Mortgage applications increased 4.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 23, 2018. The Market Composite Index, a measure of mortgage loan application volume, increased 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 8 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 39.4 percent of total applications from 38.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.0 percent of total applications. The FHA share of total applications decreased to 9.9 percent from 10.3 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.
GDP jumps to 2.9%, stocks mixed
GDP grew by 2.9% according to the third revision, above the previously reported 2.5%, while surpassing the Thomson Reuters analyst consensus of 2.7%. The final reading on fourth-quarter GDP was a slight moderation from the third-quarter’s brisk 3.2% pace. For 2017, economic growth was 2.3%, well above the 1.5% experiences in 2016. Traders also digested the latest home sales data, which showed pending home sales snapped back in much of the country in February, with the National Association of Realtors’ Pending Home Sales Index increasing by 3.1% to 107.5. this data as well as an upcoming reading on home sales to try and pull stocks higher following Tuesday’s session which saw the Dow’s early triple-digit gain turn into a triple-digit loss. The Dow posted a triple-digit advance out of the gate while the Nasdaq Composite and S&P 500 were flat. Tuesday saw a topsy-turvy session, as technology shares took a hit on concerns about future regulation. The Dow was up by 244 points at one point, only to reverse course, plunging by 300 points as technology names such as Twitter and Facebook dragged on the market. The sell-off came a day after the Dow recorded its best single-day point gain since 2008 on fading fears of a U.S.-China trade war.
NAR – pending home sales reverse course in February, rise 3.1 percent
Pending home sales snapped back in much of the country in February, but weakening affordability and not enough inventory on the market restricted overall activity compared to a year ago, according to the National Association of Realtors. The Pending Home Sales Index grew 3.1 percent to 107.5 in February from a downwardly revised 104.3 in January. Even with last month’s increase in activity, the index is 4.1 percent below a year ago. Lawrence Yun, NAR chief economist, says the housing market has gotten off to an uneven start so far in 2018. “Contract signings rebounded in most areas in February, but the gains were not large enough to keep up with last February’s level, which was the second highest in over a decade (112.1)1,” he said. “The expanding economy and healthy job market are generating sizeable homebuyer demand, but the miniscule number of listings on the market and its adverse effect on affordability are squeezing buyers and suppressing overall activity.” Added Yun, “Expect ongoing volatility in the Northeast region at least through March. Although pending sales there bounced back in February following January’s cold weather-related decline, the multiple winter storms over these last few weeks likely put a chill on contract signings once again this month.”
With the start of the spring buying season in full swing, Yun believes that one of the top wild cards for the housing market in coming months will be how both buyers and potential sellers adjust to the steady climb in mortgage rates since late last year. Prospective buyers continue to feel the strain of swift price growth – up 5.9 percent so far in 2018 – and the higher borrowing costs will only add to the pressures placed on their budget. Meanwhile, more would-be sellers deciding to balk at listing their home for sale out of uneasiness of losing their low mortgage rate – especially if they refinanced in recent years – would not be good news for any alleviation of the ongoing supply shortages in much of the country. “Homeowners are already staying in their homes at an all-time high before selling2, and any situation where they remain put even longer only exacerbates the nation’s inventory crunch,” said Yun. “Even if new home construction starts picking up at a faster pace this year, as expected, existing sales will fail to break out if these record low supply levels do not recover enough to meet demand.” For the year, Yun now forecasts for existing-home sales to be around 5.51 million – flat from 2017. The national median existing-home price is expected to increase around 4.2 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent. The PHSI in the Northeast surged 10.3 percent to 96.0 in February, but is still 5.1 percent below a year ago. In the Midwest the index inched forward 0.7 percent to 98.9 in February, but is 9.5 percent lower than February 2017. Pending home sales in the South rose 3.0 percent to an index of 125.7 in February, but are 1.5 percent lower than last February. The index in the West climbed 0.4 percent in February to 96.9, but is 2.2 percent below a year ago.
Will Buffett rescue GE?
General Electric’s (GE) shares jumped by the most in three-years on Tuesday amid a rumor that Warren Buffett could take a stake in the ailing industrial conglomerate. As reported by Bloomberg, an analyst at William Blair & Co. said the sudden increase in GE’s share price on Monday is due to chatter that that Buffett is interested in a position in the company.“It may be a plausible theory, given Buffett had recently spoken to the press that he might be interested in GE at the right price,” Nicholas Heymann said in a telephone interview with Bloomberg. Buffett has previously stated that he would be interested in GE or its assets for the right price. If it ends up being true, it won’t be the first time that Buffett has invested in the company. He helped inject capital into the company during the financial crisis, but in February he noted that his Berkshire Hathaway had mostly sold its GE stock. The latest 13f filing for Berkshire Hathaway shows no new positions in GE. GE’s share were climbing on Tuesday, but the stock’s value still reflects the financial struggles the company has been facing. Year-to-date shares are down almost 22% while over the past 12 months they have declined by almost 54%.
MBA – MBA releases 2017 rankings of commercial/multifamily mortgage firms’ origination volumes
According to a set of commercial/multifamily real estate finance league tables prepared by the Mortgage Bankers Association (MBA), the following firms were the top commercial/multifamily mortgage originators in 2017:
PNC Real Estate
JP Morgan Chase & Company
CBRE Capital Markets, Inc.
Capital One Financial Corp.
Meridian Capital Group
Walker & Dunlop.
The MBA study is the only one of its kind to present a comprehensive set of listings of 131 different commercial/multifamily mortgage originators, their 2017 volumes and the different roles they play. The MBA report, Commercial Real Estate/Multifamily Finance Firms – Annual Origination Volumes, presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. By dollar volume, the top five originators for third parties in 2017 were:
CBRE Capital Markets, Inc.
PNC Real Estate
Meridian Capital Group.
The top five lenders in 2017 were:
JP Morgan Chase & Company
Capital One Financial Corp.
Bank of America Merrill Lynch.
Ten different companies were at the top of the 11 lists reporting total originations by investor groups:
– Deutsche Bank Securities, Inc., JP Morgan Chase & Company, and Eastdil Secured were the top originators for commercial mortgage-backed securities (CMBS)
– PNC Real Estate, JP Morgan Chase & Company, and Key Bank were the top originators for commercial bank loans
– HFF, MetLife Investment Management, and PGIM Real Estate Finance were the top originators for life insurance companies
– Walker & Dunlop, Berkadia, and Wells Fargo were the top originators for Fannie Mae
– CBRE Capital Markets, Inc., Walker & Dunlop, and Berkadia were the top originators for Freddie Mac
– Greystone, Red Mortgage Capital, LLC, and Berkadia were the top originators for FHA/Ginnie Mae
– TH Real Estate, CBRE Capital Markets, Inc., and HFF were the top originators for pension funds
– HFF, CBRE Capital Markets, Inc., and Marcus & Millichap Capital Corporation were the top originators for credit companies
– Eastdil Secured, Capital One Financial Corp., and Meridian Capital Group were the top originators for REITS, Mortgage REITS, and Investment Funds
– JLL, PCCP, and Walker & Dunlop were the top originators for specialty finance;
Wells Fargo, HFF, and Deutsche Bank Securities Inc. were the top originators for the “other investors” category