Here is what was at the top of the headlines for the mortgage industry this past week:
1. New Home Applications Rose 11 Percent
Applications for mortgages to purchase newly constructed homes jumped by 11 percent in October compared to September. Texas, Florida and California led the nation in new home purchase applications and the three saw monthly increases of 9.5 percent, 9.3 percent and 4.6 percent respectively. The figures, reported by the Mortgage Bankers Association (MBA) today, are not seasonally adjusted.
2. Zillow: U.S. Homes Selling 30 Days Faster Than a Year Ago
Nationwide, homes listed for sale on real estate marketplace Zillow® were selling a month faster in September than a year ago, according to a new analysis. In the United States as a whole, homes sold in September spent a median of 86 days on Zillow, down 30 days from 116 days in September 2012.
Among the 30 largest metro markets covered by Zillow in September, homes moved the fastest and spent the fewest days listed on Zillow in the San Francisco Bay Area (48 days); Sacramento, Calif. (59 days); and Dallas (60 days). Homes sold faster this September compared to last September in all 30 of the largest metros. Large metros where homes moved the fastest this year compared to last year include Las Vegas (44 days faster), Sacramento (43 days faster) and San Antonio (37 days faster).
3. Mortgage Credit Availability Increased Slightly in October
Mortgage credit availability increased slightly in October according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs® Market Clarity® product.
The MCAI increased 0.7 percent to 111.5 in October following two consecutive months of decline in August and September. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012. If it had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time.
Mortgage credit loosened slightly in October relative to September. In October, some investors reduced minimum credit scores on certain products. At the same time, other investors reduced the availability of cash-out refinances and limited other programs to primary residences in programs which previously allowed for second and investor homes. The net impact was a slight increase in the index for the mont
4. Yellen Says Economy Performing ‘Far Short’ of Potential
Janet Yellen, nominated to be the next chairman of the Federal Reserve, signaled she will carry on the central bank’s unprecedented stimulus until she sees improvement in an economy that’s operating well below potential.
“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Yellen said in testimony for her nomination hearing before the Senate Banking Committee today in Washington. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”