Here is what was at the top of the headlines for the mortgage industry this past week:

 

1. New Home Sales Surge 25.4% in October

Sales of new single-family houses in October 2013 were at a seasonally adjusted annual rate of 444,000, according to
estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 25.4 percent (±19.2%) above the revised September rate of 354,000 and is 21.6 percent (±15.6%) above the
October 2012 estimate of 365,000.
The median sales price of new houses sold in October 2013 was $245,800; the average sales price was $321,700. The
seasonally adjusted estimate of new houses for sale at the end of October was 183,000. This represents a supply of 4.9
months at the current sales rate.

 

2. Small Markets Leading Way for 2014 Recovery

Smaller metropolitan areas appear to be leading the country in a return to normal levels of economic and housing activity the National Association of Home Builders (NAHB) said today (the 4th).  The associations Leading Markets Index, product in conjunction with First American Title Insurance, shows 54 metropolitan areas are currently operating above the LMI’s baseline level and NBHA says “most of them” are what are considered small markets.  The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide market is running at 86 percent of normal economic and housing activity.

NAHB tracks 350 metro areas for its index which replaces the older Improving Markets list.  The index uses the same data bases as Improving Markets; employment information from the Bureau of Labor Statistics, home prices provided by Freddie Mac, but shifts the focus from identifying markets that have recently begun to recover to identifying areas that are approaching and exceeding previous normal levels of economic and housing activity.

Each market is scored by taking its average permit, price, and employment levels for the past 12 months and dividing each by its annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

3. Foreclosure Inventory Falls to 5 Year Low

Lender Processing Services (LPS) said today that the national foreclosure pre-sale inventory is at its lowest level since 2008.  The inventory, the number of loans that are in some stage of foreclosure, now represents 2.54 percent of mortgaged homes.  The rate dropped 3.23 percent from September to October and is nearly 30 percent below its level in October 2012.  There are now 1.276 million homes in the inventory.

The information was included in LPS’ regular preview of its monthly Mortgage Monitor.  The Monitorpresents loan-level information from the LPS database representing approximately 70 percent of the mortgage marketThe full report will be published by December 9.

LPS said in October there were 3.152 million mortgage loans that were 30 or more days past due but not yet in foreclosure, adelinquency rate of 6.28 percent.  This is a decrease of 2.80 percent since September and 10.69 percent year-over-year.   Of these delinquent loans, 1.283 million are seriously delinquent, that is 90 or more days past due but not yet in foreclosure.

 

4. Mortgage Rates Almost Perfectly Flat Ahead of Jobs Report

Mortgage rates were almost perfectly flat today  (December 5th), despite moderate weakness in bond markets.  This is largely a factor of yesterday’s weakness and the fact that it coincided with the morning rate sheets.  While some lenders did undergo price improvements yesterday afternoon, they were generally conservative with more important data yet to come.  The most prevalently quoted rate for an ideal Conforming 30yr Fixed loan (best-execution) remains at 4.625%.

Tomorrow is the big day–the mighty Employment Situation Report (aka the “jobs report,” NFP, Payrolls, etc).  As always, this is the biggest potential market mover of any given month in terms of economic data, even during times where it’s not seen as a critical component in Fed policy decisions.  So the fact that financial markets see a strong jobs report as prompting the Fed to reduce asset purchases sooner than later, makes this instance extra important.