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Rise in rates leads to another decline in US mortgage applications

August 6,2023 | By ERICKSON J OCASIO

Another week brings a new low for purchase mortgage applications. US mortgage applications fell for the second straight week, with purchase activity declining to its lowest level since June. The Market Composite Index – the Mortgage Bankers Association’s gauge of application volume – posted a 3% drop during the week ending July 28. Both refinance and purchase application volumes were also down 3% on a seasonally adjusted basis, driven by a six-basis point rise in the contract interest rate for 30-year mortgages. “Mortgage rates edged higher last week, with the 30-year fixed mortgage rate’s increase to 6.93% and leading to another decline in overall applications,” said Joel Kan, MBA’s deputy chief economist. “The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inven

Why are clients' credit scores dropping?

July 15,2023 | By ERICKSON J OCASIO

New report shows why those all-important numbers are slipping for some. ?Credit reporting company TransUnion has just released a report with a dull title “Score Migration Impact to the Credit Ecosystem,” but some interesting observations – it appears that we are seeing a nationwide drop in credit scores. The study reveals that although clients’ credit scores experienced a significant boost during the initial stages of the COVID-19 pandemic, thanks to government assistance programs, reduced credit usage, and forbearance options for loan payments, some of those consumers who transitioned to higher credit score ranges are now facing higher delinquency rates compared to historical data for those risk tiers. The rise in credit scores can be attributed to two key factors. Firstly, individuals benefited from lower credit balances and utilization due to reduced spending

Big banks face higher capital requirements from regulators

July 12,2023 | By ERICKSON J OCASIO

The looming overhauls arrive amidst ongoing economic uncertainty. Major banks are facing one of the biggest regulatory overhauls since the financial crisis, setting up a clash over the amount of capital that they have to set aside to weather tumult. The Federal Reserve’s top banking regulator, Michael Barr, said he wants Wall Street banks to start using a standardized approach for estimating credit, operational and trading risks, rather than relying on their own estimates. He added that the Fed’s annual stress tests should be rejiggered to better capture dangers that firms can face. The changes stem from a months-long review to align US rules with a set of international standards known as Basel III. Industry titans have long fought against higher capital requirements, and the issue became a political lightning rod after several lenders including Silicon Valley B

Home price gains ease to lowest level in 11 years

July 12,2023 | By ERICKSON J OCASIO

Several states even recorded annual home price losses. CoreLogic’s Home Price Index fell for the 12th consecutive month in May as rising mortgage rates continue to deter aspiring homebuyers. Single-family home price growth slowed to a 1.4% year-over-year pace in May, according to CoreLogic, but appreciation remained positive for the 136th straight month. The last time the index saw annual growth decline to less than 2% was 11 years ago. “After peaking in the spring of 2022, annual home price deceleration continued in May,” CoreLogic chief economist Selma Hepp said. “Despite slowing year-over-year price growth, the recent momentum in monthly price gains continues in the face of recent mortgage rate increases.” T

Home price gains ease to lowest level in 11 years

July 12,2023 | By ERICKSON J OCASIO

Why there's more trouble coming for regional banks

June 12,2023 | By ERICKSON J OCASIO

They are under serious pressure. The stock market is growing more sanguine about US regional banks, but the lenders still face serious pressure. A credit “contraction is invariably coming,” Soros Fund Management Chief Executive Officer Dawn Fitzpatrick said at this week’s Bloomberg Invest conference, adding that additional banks will fail because “there are more problems under the surface.” One further source of trouble for the industry will be commercial real estate, an area that in recent years smaller and regional banks have become a bigger force in. Working from home has cut into office values and almost $1.5 trillion of commercial property debt is due for repayment before the end of 2025. Meanwhile, rising interest rates have made many properties less valuable. “US ban

Home equity downturn persists for the second straight quarter

May 5,2023 | By ERICKSON J OCASIO

Home equity downturn persists for the second straight quarter "The best of the boom may be behind us". Almost half of US mortgaged homes were considered equity-rich in the first quarter, according to the findings of ATTOM's new home equity and underwater report. About 47.2% of mortgage residential properties were equity-rich in Q1, slightly down from 48% in Q4 2022. This drop marked the second consecutive quarterly decline in home equity, following 10 straight increases. "The equity downturn, small as it was, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom," CoreLogic noted in the report. "It comes as home-seller profits have slid to their lowest point in two years." Meanwhile, 3% of mortgaged homes, or one in three, we

Rise in rates leads to another decline in US mortgage applications

Why are clients' credit scores dropping?

Big banks face higher capital requirements from regulators

Home price gains ease to lowest level in 11 years

Home price gains ease to lowest level in 11 years

Why there's more trouble coming for regional banks

Home equity downturn persists for the second straight quarter

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