Mortgage applications decreased 9.7% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 15, 2017. Last week’s results included an adjustment for the Labor Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 9.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12% compared with the previous week. The Refinance Index decreased 9% from the previous week. The seasonally adjusted Purchase Index decreased 11% from one week earlier. The unadjusted Purchase Index increased 10% compared with the previous week and was 2% higher than the same week one year ago. The refinance share of mortgage activity increased to 52.1% of total applications from 51.0% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8% of total applications. The FHA share of total applications remained unchanged at 9.9% from the week prior. The VA share of total applications decreased to 10.1% from 10.3% the week prior. The USDA share of total applications remained unchanged at 0.7% from the week prior.
Oil set for biggest 3Q rise since 2004, Iraq hints at OPEC extension
Oil headed for its largest third-quarter gain in 13 years as prices rose on Wednesday after the Iraqi oil minister said OPEC and its partners are considering extending or deepening output cuts aimed at reducing a global supply glut. Brent crude futures rose 64 cents to $55.78 a barrel by 1330 GMT, while US West Texas Intermediate (WTI) crude futures gained 52 cents to $50.00. The oil price is on course for a rise of nearly 16% this quarter, which would make this year’s performance the strongest for the third quarter since 2004. “With oil prices steadily appreciating, as investors become increasingly optimistic over OPEC’s effort to stabilize the saturated markets, the cartel should be encouraged to extend the current deal, which may fuel the upside,” FXTM analyst Lukman Otunuga said. The Organization of the Petroleum Exporting Countries and other producers are considering a range of options, including an extension of cuts, but it is premature to decide on what to do beyond the agreement’s expiry in March, Iraqi oil minister Jabar al-Luaibi told an energy conference on Tuesday. OPEC and non-OPEC producers including Russia have agreed to reduce output by about 1.8 million barrels per day (bpd) until March to reduce global oil inventories and support prices. Some producers think the pact should be extended for three or four months, others want it to run until the end of 2018, while some, including Ecuador and Iraq, think there should be another round of supply cuts, al-Luaibi said. Analysts, however, doubt that such an extension would have much of an impact on the overall oil market. “I can’t see the market tightening unless OPEC cuts output further next year,” said Commerzbank strategist Carsten Fritsch. US crude stocks rose last week while gasoline and distillate stocks decreased, according to the American Petroleum Institute on Tuesday.
NAR – existing-home sales subside 1.7% in August
Existing-home sales stumbled in August for the fourth time in five months as strained supply levels continue to subdue overall activity, according to the National Association of Realtors (NAR). Sales gains in the Northeast and Midwest were outpaced by declines in the South and West. Total existing-home sales, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 1.7% to a seasonally adjusted annual rate of 5.35 million in August from 5.44 million in July. Last month’s sales pace is 0.2% above last August, and is the lowest since then. The median existing-home price for all housing types in August was $253,500, up 5.6% from August 2016 ($240,000). August’s price increase marks the 66th straight month of year-over-year gains. Total housing inventory at the end of August declined 2.1% to 1.88 million existing homes available for sale, and is now 6.5% lower than a year ago (2.01 million) and has fallen year-over-year for 27 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.5 months a year ago. Properties typically stayed on the market for 30 days in August, which is unchanged from July and down from 36 days a year ago. Fifty-one% of homes sold in August were on the market for less than a month. Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in August were San Jose-Sunnyvale-Santa Clara, Calif., 29 days; Seattle-Tacoma-Bellevue, Wash., 30 days; Vallejo-Fairfield, Calif., 31 days; and San Francisco-Oakland-Hayward, Calif., and Salt Lake City, Utah, both at 32 days.
First-time buyers were 31% of sales in August, which is down from 33% in July and is the lowest share since last August (also 31%). NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35%. According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage fell to 3.88% in August from 3.97% in July and is the lowest since November 2016 (3.77%). The average commitment rate for all of 2016 was 3.65%. All-cash sales were 20% of transactions in August, up from 19% in July but down from 22% a year ago. Individual investors, who account for many cash sales, purchased 15% of homes in August, up from 13% in July and 12% a year ago. Distressed sales – foreclosures and short sales – were 4% of sales in August, down from 5% both in July and a year ago. Three% of August sales were foreclosures and 1% were short sales. According to President William E. Brown, a Realtor® from Alamo, California, the housing market continues to recover from the depths of the financial crisis. However, the significant household wealth many homeowners have accumulated in recent years through rising home values could be at risk if any of the proposed tax provisions follow through with attempts to marginalize the mortgage interest deduction and eliminate state and local tax deductions. “Consumers are smart and know that any attempt to cap or limit the deductibility of mortgage interest is essentially a tax on homeownership and the middle class,” said Brown. A study commissioned by NAR found that under some tax reform proposals, many homeowners with adjusted gross incomes between $50,000 and $200,000 would see an average tax increase of $815, along with home values shrinking by an average of more than 10%. An even steeper decline would be seen in areas with higher property and state income taxes. Congress must keep homeowners in mind as it looks towards tax reform this year.”
