November 22, 2010 | US Virgin Islands Real Estate Blog

US Virgin Islands Real Estate Blog

November 22, 2010

Mortgage Deliquency Rate Falls:
The U.S. mortgage delinquency rate declined last quarter as the employment picture brightened.  The Mortgage Bankers Association reported that the rate of delinquency on single-family homes for the third quarter fell 0.72% from the previous quarter for a reading of of just 9.13%.

The media coverage of the housing market would lead most to assume that almost every house is in foreclosure and that most mortgages are delinquent or in foreclose.  This is far from true.  Certainly a delinquency rate of 9.13% is higher than what any banker wants to see, but it also means that  90.87% of all mortgages are paid on time.  And with businesses adding 151,000 jobs last month and Initial Jobless Claims continuing to fall, we appear to be on firmer ground.

What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -59 basis points last week causing 30 year fixed rates to increase from the previous week.  This is after the prior week’s -147 basis point sell off. The Federal Reserve’s $600 billion Quantitative Easing II plan was in effect for the second straight week and the longer term bonds such as MBS are not a big fan.  MBS have sold off -122 basis points since the first day of their Treasury purchase program which has pressured mortgage rates upward.

What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises:

Date ET Release For
23-Nov 8:30 GDP – Second Estimate Q3
23-Nov 8:30 GDP Deflator – Second Estimate Q3
23-Nov 10:00 Existing Home Sales Oct
23-Nov 14:00 Minutes of FOMC Meeting 3-Nov
24-Nov 7:00 MBA Mortgage Applications 19-Nov
24-Nov 8:30 Personal Income Oct
24-Nov 8:30 Personal Spending Oct
24-Nov 8:30 PCE Prices – Core Oct
24-Nov 8:30 Durable Orders Oct
24-Nov 8:30 Durable Orders -ex transportation Oct
24-Nov 8:30 Initial Claims 20-Nov
24-Nov 8:30 Continuing Claims 13-Nov
24-Nov 9:55 Michigan Sentiment – Final Nov
24-Nov 10:00 New Home Sales Oct
24-Nov 10:00 FHFA Home Price Index (q/q) Q3
24-Nov 10:30 Crude Inventories 20-Nov

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

Matthew Schaffer
Sr. Loan Officer
Office: 561-799-9954
Cell: 561-312-1094

3307 Northlake Blvd #103
Palm Beach Gardens, FL 33403

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