January 19 2022

The Mortgage Bankers Association (MBA) has initiated a new monthly Loan Monitoring Survey , to replace its Weekly Forbearance and Call Volume Survey which it published weekly from the start of the pandemic through December 1. The new report covers both forbearances and loan delinquencies for the month of December. At the end of the reporting period MBA estimated that 750,000 loans remained in forbearance, 1.41 percent of mortgages in servicer portfolios. This is a 26-basis point decline over the course of the month. By stage, 23.2 percent of total loans in forbearance were in the initial forbearance plan stage, while 63.1 percent were in an extension . The remaining 13.7 percent are forbearance re-entries, including re-entries with extensions. The share of Fannie Mae and Freddie Mac (GSE) loans in forbearance decreased 8 basis points to 0.68 percent during the month and Ginnie Mae (FHA and VA) loans fell 47 basis points to 1.63 percent. The share of forborne loans among those serviced for bank portfolios and private-label securities (PLS) declined 51 basis points to 3.43 percent.  “The share of loans in forbearance continued to decline in December 2021. This was especially the case for government and private-label and portfolio loans, as those loans have higher levels of forbearance than loans backed by Fannie Mae and Freddie Mac,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “With the number of borrowers in forbearance continuing to decrease below 750,000, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020.”  

January 19 2022

Residential construction numbers exceeded expectations again in December. Most of the gains, however, came from the multifamily sector. The U.S. Census Bureau and the Department of Housing and Urban Development reported that permits for residential construction were up 9.1 percent from November to a seasonally adjusted rate of 1.873 million units, the highest of the year and 6.5 percent above the rate a year earlier. The November permitting rate was revised from 1.712 million to 1.717 million. Single-family permits rose 2.0 percent to 1.128 million units from 1.106 million in November, a slight upper revision from the 1.103 million units first reported for the month. Single-family authorizations were 8.5 percent lower than in December 2020. Multifamily permits rose 19.9 percent to 675,000 units, a 41.8 percent year-over-year improvement. There was also an unusual increase in permitting for two-to-four-unit dwellings. The 70,000-unit annual permitting rate represented a 45.8 percent increase from November and 42.9 percent on an annual basis. On an unadjusted basis, permits were issued for 152,000 residential units during the month, 81,300 of them single-family units. In November, the respective numbers were 131,800 and 80,400. For the entirety of 2021 there were 1.725 million construction permits issued compared to 1.471 the prior year, a gain of 17.2 percent. Single-family permits grew 13.4 percent to 1.111 million and the 562,100 multifamily permits represented an annual increase of 26.4 percent. [housingpermitschart]

January 19 2022

Interest rates for fixed rate mortgage products shot up by at least a dozen basis points during the week ended January 14, still the volume of purchase mortgages rose significantly and, while refinancing declined, it still accounted for the bulk of application activity. The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of mortgage loan application volume, i ncreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index rose 3 percent. The Refinance Index did fall 3 percent compared to the week ended January 7 and was 49 percent lower than the same week one year ago. The refinance share of mortgage activity slipped to 60.3 percent of total applications from 64.1 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index jumped by 8 percent from the prior week and was up 14 percent before adjustment. Applications were down 13 percent year-over-year. [purchaseappschart] “Mortgage rates hit their highest levels since March 2020 , leading to the slowest pace of refinance activity in over two years. The 30-year fixed rate reached 3.64 percent and has increased more than 30 basis points over the past two weeks. FHA and VA refinance declines drove most of the refinance slowdown,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite the increase in rates, purchase applications jumped almost 8 percent, with conventional purchase applications accounting for much of the stronger activity. The average loan size for a purchase application set a record at $418,500. The continued rise in purchase loan application sizes is driven by high home price appreciation and the lack of housing inventory on the market – especially for entry-level homes. The slower growth in government purchase activity is also contributing to the larger loan balances and suggests that prospective first-time buyers are struggling to find homes to buy in their price range.”