Low rate burnout?

From MarketWatch:

Fannie cuts mortgage-rate outlook, but home buyers may not bite

Mortgage-finance giant Fannie Mae cut its outlook Thursday for home-loan rates in 2015, but cheap monthly payments may do little to bump up residential sales, experts said.

The federally controlled mortgage buyer’s latest housing-market forecast pegged the rate for the popular 30-year fixed-rate mortgage next year at about 4.3%—a drop of two-tenths of a percentage point from Fannie’s prior forecast for the rate in 2015.

While lower rates translate into smaller monthly loan payments, making homeownership more affordable, Fannie FNMA didn’t adjust its forecast for next year’s total home sales.

“The housing market continues to grind its way upward, but we don’t expect a breakout performance in 2015 as the fundamentals remain somewhat muted,” said Doug Duncan, Fannie’s chief economist. “We believe that mortgage activity in 2015 will be very similar to 2014.”

There are (at least) three remarkable mortgage-market trends that are shaping home sales, and some of them are working against each other. First, rates are super low. The latest weekly reading from Freddie Mac showed that the average rate for a 30-year fixed-rate mortgage recently hit 3.99%—a sixth consecutive week of near-4% readings—far below an average of more than 7% over the past three decades.

“This period of low interest rates is extraordinary,” said Susan Wachter, a housing-finance expert at the University of Pennsylvania.

Second, rates have remained in a fairly narrow band for some time. Over the past three years, the rate for a 30-year fixed-rate mortgage has ranged from about 3.35% to almost 4.49%. If Fannie’s Duncan is right, the market won’t see rates climb much higher next year from recent levels.

But another year of low rates may not have much of a positive psychological impact on prospective home buyers, said David Crowe, chief economist at the National Association of Home Builders.

“The relatively lower rates after the spikes of the early 80s did stimulate buying,” Crowe said. “This time around, the low rates are still not as low as they [recently] were so the relative advantage is not as great.”

This entry was posted in Housing Recovery, Mortgages, National Real Estate. Bookmark the permalink.

84 Responses to Low rate burnout?

  1. Comrade Nom Deplume, at Peace With The Trolls says:

    Frist! And last (for me for a while).

  2. anon (the good one) says:

    @EdMorrissey:
    That look on the Giants’ sidelines was Tom Coughlin looking at an offseason searching for a studio gig.

  3. jj says:

    Tom Coughlin Sucks. Put him out to Pasture. And BS greatest catch ever. Meaningless game in a Meaningless season.

    Plaxicos catch was in a Superbowl when he pinned it to the Helmut and Giants won that game.

  4. FKA 2010 Buyer says:

    There are a lot of idiots near St Louis….

    http://kfor.com/2014/11/24/woman-preparing-for-ferguson-unrest-accidentally-shoots-herself-in-the-head/

    A woman appears to have accidentally fatally shot herself in the head with a gun bought to prepare for possible Ferguson-related unrest

  5. FKA 2010 Buyer says:

    GSEs Cut Lenders a Big, Retroactive Break on Reps and Warrants

    http://www.mortgagenewsdaily.com/11212014_gse_reform.asp

    Freddie Mac said that concerns over these exclusions have caused some lenders to impose credit overlays, that is underwriting guidelines such as higher credit scores, more stringent that those required by the GSEs themselves. These overlays may have limited access to mortgages to a number of creditworthy borrowers.

    Under the current framework, the bulk of which applies to loans purchased on or after January 1, 2013, lenders are granted relief from the responsibility of repurchasing a loan under their representations and warranties obligations if the borrower makes 36 months of timely payments on loans (12 months of timely payments on HARP or Refi PlusTM loans) or the loan successfully passes a full quality control review by the respective GSE purchaser.

  6. Michael says:

    4- That sums up that area for you. All you need to know.

  7. Liquor Luge says:

    jj (3)-

    Biggest catch Plax made was a bullet, with his leg.

    “Plaxicos catch was in a Superbowl when he pinned it to the Helmut and Giants won that game.”

  8. Liquor Luge says:

    …and they put a brother in jail on top of that…

  9. Liquor Luge says:

    fka (4)-

    They are just thinning the TSTL herd. Useful event.

  10. joyce says:

    Was this before or after David Tyree shot himself in the club?

    jj says:
    November 24, 2014 at 8:57 am

    Plaxicos catch was in a Superbowl when he pinned it to the Helmut and Giants won that game.

  11. Liquor Luge says:

    When may I begin to riot?

  12. Liquor Luge says:

    Is one person rioting really a riot?

