Waterman Bank

My Mortgage Team @ Waterman Bank

We deliver the absolute best lending experience through knowledge and reliable service for your home mortgage needs.

Our Mission

Our team's mission is to help our clients and their families get the best residential mortgage banking options offered. We educate anyone we work with so understanding the decisions that are made puts everyone we work in the most financially strategic position they can be in.

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Mortgage News

Mortgage Applications Technically Improve

November 20 2024

First thing's first, mortgage applications increased last week, both for purchases and refinances! It was the first improvement for refi demand since mid September, when rates were well into their lowest levels in more than 2 years.  Top tier conventional 30yr fixed rates were being quoted at around 6% at the time, but moved rapidly up to 7%+ in the first 3 weeks of October. The resulting drop in refi demand was as logical as it was unfortunate, and it didn't really let up until 2 weeks ago.  Since then, last week saw only a microscopic decrease which, in turn, paved the way for this week's microscopic increase.  In the bigger picture, the refinance index remains in the lowest territory in decades. The Purchase Index is actually in a similar boat.  In fact, we'd need to go even deeper into the past to see demand at current levels.  The key difference is that there wasn't any interesting rate-driven bump in the past few months.  Purchases apps simply ground to a halt by late 2023 and haven't done much since then. Other highlights from MBA's weekly application update: Refi share of total activity: 41%, up from 39.9 previously FHA share: 16.6% vs 16.0 previously VA share: 13.6% vs 13.3 previously Average contract rate (30yr fixed) 6.90 vs 6.86 Orig/Points up to 0.7 from 0.6 Jumbo rates were 0.13% higher than conventional and FHA rates .22% lower

Two Ways to Look at Residential Construction Slowdown

November 19 2024

The most common interval for scheduled economic data is "monthly."  That means that things like inflation, sentiment, job counts, unemployment, retail sales, and many other economic metrics are updated and released every month, even when nothing very interesting is happening. On that note, there are several regularly scheduled housing related reports.  This month's installment of New Residential Construction is today's example and, as you may have guessed, nothing very interesting is happening.   At a glance details: Housing Starts (1st phase of actual construction) 1.311 million annual pace vs  1.33m forecast, 1.353m previously Building Permits 1.416m vs 1.430m forecast, 1.425m previously Neither measurement stands out on a longer term chart.  Both have dialed back from the long-term highs seen between late 2020 and early 2022, but both remain in strong territory relative to 2019.  This is the first way to view the slowdown in construction. The other way to view the slowdown is to focus solely on the slowdown in greater detail and attempt to connect it to another variable.  That ends up being fairly easy if we merely consider the massive rate spike that coincided with the rapid contraction in building permits. In not so many words, construction metrics have been bouncing around their current levels ever since mortgage rates spiked to the 6-8% range. This isn't to say that interest rates are the exclusive reason for the slowdown, but the rate spike coincides with other headwinds.  Those include things like affordability, labor costs, machinery/material costs, and financing costs for builders.

Like Many Housing Metrics, Builder Confidence is Just Waiting For Lower Rates

November 18 2024

Historically low interest rates may not have guaranteed historically high levels of housing activity, but exceptionally high rates have definitely muted activity in a measurable way.  We've cataloged this incessantly when it comes to refinance activity, but there's a correlation with home sales as well.  The Housing Market Index (HMI) from the National Association of Homebuilders is just another way to see it. A de facto measurement of builder confidence/sentiment, the HMI had been flying high (all time highs, actually) shortly after the initial covid lockdowns.  At the time, rates were at all-time lows and pent-up buying demand was being unleashed.  Notably, that level of confidence was achieved despite housing starts only being about 2/3rds of their 2005 peak. Just as notable, as seen in the chart above, housing starts merely fell back to levels there were still higher than most of 2019 (a time when builder confidence was fairly close to all-time highs). So why would builder confidence swoon so much more than the activity level in the homebuilding sector would suggest? If the title and intro wasn't a giveaway, we'll make it clear: RATES!  We could review a chart of rates compared to builder confidence, but that would look like an ink blot test with each line moving in opposite directions.  Instead, the chart below uses the price of mortgage-backed-securities (MBS)--the bonds that dictate mortgage rates.  The convenience of MBS in this context is that they'll move exactly like mortgage rates, but in the inverse (thus allowing us to more easily see the correlation between rate movement and the confidence swan dive).

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