National Foreclosure Nightmare Coming to an End?
The number of new foreclosure filings in August hit its lowest level in nearly eight years, according to RealtyTrac, an online marketer of foreclosed properties.
Soaring home prices and a big decline in underwater borrowers — those who owe more on their mortgage loans than their homes are worth — have helped drive the trend.
August’s initial foreclosure filings fell 44% to 55,575, just below the 56,063 that were recorded in October 2005. The foreclosure crunch began in summer 2006, at about the same time that housing prices hit their peak.
“This is a strong indicator that the crisis is over,” said Daren Blomquist, vice president at RealtyTrac. “The foreclosure floodwaters have receded in most parts of the country, although lenders and communities continue to clean up the damage left behind,” he added.
The mopping-up process continues, however. In August, for example, the number of homes repossessed by lenders rose 6%, compared with July, to 39,277. But that still represents a drop of 25% year-over-year, and is more than 60% below the peak of repossessions in September, 2010.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +36 basis points from last Friday’s close which caused 30 year fixed rates to move slightly lower from the prior week. MBS traded in a very tight range all week.
Mortgage backed securities were effectively “trapped” in a very narrow trading channel that was capped by our 10 day moving average which prevented any sustainable rallies towards better pricing. We had a mixed bag of economic data which kept us trading in a tight range. We had a very strong 10 year Treasury auction but the demand for our 30 year Treasury bond auction was not as strong. We had a very low Initial Weekly Jobless Claims report, but the Labor Department said it was inaccurate.
Retail Sales did improve but came in lighter than market expectations. Business Inventories improved but were offset by a much weaker than expected Consumer Sentiment Index.
The bottom line is that there simply wasn’t enough negative or positive economic data to break MBS out of their trading channel which resulted in some very tame rate movement.
|Date||ET||Economic Release||Actual||Market Expects||Prior|
|16-Sep||8:30 AM||Empire Manufacturing||–||9||8.6|
|16-Sep||9:15 AM||Industrial Production||–||0.50%||0.00%|
|16-Sep||9:15 AM||Capacity Utilization||–||77.80%||77.60%|
|17-Sep||8:30 AM||Core CPI||–||0.20%||0.20%|
|17-Sep||9:00 AM||Net Long-Term TIC Flows||–||NA||-$66.9B|
|17-Sep||10:00 AM||NAHB Housing Market Index||–||59||59|
|18-Sep||7:00 AM||MBA Mortgage Index||–||NA||-13.50%|
|18-Sep||8:30 AM||Housing Starts||–||910K||896K|
|18-Sep||8:30 AM||Building Permits||–||943K||943K|
|18-Sep||10:30 AM||Crude Inventories||–||NA||-0.219M|
|18-Sep||12:30 PM||FOMC Rate Decision||–||NA||0.25%|
|18-Sep||2:00 PM||FOMC Rate Decision||–||0.25%||0.25%|
|19-Sep||8:30 AM||Initial Claims||–||340K||292K|
|19-Sep||8:30 AM||Continuing Claims||–||2880K||2871K|
|19-Sep||8:30 AM||Current Account Balance||–||-$100.0B||-$106.1B|
|19-Sep||10:00 AM||Existing Home Sales||–||5.30M||5.39M|
|19-Sep||10:00 AM||Philadelphia Fed||–||9||9.3|
|19-Sep||10:00 AM||Leading Indicators||–||0.60%||0.60%|
|19-Sep||10:30 AM||Natural Gas Inventories||–||NA||NA|
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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