The housing market this week saw an increase in foreclosure filings and a continued rise in mortgage rates reflected in a surge in search engine inquiries from sellers looking to sell their properties.
Mortgage front line
Freddie Mac(OTCMKTS:FMCC) reported that the average yield on 30-year fixed-rate mortgages stood at 5.89% as of Sept. 8, up from last week’s average yield of 5.66%. 15-year fixed-rate mortgages averaged 5.16%, up from last week’s average of 4.98%.
And the average yield on 5-year Treasury indexed hybrid floating rate mortgages was 4.64%, up from last week’s average yield of 4.51%.
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Freddie Mac chief economist Sam Cater said: “Mortgage rates have risen again as markets continue to manage a more aggressive monetary policy outlook due to rising inflation.
“Not only are mortgage rates rising, interest rate spread is widening, suggesting that borrowers can reap big returns by shopping for better rates.
Our research shows that borrowers can save an average of $1,500 over the life of a loan by obtaining one additional rate quote, and an average of approximately $3,000 if five quotes are obtained. is shown. ”
While mortgage rates continue to rise, mortgage applications have fallen for the fifth straight week, to the lowest level in 22 years.
The Mortgage Bankers Association Market Composite Index for the week ending September 2 was down 0.8% on a seasonally adjusted basis from the previous week, but was down 2% on an unadjusted basis. The unadjusted refinancing index was 83%, down 1% from the previous week.
“Mortgage rates rose last week as markets continued to reassess the economic outlook and the direction of monetary policy, short-term rates rose, and expectations that they would continue to rise over the longer term,” said Mike Fratantoni. ‘ said. MBA Senior Vice President and Chief Economist.
“Application volumes for both purchase and refinancing loans declined as 30-year fixed rates rose to their highest level since mid-June. A strong job market, as shown in August data, should support housing demand, although it is likely to prevent a decline.
Although there are no signs yet of a rebound in purchase requests, a strong job market and rising home inventories should eventually increase purchase activity. ”
At the forefront of home ownership
A total of 34,501 US properties were seized last month, according to new data from ATTOM. That’s a 14% increase from the previous month and a 118% increase from a year ago.
Lenders began foreclosure proceedings last month on 23,952 properties, up 12% from July 2021 and 187% from August 2021. In August 2022, one of his 4,072 homes nationwide received a foreclosure application.
The state with the highest foreclosure rate was Illinois (1 for every 1,926 residential units with foreclosure filings). Delaware (1 in 2,387). South Carolina (1 in 2,417 homes). New Jersey (1 in every 2,441 residential units); and Florida (1 in 2,950 residential units).
Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, said:
“Although August foreclosure starts were 86% of the number of foreclosure starts in August 2019, it is important to remember that foreclosure activity was still relatively low compared to historical averages.”
The data and analytics division of Black Knight Inc. (NYSE:BKI) said the median home price fell 0.77% from June, the biggest one-month decline since January 2011, and the year-on-year growth in home prices. reported a turnaround from a slowdown in July.
More than 85% of the 50 largest US markets are at least slightly off their July peak, and more than a tenth are down 4% or more.
“House prices fell 0.77% in July after 31 consecutive months of gains,” Graboske said. “House price inflation is still over 14% per annum, but in a market as volatile and rapidly changing as it is today, such a backward-looking indicator overshadows a more current and pressing reality. It can be misleading because it can be hidden.”
“As well,” Graboske added. July.
Tappable equity has fallen 5% over the past two months, and Q3 could see the first quarterly decline in tappable equity since 2019. ”
And as the housing market moves away from being a seller’s market, more and more sellers are looking for information and selling their properties online.
Luxury real estate platform RubyHome has shared an analysis of Google (NASDAQ:GOOG) (NASDAQ:GOOGL) search data, revealing that searches for “sell my home” have increased 147% in the United States. As of July 2022 – Highest level in US internet history. for America.
The top 10 states where people want to sell their home are Mississippi, Connecticut, Virginia, Wyoming, Florida, Iowa, New Mexico, North Carolina, New York and Kentucky.