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At Fagone Mortgage Co. we deliver the absolute best lending experience through knowledge, communication, and passion for the home ownership experience.
Our mission supports the growth and strength of our communities and provides a pathway to the dream of home ownership.
Black Knight released its Mortgage Monitor report today--always a treasure trove of robust housing/mortgage-related data. Of particular interest this time around is the ongoing price declines seen in Black Knight's Home Price Index (HPI)--especially as they relate to the recent FHFA HPI data that influenced new conforming loan limits. To be clear, today's HPI from Black Knight is for October whereas last week's FHFA HPI data was for September. It's nonetheless interesting because the sort of full-fledged price rebound seen in the FHFA data (Q3 miraculously came in slightly HIGHER than Q2) is nowhere to be found in any of the other data. NOTE: FHFA's own monthly HPI data suggested declining values in Q3 but the conforming loan limit is based on expanded quarterly data which includes more lower priced homes which would indeed be less likely to show the same level of price declines as higher value homes. Disclaimers aside, the notion of higher prices in Q3 vs Q2 doesn't jive with any of the other data. The point of comparing Black Knight's latest data to FHFA is simply to illustrate the mystery can't simply be chalked up to timing. That said, the Black Knight data agrees that price declines have begun to slow. In the month of October, the HPI fell 0.43%, but in seasonally adjusted terms, the decline was only 0.13%. That makes October the best month since prices began declining in July. This took the annual appreciation rate down to 9.3% (still exceptionally high) from 10.6% in September.
October saw contracts to purchase existing homes fall for the fifth straight month. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI) lost another 4.6 percent during the month, declining from 79.5 in September to 77.1. This is 37.0 percent lower than its reading in October 2021 when it hit a recent peak of 125.2. It has posted only one increase (0.7 percent) since then. [pendinghomesdata] “October was a difficult month for home buyers as they faced 20-year-high mortgage rates,” said NAR Chief Economist Lawrence Yun. “The West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain. The upcoming months should see a return of buyers , as mortgage rates appear to have already peaked and have been coming down since mid-November.” Contract signings were lower in three of the four major regions compared to the prior month. They were significantly lower in all four regions on an annual basis. The index for the Northeast lost 4.3 percent from its September level. At 68.7, it was 29.5 percent lower than a year earlier. The Midwest index rose 3.3 percent to 83.5 but has declined 32.1 percent since October 2021. The South’s reading, 90.6, was 6.4 percent lower for the month and down 38.2 percent from the prior year. The PHSI in the West sank 11.3 percent to 55.6. This was down 46.2 percent year-over-year.
Thanksgiving had its usual effect on the mortgage market during the week ended November 25, although the third week of easing interest rates helped move the volume of purchase mortgage applications higher. The Mortgage Brokers Association (MBA) said its Market Composite Index, a measure of application volume, decreased 0.8 percent on a seasonally adjusted basis from the prior week. Results were adjusted to account for the holiday-shortened week. The unadjusted index dropped by 33 percent. The Refinance Index decreased 13 percent from the previous week and was 86 percent lower than the same week one year ago. Applications for refinancing constituted 26.1 percent of the total, down from 28.4 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index gained ground for the fourth straight week , increasing 4 percent from one week earlier. The unadjusted Purchase Index was 31 percent lower than the prior week and down 41 percent year-over-year. [purchaseappschart] “Mortgage rates declined again last week, following bond yields lower. The 30-year fixed mortgage rate decreased to 6.49 percent and has now fallen 57 basis points over the past four weeks,” Joel Kan, MBA’s Vice President and Deputy Chief Economist said. Additionally, mortgage rates for most other loan types declined,” “The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes,” he continued. “Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity. Refinance applications fell another 13 percent, and the refinance share of applications was at 26 percent. Both measures were at their lowest levels since 2000.”