Volatility has returned to the mortgage market in grand fashion this week with many lenders quoting rates that are as much as a quarter of a point higher than they were last week. That means if you were looking at something in the 2.75% neighborhood on Friday, it could be 3.0% today.
The upward pressure is nothing new, really. It has existed in the broader bond market since August, but only recently began spilling over to the mortgage market. We’ve been discussing the increased risks of such a spillover in the event of a sharper bond market move and yesterday brought just such a move. Today was much more docile by comparison, but it didn’t do anything heroic to push back against yesterday’s weakness.
For the ninth consecutive month, more than half of all offers authored by Redfin real estate agents faced a competing bid, according to a monthly survey by Redfin.
The COVID-19 pandemic and resulting surge in remote labor, for many Americans, continues to prompt a search for larger homes and relocation to more spacious environs, Redfin reports. Pending home sales were up 28% annually in the week ending January 24, while the number of homes for sale was down 36%.
Mortgage rates remain at historic lows, with the average 30-year fixed-rate at 2.73% in the week ending February 4, which is “another motivating factor for buyers,” researchers say.
New mortgage originations totaled $1.2T in the fourth quarter, New York Fed says
Overall household debt increased by $206 billion in the fourth quarter of 2020 to $14.56 trillion, according to the Federal Reserve Bank of New York. The Fed said that increase was primarily driven by a dramatic increase in mortgage originations.
Mortgage debt balances broached the $10 trillion mark in the fourth quarter, increasing by $182 billion from the third quarter to $10.04 trillion at the end of December, the Federal Reserve Bank of New York’s Center for Microeconomic Data said Wednesday.
New mortgage originations, driven by record-low interest rates that propelled refinancings, totaled $1.2 trillion in the fourth quarter, surpassing volumes seen during the historic refinance boom in the third quarter of 2003, the New York Fed said.
President Joe Biden Tuesday announced an extension of the moratorium on home foreclosures for federally backed mortgages through the end of June. The foreclosure halt previously was slated to end March 31.
The move is a coordinated effort among the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture to “deliver immediate relief for American families bearing the brunt of the COVID-19 crisis,” according to a statement from the White House.
Today, 1 in 5 renters is behind on rent and more than 10 million homeowners are delinquent on their loans. People of color face even greater hardship and are more likely to have deferred or missed payments, putting them at greater risk of eviction and foreclosure, according to the White House’s press release.
Housing 2021 isn’t the housing bubble of 2005
The years 2020-2024 will have the best housing market demographics ever recorded in U.S. history, with the lowest mortgage rates recorded in history. When you have these two titans acting in unison, it can potentially accelerate real home prices in an unhealthy way.
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