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Despite the Federal Reserve’s efforts to curb inflation, mortgage rates fell in November, but low-interest rates weren’t enough to convince homebuyers to lock up their mortgages in the market due to high volatility.
Dollar-specific volume fell 21.5% month-on-month in November, remaining at its lowest level since February 2019, according to Black Knight’s Origination Market Watch report.
Total foreclosure volumes are down 39% in the past three months and 68% year-over-year.
The decline was driven across the board by lock-in purchases, which fell 22%, reflecting the strong effects of the season, the long Thanksgiving weekend, and the lack of housing stocks in the UK.
Funding activity continued to decline at double-digit rates over the past month, with delinquencies down 86% and rates/terms down 93% from November 2021. Knight.
Mortgage rates fell in November on what the market viewed as positive inflation news, said Scott Happ, president of Optimal Blue, a division of Black Knight.
However, falling rates were not enough to trigger higher rates of lockdown activity.
The spread between mortgage rates and the 10-year Treasury yield narrowed 13 points to 283 basis points during the month, a sign that investors and lenders may be looking to mitigate the impact of interest rates the lowest and the highest.
But despite the increase in tariffs, the lockdown process is still pending. The producer price index – the price businesses pay for goods and services – rose 7.4% in November, from a revised 8.1% rise in October.
The Consumer Price Index – which measures the prices U.S. consumers pay for goods and services – is released on Tuesday and will be one of the indicators the Fed is targeting for a rate hike this week. .
Interest rates and wind energy continue to challenge mortgage lending, with the share of dollar foreclosures down 37% in the past three months and more than 50% through November 2021.
The foreclosure rate – which excludes the impact of rising house prices – is down 48% year-on-year and 27% from pre-pandemic levels in 2019, stable for purchase and commercial refinance rate/term. Home prices fell 1.3% month over month to $414,000 and average mortgages fell 2.2% to $340,000 in November.
Happ also said that in general, we should expect a drop in activity in early November; we are also seeing significant headwinds in buying related to ongoing debt issuances and a refinancing market that has fallen to non-existent levels.
Inventories nearly doubled from a year ago, combined to undermine recent gains in house prices and falling interest rates from an energy perspective.
Reference Source: Housing Wire
