Mortgage Late Payments Hit Three Year Low
U.S. homeowners are getting better about keeping up with their mortgage payments, driving the percentage of borrowers who have fallen behind to a three-year low, according to a new report.Home prices rose for the fourth month in a row in May, suggesting the recovery in the housing market continued to gain traction.
Some 5.49 percent of the nation’s mortgage holders were behind on their payments by 60 days or more in the April-to-June period, the agency said. That’s the lowest level since the first quarter of 2009.
The second-quarter delinquency rate is down from 5.82 percent in the same period last year, and below the 5.78 percent rate for the first three months of 2012. The positive second-quarter trend coincided with an improving outlook for the U.S. housing market. TransUnion anticipates the mortgage delinquency rate will continue to decline. But it doesn’t see it falling below 5 percent this year.
This is yet another sign that the housing industry is strengthening. Lower mortgage delinquencies is a clear sign that home owners see the housing market improving and are therefore more willing to keep up with their payments to protect any future gains in equity.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -32 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move higher.
We had our highest mortgage rates on Thursday and our lowest on Monday.
We had a mixed bag of economic data with better than expected results for Import Prices, Initial Jobless Claims and Productivity. But had worse than expected results with Unit Labor Costs and Wholesale Inventories.
We also had much weaker than expected demand for our U.S. 10 year note and 30 year bond Treasury auctions. This was reflective of growing optimism that the European Central Bank (ECB) was making inroads towards being able to purchase bonds directly from Spain and Italy.
Remember, the primary reason that mortgage rates are as low as they are is due to the fact that investors keep pouring money into U.S. based bonds because they are want some protection against a potential European collapse.
Many of those same investors that had “parked” their cash in U.S. bonds, are starting to pull their money out as they are feeling better about the potential for some relative stability in the Eurozone if the ECB purchases bonds and props up Spain and Italy. As they cash out of their U.S. positions to chase better yields in Europe, U.S. mortgage rates have risen.
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||Economic Release||Actual||Market Expects||Prior|
|14-Aug||8:30 AM||Retail Sales||–||0.20%||-0.50%|
|14-Aug||8:30 AM||Retail Sales ex-auto||–||0.30%||-0.40%|
|14-Aug||8:30 AM||Core PPI||–||0.20%||0.20%|
|14-Aug||10:00 AM||Business Inventories||–||0.20%||0.30%|
|15-Aug||7:00 AM||MBA Mortgage Index||–||NA||-1.80%|
|15-Aug||8:30 AM||Core CPI||–||0.20%||0.20%|
|15-Aug||8:30 AM||Empire Manufacturing||–||5||7.4|
|15-Aug||9:00 AM||Net Long-Term TIC Flows||–||NA||$55.0B|
|15-Aug||9:15 AM||Industrial Production||–||0.60%||0.40%|
|15-Aug||9:15 AM||Capacity Utilization||–||79.30%||78.90%|
|15-Aug||10:00 AM||NAHB Housing Market Index||–||35||35|
|15-Aug||10:30 AM||Crude Inventories||–||NA||-3.729M|
|16-Aug||8:30 AM||Initial Claims||–||368K||361K|
|16-Aug||8:30 AM||Continuing Claims||–||3300K||3332K|
|16-Aug||8:30 AM||Housing Starts||–||763K||760K|
|16-Aug||8:30 AM||Building Permits||–||770K||755K|
|16-Aug||10:00 AM||Philadelphia Fed||–||-5||-12.9|
|17-Aug||9:55 AM||Mich Sentiment||–||72.2||72.3|
|17-Aug||10:00 AM||Leading Indicators||–||0.20%||-0.30%|
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
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