A look back at the stories that shaped your week.
Video transcript below:
Ryan Smith: Happy Friday everyone. I’m Ryan Smith and this is MPA’s weekend review.
Janet Yellen was sworn in Monday as the new Chair of the Federal Reserve. The first woman to lead the agency, Yellen replaces departing Fed Chairman, Ben Bernanke who’s already landed the job at the Brookings Institution. Yellen’s appointment received wide support in the mortgage industry as she is expected to continue the easy money policies that led to historically low rates during Bernanke’s tenure.
Well if you didn’t think the refi boom was over, it’s pretty hard to deny it now. Refinancings currently accounts for about 62% of all mortgage activity, but Freddy Mac is projecting that the refinance share will be just 38% of all originations in 2014. The good news, the emerging purchase market is expected to pick up a lot of that slack. About that purchase market, Freddy Mac Chief Economist, Frank Nothaft predicted this week that purchase originations would be coming back in a big way this year. Nothaft predicts that 2014 will be the first year since 2000 that purchase originations will dominate the market. He also predicts mortgage rates will creep up to about 5% in 2014, but that most markets will remain affordable.
In other news, CFPB Director Richard Cordray appeared on Jeopardy Wednesday. Cordray finished second, with $5200 although he won’t be keeping that money due to his position with the government. It wasn’t the Director’s first rodeo, Cordray won more than $45,000 on the game back in 1987. CFPB didn’t even exist back then. On the other hand mortgage rates were 11% and Police Academy 4 was one of the top movies of the year, so it wasn’t all wine and roses.
Mortgage rates were down again this week, the 30 year fixed rate mortgage averaged 4.23%, down from last week’s 4.32%. The 5 year adjustable rate mortgage stands at 3.08% from last week’s average of 3.40, while the 1-year arm dropped to 2.51% from last week’s average of 2.55. This has been your weekend review for MPA, I’m Ryan Smith.