FHA loans in an effort to further their homeownership goals. This update reduces the price of mortgage insurance on their main loan program, making it easier for folks to qualify and reducing monthly mortgage payment.
Mortgage Rates increased again this week in response to inflation reports moving up. Interest rates are up approximately 2.75% from this time last year.
Loan Performance – Core Logic’s Loan Performance Insights showed the delinquency rate remains near record lows. Loans that are 90 days are more late remained at 1.2%, and only 0.3% of loans are in foreclosure (remember that over 1/3rd of homes are owned free in clear). Total delinquencies are down to 3% from 3.4% at this time last year.
Single Family Rents – Core Logic’s Single Family Rent Index showed that rents increased by 6.4% year over year, a moderation from the previous month’s report of 7.5%. This deceleration of increase will be reflected in future inflation reports and should help mortgage rates.
Home Sales – NAR’s Existing Home Sales Report showed that sales slowed 0.7% in January and are down 37% year over year to a 4M unit annualized pace. Inventory increased slightly from 970,000 to 980,000 units but remains very tight. If homes were to continue selling at their current pace and no new listings hit the market, supply would be exhausted after 2.9 months. 4.6 months is more balanced. If you review active listings, there are only 626,000 available, which means nearly 30% of the inventory in this report is either under construction or contract.
Mortgage Applications to purchase homes fell 18% last week and are down 41% year over year. Refinances fell 2% and are down 72% year over year.