Morning Briefing: Lenders report rise in purchase mortgages

by Steve Randall15 Jun 2016
Lenders report rise in purchase mortgages
Lenders have reported an increase in demand for GSE eligible purchase mortgages in the second quarter of 2016. Demand was 70 per cent on net, up from 20 per cent in the first quarter.

The latest Fannie Mae Mortgage Lender Sentiment Survey shows positivity in the housing market overall, with the increased demand for purchase loans in the third quarter expected to be roughly in line with last year; GSE eligible loans at 60 per cent, non-GSE eligible loans at 42 per cent, and government-backed loans at 58 per cent.

“Key survey sentiment indicators suggest that lenders remain cautiously optimistic in their market outlook,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The outlook for purchase demand growth over the next three months returned to levels similar to last year, while the outlook for refinance demand and profit margin improved moderately versus last year’s levels.”

The survey, carried out before the May jobs report, also showed that most lenders expect credit standards to remain unchanged, having eased in recent months.
 
Foreclosure inventory fell by almost a quarter in April
There was a 23.4 per cent drop in the US homes foreclosure inventory in April compared with a year earlier; completed foreclosures were down 15.8 per cent.

CoreLogic says that there were 37,000 completed foreclosures in the month with inventory at 406,000. The inventory represents 1.1 per cent of all homes with a mortgage and is at the lowest rate in any month since September 2007.

“The number of homeowners who have negative equity has fallen by two-thirds since its 2010 peak, and the number of borrowers in foreclosure proceedings has also continued to drop,” said Anand Nallathambi, president and CEO of CoreLogic. “Despite this progress, about four million homeowners remained underwater at the end of the first quarter, and these borrowers are more vulnerable to foreclosure proceedings if they should fall delinquent.”

The inventory fell 3 per cent in the month from March. The states with the highest rates of inventory were: New Jersey (3.7 per cent), New York (3.2), and Hawaii (2.2). Those with the lowest rates were: Alaska and Minnesota (both at 0.3 per cent) and Utah, Arizona and Colorado (all at 0.4 per cent).
 
Mass. pending home sales hit another record month
Home sales in Massachusetts continue to boom with the state recording its highest level of pending sales since 2004.
“May is typically a high-activity month, and this year topped even the record pending sales we had this time last year,” said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod. “It’s heartening to see, especially with the continuing problem of low inventory, that people want to live and work in Massachusetts and they’re able to find suitable homes.”

There was an 18.4 per cent rise in pending sales of single-family homes in May compared to a year earlier and a 12 per cent rise for condos. Median prices rose 3.8 per cent for single-family homes ($353,000) and 3 per cent for condos ($340,000).
 

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