  13. I wonder if they are having any pre-looting door buster sales?

  14. Happy Renter says:

    At this point, I think the grand jury in Ferguson should just wait until Black Friday to release the verdict. This will allow everyone involved to enjoy a riot-free Thanksgiving, to say nothing of the headlines we can look forward to on Saturday.

  15. A Home Buyer says:

    15 – Renter

    Unless they are hoping the holiday season and the need to buy discount iCr@p on Friday puts a hard limit on the rioting time frame?

  16. grim says:

    Did the grand jury even reconvene today? No way we hear anything this week. Not going to happen.

  17. chicagofinance says:

    The End Is Nigh (jj Women’s Grooming Edition):

    The famous J Sisters, the Brazilian sisters who brought the Brazilian bikini wax to New York, and claim to be the favorite of celebs including Cameron Diaz and Naomi Campbell, are about to launch a new service — the “Vag!na Facial” (which will henceforth be dubbed “The Vajaycial”).

    We are told the J Sisters, who have been waxing women at their Midtown salon for more than two decades and were even mentioned in a 2000 “Sex and the City” episode, are this week launching “Gommage Therapy,” which according to those in the know is: “a facial type thing for the area ‘down there,’ and helps deal with cosmetic issues including ingrown hairs.”

    Gommage is a form of exfoliation used during facials, but is not known for being employed on more, ahem, intimate areas.

    And for ladies who want their private parts to look even prettier, we’re told the salon is also launching J Sisters Couture, which “is color and shaping treatment for the same area down there . . . for women of a certain age who are turning gray.”

    Please form an orderly line, ladies.

  18. clotluva says:

    from the leading article:

    “While lower rates translate into smaller monthly loan payments, making homeownership more affordable, Fannie FNMA didn’t adjust its forecast for next year’s total home sales.”

    Lower rates don’t make homeownership more affordable. They make EXISTING DEBT more affordable (assuming the debt can be refinanced).

    Lower rates actually make homeownership LESS affordable, in the sense that they increase the amount of $ people can borrow, which in turn drives up the price. (Of course if you were paying attention, you’d realize the word “price” wasn’t used in the article.)

    But alas, it looks like the price pumpers just exhausted one more tool. Are negative interest rates on tap? Or perhaps an increase in the allowable mortgage interest deduction?

  19. Happy Renter says:

    [20] That is just the latest attempt by libtards to expand the definition as part of the never ending victimhood arms-race . . .

    https://www.youtube.com/watch?v=bwN-rJlTeJs

  20. Xolepa says:

    What about a woman who wears falsies. Or a wig? Can I have her indicted her for that?

  21. grim says:

    But alas, it looks like the price pumpers just exhausted one more tool. Are negative interest rates on tap?

    You make it seem like this is controllable. Who are the “price pumpers”? The Fed? The Fed has a dual mandate. Besides, the Fed doesn’t control mortgage rates.

    Or perhaps an increase in the allowable mortgage interest deduction?

    There is no political appetite to increase the MID.

  22. Fast Eddie says:

    I went to see this one over the weekend. First of all, the agent in the picture, the one with the throwback phone pasted to her ear, was hosting. And believe me, she’s got the mantra down to a science, including asking follow-up questions before the previous question has been answered.

    I’ll sum this one up: The unfinished basement is a 10 X 8 storage area housing the HVAC infrastructure with enough room for a few boxes. I don’t know why this house doesn’t have a basement. It claims to have four bedrooms, three of which could fit a single dresser. There’s very little yard, so much so that the neighbor raking his leaves was practically peeking in the kitchen window.

    It was a clean and well-kept house but zero basement, iddy biddy bedroom size and little yard peering down upon thy neighbor doesn’t warrant the 649K price tag.

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1443519&dayssince=&countysearch=false

  23. clotluva says:

    “Besides, the Fed doesn’t control mortgage rates.”

    No, not directly – but are you claiming that if the Fed raised rates to 7%, mortgage rates would stay below 4%?

    I think it would be safe to say that anyone seeking to get made whole on a serious amount of mortgage debt could be classified as a “price pumper” (GSE’s included).

  24. grim says:

    25 – There’s very little yard, so much so that the neighbor raking his leaves was practically peeking in the kitchen window.

    On a 120×100 lot? That’s almost a third of an acre.

  25. nwnj says:

    #25

    People here have been telling you for years, stop limiting yourself to move-in-ready homes and you’ll find a lot more value. But you’d rather complain.

  26. grim says:

    26 – That’s why I said the Fed has a dual mandate. What part of the current jobs situation would warrant increasing the short term rate to 7%? Why on earth would any central bank purposely invert the yield curve short term (as it would sink any economy into recession).

