Down Payment Assistance Grant – AREAA Portland is excited to offer their first $10,000 DPA grant! Priority will be given to a first-generation home buyer with limited English proficiency and low to moderate income. know someone that could benefit from a $10,000? Please have them apply by October 1st.
Mortgage Rates improved again this week as the price of Mortgaged Backed Securities continues to trend upwards, remaining at their best levels we have seen since Jan 2023. Rates are down approximately 1.125% from this time last year.
Home Values – the Core Logic Home Price Index showed that were flat in the month of July after rising 0.3% in June and 0.6% in May. Year over year prices rose 4.3% which is the 150th consecutive positive reading. Core Logic is anticipating more moderate gains over the next 12 months, but they are famously conservative in their predictions.
Inflation – the August Consumer Price Index report showed that inflation rose 0.2% during the month. Year over year inflation rose 2.5% which is a decline from 2.9%. The Core rate, which strips out food and energy prices, increased by 0.3% but remained flat at 3.2% year over year. If you annualize the previous 3 months of readings the headline inflation would be at 1.14% and the core reading would be at 2.04% which shows inflation is continuing to soften and approach the Fed’s target. The biggest factor holding inflation up is Shelter costs which make up 45.7% of the core index. Shelter remains up 5.2% year over year and made up roughly 82% of the inflation rise in Aug.
Home Equity – CoreLogic’s Home Equity Insights Report showed that home equity values rose $1.3 Trillion or 8% year over year, increasing total home equity on mortgaged homes to a massive $17.6T. On average homeowners with mortgages have $315,000 in equity – $200,000 of which is tappable. Negative equity continues to decline, down 15% year over year. Only 1.7% of all mortgaged properties or about 960,000 homes nationwide are under water. Some interesting homeownership stats:
– 136M households in the US
– 91M homes owned (67% homeownership rate)
– 56.5M homes are mortgaged (62%)
– 34.5M free and clear (38%)
– 45M homes rented (33%)
Yield Curve “Un-Inverts” – since May of 2022 the 2 year Treasury Yield has been paying more than the 10-year treasury yield. This week that flipped back and the 10-Year is now yielding a higher return. Please note that the 3-month treasury yield still exceeds the 10-year by over 1.4% Historically, recessions begin after yield curve inversion ends (see grey or recessionary areas on chart). Recessionary periods typically trail the ‘un-inversion’ event by 2 – 13 months.
Mortgage Applications to purchase homes rose 2% last week and are down 3% year over year. Refinance applications rose 1% last week and are up 106% year over year. Refinances now make up 47% of application volume.