Category: Mortgage Rates

Existing homes sales posted the second consecutive increase in July after breaking out of a slump in June that had endured for four months. The National Association of Realtors®, (NAR) said sales of pre-owned single-family houses, town houses, condominiums, and cooperative apartments rose to a seasonally adjusted annual rate of 5.99 million units in July, a 2.0 percent increase from the June rate of 5.87 million and 1.5 percent higher than the pace in July 2020. Sales of single-family homes rose 2.7 percent month-over-month to a seasonally adjusted annual rate of 5.28 million but were 0.8 percent lower than a year earlier. Condo and co-op sales fell, from a 730,000 rate in June to 710,000 in July, a decline of 2.7 percent. Those sales, however, were 22.4 percent higher year-over-year.

Fannie Mae’s economists provided a mixed forecast this month. The baseline view of the company’s Economic and Strategic Research (ESR) group is for the recent virus surge to drag modestly on consumers’ services consumption in the near term and modestly worsen supply chain disruptions abroad, but they don’t think it will prevent solid growth in the current quarter. They do note early signs of modest behavioral changes on the part of consumers and companies. For example, a high frequency measure of restaurant reservations has recently pulled back slightly, and several airlines are reporting an uptick in customer flight cancellations. The most recent measure of the University of Michigan Consumer Confidence survey also declined dramatically, suggesting the COVID upswing is weighing on sentiment. Anecdotally, reports of employers delaying reentry to office work and cancelling in-person events and conferences are growing.

The federal foreclosure moratoria expired at the end of July and, with some 1.45 million borrowers seriously delinquent on their mortgages but not in foreclosure, Black Knight says, “potential foreclosure activity in the coming months warrants close observation.” The majority of those seriously delinquent mortgages, however, are still in active forbearance plans.

The company, in its “first look” at July’s mortgage performance data, notes that, aside from this concern, overall mortgage delinquencies are down by nearly half since May 2020 and have improved in 12 of the last 14 months.

The national delinquency rate declined by 114,000 loans or 5.22 percent in July and is now at 4.14 percent of all mortgage loans. A total of 2.206 million loans are 30 or more days past due, down by 1.486 million year-over-year.