You would think by the barrage of negative news reports that just about every other home was going into foreclosure. Certainly this is not the case. In fact, the housing market has stabilized in the past six months. The latest report from the Mortgage Bankers Association shows that the percentage of homeowners that were behind at least one monthly payment fell from 9.1% in the third quarter to 8.2% in the fourth quarter. Also, the 2010 delinquency rate fell from over 10% in the beginning of the year to 8.2% at the end of the year.
The 2% drop in mortgage delinquencies follows the recent drop in the Unemployment Rate and the steady increase in Existing Home Sales and Consumer Confidence. These are significant signs that the housing market is closing in on a true market equilibrium.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +39 basis points last week which caused 30 year fixed rates to move lower after reaching their highest levels of 2011 in the prior week. The economic data such as PPI and CPI showed inflationary pressures that consumers pay – which is usually bad for mortgage rates. But the geo-political concerns over continued tensions in the Middle East, specifically the news stories of the Iranian War Ships requesting access to the Suez Canal, caused traders to move their funds into the safety of bonds which temporarily helped mortgage rates.
MICHAEL MCDEVITT 