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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

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

Americans seeing profit margins slide from home sales

April 29,2023 | By ERICKSON J OCASIO

Homeowners are taking a "significant hit" from housing market slowdown. With the benefit of hindsight, millions of US homeowners inclined to sell would have been better off doing it last spring. The average profit margin on the sale of median-priced single-family homes and condos fell to 44% last quarter, from a peak of 56% in the second quarter of 2022, according to data published Thursday by Attom, a real estate analytics firm. The numbers cover homes in metro areas with a population of 200,000 or more. US housing prices have been under pressure as the Federal Reserve jacked up borrowing costs. Benchmark rates for 30-year fixed mortgages have been above 6.5% for most of this year, roughly double what they were at the end of 2021, pushing monthly payments sharply higher. “Homeowners are starting to take a significant hit in the form of lost profits from

Rise in rates leads to another decline in US mortgage applications

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

Americans seeing profit margins slide from home sales

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