    Price wishers can wish all they want, but it doesn’t mean they control mortgage rates.

    Remember back post bubble, Fed cut sharply, mortgage rates did not follow in lock step. They may have wanted low rates to stop the burst, but they were powerless to get them.

  27. clotluva says:

    26 cont

    Actually, I would classify anyone who would no longer cheer a good ol’ fashioned “COMP KILLER” or “LOWBALL” as a price pumper.

  28. Juice Box says:

    Grand Jury is back, press conference later..

  29. Fast Eddie says:

    On a 120×100 lot? That’s almost a third of an acre.

    The yard was elevated. It felt like you were on display. And as far as value-packed homes; when seller muppets lower the price to reflect a houses value, not the price they “need” in order to continue to stuff their gullet, I’ll consider. It definitely can be a house that needs an overhaul but I’m not going to live with highway noise, a neighbors rusty cyclone fence reminiscent of a Paterson landscape or some obscure, f.ucked up oddity sporting a price tag that’s absurd.

  30. clotluva says:

    29.

    I’m not saying lockstep, I’m saying that mortgage rates are HIGHLY influenced by Fed rates, i.e. a mortgage rate (or any other lending rate) will typically be Fed rate (or LIBOR etc.) + additional risk.

  31. jj says:

    No Muff To Tough
    The famous J Sisters, the Brazilian sisters who brought the Brazilian bikini wax to New York, and claim to be the favorite of celebs including Cameron Diaz and Naomi Campbell, are about to launch a new service — the “Vag!na Facial” (which will henceforth be dubbed “The Vajaycial”).

    We are told the J Sisters, who have been waxing women at their Midtown salon for more than two decades and were even mentioned in a 2000 “Sex and the City” episode, are this week launching “Gommage Therapy,” which according to those in the know is: “a facial type thing for the area ‘down there,’ and helps deal with cosmetic issues including ingrown hairs.”

    Gommage is a form of exfoliation used during facials, but is not known for being employed on more, ahem, intimate areas.

    And for ladies who want their private parts to look even prettier, we’re told the salon is also launching J Sisters Couture, which “is color and shaping treatment for the same area down there . . . for women of a certain age who are turning gray.”

  32. jj says:

    Conforming loan limits going up in 2015. You can now get yourself in debt for $517,500 in one shot thanks to Uncle Same

  33. clotluva says:

    35.

    “Conforming loan limits going up in 2015. You can now get yourself in debt for $517,500 in one shot thanks to Uncle Sam”

    Thank you Price Pumpers!(TM)

    By the way, the latest Case Shiller NYC Index is at August 2004 levels and rising.

  34. grim says:

    There have been numerous periods during the last two years when nonconforming jumbos were cheaper than conforming mortgages.

  35. Liquor Luge says:

    gary (25)-

    Can’t wait until the day I see a picture of a RE agent with a .45 in her ear instead of a phone.

  36. grim says:

    Decision reached?

  37. Liquor Luge says:

    Some good TV news viewing tonight, I suspect.

    Still haven’t figured out how looting all your neighborhood’s small businesses equals a public outcry for justice, though.

  38. Toxic Crayons says:

    84% of white homicide victims are murdered by whites.

  39. grim says:

    40 – Shut up and give me a TV

  40. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [23] xolepa,

    How about lies about her age? Or that she isn’t seeing anyone?

    This law will collapse of its own weight. Virtually every guy charged under this act will file countercharges for some supposed lie. And why not? Can’t be proven, and that is the really hard part here.

  41. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    How about Throwback Monday??

    http://www.youtube.com/watch?v=1Pevb9LdIy8

  42. Happy Renter says:

    [41] “84% of white homicide victims are murdered by whites.”

    91% of black homicide victims are murdered by blacks.

    Whites make up roughly 72% of the population and 69% of the murderers.
    Blacks make up roughly 13% of the population and 28% of the murderers.

    Blacks are responsible for 14% of murdered whites.
    Whites are responsible for 7% of murdered blacks.

    http://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2013/crime-in-the-u.s.-2013/tables/table-19/table_19_rate_additional_information_about_selected_offenses_by_population_group_2013.xls

  43. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    I think this is the best compilation I found. Made of of stuff I remember that has long since disappeared from the internet.

    Go to the 1:17 mark for the good stuff.

    http://www.youtube.com/watch?v=Nsnuhz-Kb7k

  44. Not Comrade says:

    The Ferguson stuff is the “old” whiteman tea party boomer’s nightmare.

    The one that is really going to kick you in the balls is this:

    http://youtu.be/sH8sSKwS_gU

    Keep buying chinese stuff

  45. Happy Renter says:

    [46] Nom that is great stuff!

