Daily Newsletter: Affordability Worsens as Price Gains Re-Accelerate

Black Knight did not publish a Mortgage Monitor in January, so the new issue looks at the mortgage market at the end of 2021 into the early days of 2022. The company says that home price growth, which showed signs of cooling in the summer and fall of last year now appears to be re-accelerating, in part because of worsening inventories, which the company calls a crisis. Much of the report, however, is devoted to the performance of mortgage loans almost two years after the pandemic sent the economy into a brief, but dramatic freefall. While delinquency data for the period was reported in Black Knight’s “first look” last month, the company takes a more detailed look at the current status of the forbearance program and seriously delinquent loans. As to home prices, they were up 0.84 percent in December, the largest growth on record for that month and a quarter point greater than the December 2020 gain. More than three quarters of the largest 100 markets saw increases slow between July and August of last year, now nearly all have picked up the pace due to a shrinking supply of homes. The company says it expects that trend continued into January as well. Black Knight says condo prices continue to rise faster than single family home prices due to a more depleted inventory. This is contrary to a recent report from CoreLogic which found detached units appreciating at a rate 5.5 points higher than attached units. Home price increases are now colliding with rising interest rates and the principal and interest (P&I) payments required to purchase the average priced home with a 20 percent down payment and a 30-year mortgage rose 32 percent from December 2020 to an all-time high of $1,454 per month. This payment requires 25.8 percent of the median household income compared to 22.4 percent a year earlier. Twenty-five percent is the long-term pre-Great Recession average payment to income ratio, meaning the current payment represents the worst affordability since 2008.

February 7, 2022 Housing News Affordability Worsens as Price Gains Re-Accelerate Black Knight did not publish a Mortgage Monitor in January, so the new issue looks at the mortgage market at the end of 2021 into the early days of 2022. The company says that home price growth, which showed signs of cooling in the summer and fall of... (read more) Housing News Census Bureau Reports Little Change in Homeownership Rates The U.S. Census Bureau says the nation’s homeownership rate was essentially unchanged through 2021. While it dipped 0.3 percentage point from the fourth quarter of 2021, was at 65.6 percent in Q1 and finished the year at 65.5 percent. The Midwest r... (read more) Rob Chrisman Jumbo Buyer Wanted; Secondary, Sales, Origination, Processing Tools; Jumbo News Around the Industry While brokers have taken note of UWM suing America’s MoneyLine for sending loans to Rocket and Fairway (remember UWM’s policy plainly stated last March), this week I head to Florida, which retirees humorously refer to as “God’s waiting room.” The sta... (read more) Mortgage Rates Mortgage Rates Leap Toward 4.0%, Highest Since October 2019 Rates have been trending higher in fits and starts since August 2020, but the mortgage market was insulated from much of the pain due to its disconnect from Treasuries in 2020 (they typically correlate very well). 2021 saw the correlation return despite a few divergences due to things like mortgage-specific fee changes. By the end of 2021, both Treas... (read more) 30 Yr. Fixed Rate 3.87% +0.02% Rate Change Points Mortgage News Daily 30 Yr. Fixed 3.87% +0.02 0.40 15 Yr. Fixed 3.13% +0.01 0.40 30 Yr. FHA 3.50% 0.00 0.00 30 Yr. Jumbo 3.43% +0.01 0.00 5/1 ARM 3.67% -0.01 0.00 Updates Daily - Last Update: 2/7 15 Yr. Fixed Rate 3.13% +0.01% Rate Change Points Freddie Mac 30 Yr. Fixed 3.55% 0.00 0.80 15 Yr. Fixed 2.77% -0.03 0.70 5/1 Yr. ARM 2.71% +0.01 0.30 Updates Weekly - Last Update: 2/3 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 3.78% +0.06 0.41 15 Yr. Fixed 3.01% +0.01 0.41 30 Yr. Jumbo 3.59% +0.03 0.31 Updates Weekly - Last Update: 2/2 MBS / Treasuries MBS Live Recap: Uneventfully Holding Near Long-Term Rate Highs Uneventfully Holding Near Long-Term Rate Highs This morning's commentary centered on last Friday's dark horse market mover (the overseas central bank announcements from the previous day). That helps us reconcile a surprisingly big reaction to the jobs report. Heading into the new week, European bonds rema... (read more) UMBS 30YR 3.0 101.50 +0.08 Price / Yield Change MBS UMBS 3.0 101.50 +0.08 UMBS 3.5 103.73 +0.05 GNMA 3.0 101.73 +0.03 GNMA 3.5 103.13 0.00 Pricing as of: 2/7 5:21PM EST 10 Year US Treasury 1.9159 +0.0002 Price / Yield Change US Treasury 2 YR Treasury 1.294 -0.022 5 YR Treasury 1.767 -0.007 7 YR Treasury 1.892 0.000 10 YR Treasury 1.916 +0.000 30 YR Treasury 2.219 +0.006 Pricing as of: 2/7 5:21PM EST Latest Video January housing sentiment at its lowest level since May 2020 Mohamed El-Erian on whether economy can handle seven Fed rate hikes It doesn't make sense to hike rates and not deal with the balance sheet, sa... Rate hikes won't fix supply chain issues, says Bryn Talkington Around the Web CNBC A record low number of consumers say now is a good time to buy a home CNBC Seven hikes? Fast-rising wages could cause the Fed to raise interest rates even higher this year Calculated Risk Blog Housing Inventory February 7th Update: Inventory Down 5.9% Week-over-week; New Record Low Reuters U.S. on the road to 1950s-style unemployment, but it may only be a pit stop Fannie Mae Housing Sentiment Drifts Lower as Affordability Constraints Sharpen CNBC Aging homes with higher values could help Home Depot and Lowe's ring up sales this spring Reuters European, U.S. bond yields jump, Wall Street shares rise Calculated Risk Blog Six High Frequency Indicators for the Economy CNBC Treasury yields slip back after strong surge on U.S. jobs data Reuters Exclusive-Biden to sign executive order boosting rights of 200,000 construction workers CNBC Here's where the jobs are in one chart Reuters European bond yields soar on tightening talk, U.S. stock futures dip CNBC European markets choppy as investors digest U.S. jobs data, central bank moves in region

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