MOrtage Market Update 11-22-2010
Mortgage Deliquency Rate Falls:
The U.S. mortgage delinquency rate declined last quarter as the employment picture brightened. The Mortgage Bankers Association reported that the rate of delinquency on single-family homes for the third quarter fell 0.72% from the previous quarter for a reading of of just 9.13%.
The media coverage of the housing market would lead most to assume that almost every house is in foreclosure and that most mortgages are delinquent or in foreclose. This is far from true. Certainly a delinquency rate of 9.13% is higher than what any banker wants to see, but it also means that 90.87% of all mortgages are paid on time. And with businesses adding 151,000 jobs last month and Initial Jobless Claims continuing to fall, we appear to be on firmer ground.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -59 basis points last week causing 30 year fixed rates to increase from the previous week. This is after the prior week’s -147 basis point sell off. The Federal Reserve’s $600 billion Quantitative Easing II plan was in effect for the second straight week and the longer term bonds such as MBS are not a big fan. MBS have sold off -122 basis points since the first day of their Treasury purchase program which has pressured mortgage rates upward.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 23-Nov | 8:30 | GDP – Second Estimate | Q3 |
| 23-Nov | 8:30 | GDP Deflator – Second Estimate | Q3 |
| 23-Nov | 10:00 | Existing Home Sales | Oct |
| 23-Nov | 14:00 | Minutes of FOMC Meeting | 3-Nov |
| 24-Nov | 7:00 | MBA Mortgage Applications | 19-Nov |
| 24-Nov | 8:30 | Personal Income | Oct |
| 24-Nov | 8:30 | Personal Spending | Oct |
| 24-Nov | 8:30 | PCE Prices – Core | Oct |
| 24-Nov | 8:30 | Durable Orders | Oct |
| 24-Nov | 8:30 | Durable Orders -ex transportation | Oct |
| 24-Nov | 8:30 | Initial Claims | 20-Nov |
| 24-Nov | 8:30 | Continuing Claims | 13-Nov |
| 24-Nov | 9:55 | Michigan Sentiment – Final | Nov |
| 24-Nov | 10:00 | New Home Sales | Oct |
| 24-Nov | 10:00 | FHFA Home Price Index (q/q) | Q3 |
| 24-Nov | 10:30 | Crude Inventories | 20-Nov |