Single-family home sales decreased 2.1% to a seasonally adjusted annual rate of 4.74 million in August from 4.84 million in July, but are still 0.4% above the 4.72 million pace a year ago. The median existing single-family home price was $255,500 in August, up 5.6% from August 2016. Existing condominium and co-op sales climbed 1.7% to a seasonally adjusted annual rate of 610,000 units in August, but are still 1.6% below a year ago. The median existing condo price was $237,600 in August, which is 5.4% above a year ago. August existing-home sales in the Northeast jumped 10.8% to an annual rate of 720,000, and are now 1.4% above a year ago. The median price in the Northeast was $289,500, which is 5.6% above August 2016. In the Midwest, existing-home sales rose 2.4% to an annual rate of 1.28 million in August, and are now 0.8% above a year ago. The median price in the Midwest was $200,500, up 5.0% from a year ago. Existing-home sales in the South decreased 5.7% to an annual rate of 2.15 million in August, and are now 0.9% lower than a year ago. The median price in the South was $220,400, up 5.4% from a year ago. Existing-home sales in the West fell 4.8% to an annual rate of 1.20 million in August, but are still 0.8% above a year ago. The median price in the West was $374,700, up 7.7% from August 2016.
UPS expects to hire about 95,000 workers for holiday season
– UPS said it expected to hire about 95,000 employees for the holiday season.
– The announcement marks the company’s fourth straight year of seasonal hiring during the holidays.
– The seasonal employees would start in November and work through January, UPS said.
Package delivery company United Parcel Service said it expected to hire about 95,000 seasonal employees for its crucial peak holiday season for the fourth straight year. These employees would support the expected increase in package volume that will begin in November and continue through January, UPS said on Wednesday. Peak season begins on Black Friday, the day after the Thanksgiving holiday in November, and runs through to early January when there is a large wave of returns.
NAHB – housing production holds steady in August
Nationwide housing starts fell 0.8% in August to a seasonally adjusted annual rate of 1.18 million units, according to newly released data from the US Department of Housing and Urban Development and the Commerce Department. Single-family production rose 1.6% in August to a seasonally adjusted annual rate of 851,000 after a downwardly revised July reading. Year-to-date, single-family starts are 8.9% above their level over the same period last year. Multifamily starts dropped 6.5% to 329,000 units after an upward July revision. “This month’s report shows that single-family starts continue to move forward at a gradual, consistent pace,” said NAHB Chief Economist Robert Dietz. “The three-month average for single-family production has reached a post-recession high, but the months ahead may show volatility given that the building markets affected by Hurricanes Harvey and Irma represent about 14% of national production.” “We are paying close attention to the communities affected by these hurricanes, and are helping them start on the rebuilding and restoration process,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. Regionally in August, combined single- and multifamily housing production rose 22.0% in the Midwest and 4.0% in the West. Starts fell 7.9% in the South and 8.7% in the Northeast. Overall permit issuance in August was up 5.7% to a seasonally adjusted annual rate of 1.30 million units. Single-family permits edged down 1.5% to 800,000 units while multifamily permits rose 19.6% to 500,000. Regionally, overall permits rose 15.3% in the West, 8.8% in the Midwest and 3.7% in the South. Permits fell 13.0% in the Northeast.
Corelogic – reports a 16.9% year-over-year increase in mortgage fraud risk in the second quarter of 2017
– New York overtakes florida as the state with the highest overall fraud risk
– Florida dropped to number 3 state rank because of 3% decrease in application fraud risk year over year
– Iowa had the largest year-over-year increase in fraud risk
CoreLogic released its latest Mortgage Fraud Report. As of the end of the second quarter of 2017, the report shows a 16.9% year-over-year increase in fraud risk, as measured by the CoreLogic Mortgage Application Fraud Risk Index. The analysis found that during the second quarter of 2017, an estimated 13,404 mortgage applications, or 0.82% of all mortgage applications, contained indications of fraud, as compared with the reported 12,718, or 0.70% in the second quarter of 2016.The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk the mortgage industry is experiencing each quarter. CoreLogic develops the index based on residential mortgage loan applications processed by CoreLogic LoanSafe Fraud Manager™, a predictive scoring technology. The report includes detailed data for six fraud type indicators that complement the national index: identity, income, occupancy, property, transaction, and undisclosed real estate debt. “This past year we saw a relatively large increase in the CoreLogic National Mortgage Application Fraud Index,” said Bridget Berg, principal, Fraud Solutions for CoreLogic. “If the factors that influenced the increase continue, including a shift to purchase transactions and growing wholesale channel origination activity, it is likely that mortgage application fraud risk will continue to rise as well. Fraud on cash-out refinance transactions and home equity loans may become more of a factor in the coming years as home values and equity rise.”
– New York is the state with the highest level of application fraud risk. Florida, which held the top spot for the last several years, dropped to number 3, thanks to a 3% decrease in application fraud risk from 2016.
– States with the greatest year-over-year growth in risk include Iowa, Indiana, Missouri, Louisiana and Idaho. Although they have the highest growth in risk, except for Louisiana, the other four states are still outside the top 25 in terms of overall risk.
– Jumbo refinance loans are the segment showing the greatest fraud risk increase by loan type.
– Occupancy, Transaction and Income fraud types showed increases year-over-year, with the greatest increase in Occupancy fraud risk at 7.0%.