  46. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [4] FKA

    That story smells to high heaven. Methinks the cops aren’t buying it.

  47. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [47] not me

    All my guns are american-made. Come over some time, I’ll give you a demonstration.

  48. Juice Box says:

    Meh, picked up some kind of head cold. Tommorow is a good day to stay home.

  49. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    [51] juice,

    So there with ya. Flying this time of year means automatic cold.

    Cincinnati has a hell of a lot of panhandlers in its downtown. Except Sunday because nearly nothing is open. Guess they went home. And I am glad I am nowhere near Over-The-Rhine tonight.

  50. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    Like Clot, I’m gonna make some popcorn and curl up by the TV at 9, and enjoy the show.

  51. Happy Renter says:

    Pants up don’t loot!

  52. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:

    Oh, this is too rich!

    From last week:

    Comrade Nom Deplume, who needs to stop screwing around and get back to work says:
    November 20, 2014 at 8:46 am
    . . . “Citigroup Managing Director Shawn Miller was found Tuesday in the bathtub of his luxurious Greenwich apartment in New York City with his throat cut, authorities said Wednesday.

    The police are investigating the incident, but they are “pretty sure it’s homicide,” a New York Police Department spokesman told CNBC.”

    They are only “pretty sure”. Something tells me that the door is still open for suicide, which seems to be a contagion among oligarchs these days.

    And today:

    “The death of Citigroup banker Shawn Miller on Tuesday is being investigated as a suicide, rather than homicide, according to the New York Daily News.”

    It is seriously starting to sound like The International out there.

  53. Well, Duh! Look at where they live. Homicidal white people don’t like to commute very far, which proves they are not racist. They just want to kill, and like their upbringing, they want convenience.

    84% of white homicide victims are murdered by whites.

  54. Grim says:

    Sounds like the St Louis mayor heard the decision.

    Nice move waiting until 9.

  55. I hope they keep delaying it for another 60 days.

  56. Can they declare a hung grand jury and keep pushing it out?

  57. Grim says:

    Shocked to hear so many witnesses lied.

  58. Liquor Luge says:

    grim (42)-

    Brother needs to go steal him a TV.

    “Shut up and give me a TV”

  59. Comrade Nom Deplume, Guardian of the Realm says:

    Obama looked pissed at first.

  60. Comrade Nom Deplume, Guardian of the Realm says:

    Ugh, soapbox time.

  61. Liquor Luge says:

    Sailors fighting in the dance hall
    Oh man! Look at those cavemen go
    It’s the freakiest show
    Take a look at the lawman
    Beating up the wrong guy
    Oh man! Wonder if he’ll ever know
    He’s in the best selling show
    Is there life on Mars?

  62. Liquor Luge says:

    woops moderated don’t know why

  63. Grim says:

    Riots, tear gas, looting, broken windows, gun shots, nice.

  64. Happy Renter says:

    And the rockets’ red glare;
    The bombs bursting in air …

  65. Grim says:

    Smashed in the windows of a Chinese food restaurant with bricks.

  66. Liquor Luge says:

    Looting = justice. Only in Amerika.

  67. Liquor Luge says:

    …waiting for Sharpton to toss gasoline on the fire…

    You can usually set your watch to the timing of the race-baiters.

  68. Grim says:

    The tear gas backdrop of the Seasons Greetings sign is particularly festive.

  69. Grim says:

    Nice! Tried to light up a police car.

  70. Comrade Nom Deplume, Guardian of the Realm says:

    More importantly, are the Jets now mathematically eliminated from the postseason?

  71. Happy Renter says:

    Our very own antifada; just in time for the holidays!

  72. Happy Renter says:

    Anyone else notice the bike lane?

  73. Grim says:

    Beauty World apparently a hot spot as Black Friday door busters start early

  74. Grim says:

    Nice they lit up a cruiser

  75. Comrade Nom Deplume, Guardian of the Realm says:

    [75] renter

    LOL, I did and thought of this place.

  76. chicagofinance says:

    Am I wrong? It appeared that the vast majority of the NYC protestors were white…..

  77. Comrade Nom Deplume, who needs to stop screwing around and get back to work says:
  78. Grim says:

    Burned ferguson to the ground.

  79. anon (the good one) says:

    @NewsBreaker:
    “The situation in Ferguson speaks to the broader challenges we still face as a nation.”
    -President Obama

  80. anon (the good one) says:

    @ShaunKing:
    The government story is this: Mike Brown gets shot, runs 148 feet away, and then decides to kill himself by running into a hail of bullets.

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