July 2012

TheMReport — News and strategies for the evolving mortgage marketplace.

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MONTH IN REVIEW Statistical reports present a volatile snapshot of the current marketplace, while one industry organization turns its attention to Wall Street. May 30 Mortgage Applications Trend Downward June 11 Survey Reveals Borrowers' Biggest Barrier to Homeownership Feelings about homeownership remain positive in the face of a di- minished market, but an uncertain economy and increasing down payments are keeping Americans from making purchases, a report from Integra Realty Resources (IRR) said. The company's recent report detailed results from an IRR-commissioned survey of non-homeowners ages 22–50 in 11 major markets. While 85 percent of potential buyers indicated that market conditions are favorable for purchasing a home, unemploy- ment and job instability make many respondents reluctant or unable to buy one. June 7 Mortgage Rates Race to New Lows As the employment situation con- tinues to raise concerns, fixed rates fell even lower, slipping yet again to record lows, according to a survey from Freddie Mac. The 30-year fixed-rate mortgage averaged 3.67 percent (0.7 point) for the week ending June 7, falling from an aver- age of 3.75 percent the previous week. Last year at this time, the 30- year fixed was 4.49 percent. "Fixed mortgage rates reached new record lows for the sixth consecu- tive week as long-term Treasury bond yields declined further follow- ing downwardly revised economic growth and job creation data," said Frank Nothaft, VP and chief econo- mist for Freddie Mac. 14 | THE M REPORT June 2 Initial Jobs Claims on the Decline First-time claims for unemployment insurance fell to 377,000 for the week ended June 2, from the prior week's upwardly revised 389,000, the Labor Department reported. Economists had expected the report would show 379,000 initial claims. The drop in claims was the first in five weeks. The four-week stretch of increases was the longest since October–November 2008. Continuing claims—reported on a one-week lag—rose 34,000 to 3,293,000, the highest level in six weeks. The previous week's total of continuing claims, 3,259,000, was revised up from the previously reported 3,242,000. May 31 Ellie Mae Announces Shift to NYSE Ellie Mae has received authoriza- tion to transfer its common stock to the New York Stock Exchange (NYSE). The Pleasanton, California-based mortgage net- work and software provider was given authorization from NYSE Regulation, Inc., to transfer the listing of its common stock from the NYSE MKT, formerly NYSE Amex, where it has traded since its initial public offering in April last year. Until Ellie Mae's common stock begins trading on the NYSE, it will remain on the NYSE MKT. "Trading on the New York Stock Exchange is an important mile- stone in our progress as a public company," Ellie Mae CEO Sig Anderman said in a statement. Despite record-low mortgage rates, mortgage applications fell 1.3 percent during the week ended May 25, according to the Mortgage Bankers Association (MBA).The trade group found that mortgage loan application volume declined by a seasonally adjusted 1.3 percent. The Refinance Index was down by 1.5 percent from the week before, with declines on the way for the seasonally adjusted Purchase Index by 0.6 percent. The same index slid by a seasonally unadjusted 1.8 percent. Analysts with Keefe, Bruyette & Woods fielded expectations that refinance activity will continue to stay high in an environment with low interest rates fueled by the Home Affordable Refinance Program. May 25 Home Pricing Statistics Face Off The Case-Shiller Home Price Indexes fell for the seventh straight month in March, and while the drop in the broader 20- city index was barely noticeable, the 10-city index fell to 146.61 from 146.74. Year-over-year, the 10-city index was down 2.8 percent and the 20-city index off 2.6 percent, improving from February. Meanwhile, the National Association of Realtors (NAR) reported simultaneously released data from April that heralded longer-term improvements in pricing. According to NAR, the median price of an existing home climbed 10.1 percent to $177,400 from $161,100 in April 2011, the strongest year-to-year gain since January 2006. The median price in April reached its highest level since July 2010 when it was $182,100.

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