All Things in Moderation

Vital Statistics:

Stocks are higher this morning on no real news. Bonds and MBS are down.

Mortgage credit expanded in November, according to the MBA.

“Credit availability increased slightly in November, the first increase in nine months, as lenders continued to navigate a challenging environment brought on by higher rates and a much slower housing market,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “Jumbo credit availability saw a 4 percent increase, as jumbo rates remained more competitive than rates on conforming loans. Lenders are seeking to capture more volume in this space. Most of last month’s increase came from more ARM loan programs being offered.”

Homebuyer sentiment improved in November, according to the Fannie Mae Home Purchase Sentiment Index. “Both consumer homebuying and home-selling sentiment are significantly lower than they were last year, which, in our view, is unsurprising considering mortgage rates have more than doubled and home prices remain elevated,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Following eight months of consecutive declines, the HPSI did tick up slightly in November but is essentially unchanged since hitting its all-time low last month. Consumers continue to expect mortgage rates to rise but home prices to decline, a situation that we believe will contribute to a further slowing of home sales in the coming months, as both homebuyers and home-sellers have reason for apprehension. We expect mortgage demand to continue to be curtailed by affordability constraints, while homeowners with significantly lower-than-current mortgage rates may be discouraged from listing their property and potentially taking on a new, much higher mortgage rate.”

Foreclosure activity increased 57% YOY, according to data from Attom. “Foreclosure starts in November nearly doubled from last year’s numbers, but are still just above 80 percent of pre-pandemic levels,” Sharga added. “We may continue to see below-normal foreclosure activity, since unemployment rates are still very low, and mortgage delinquency rates are lower than historical averages.”

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