Washington Weekly Update - January 30, 2017

January 27, 2017

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January 30, 2017

Market Reports

Fannie Mae released the January 2017 Economic and Housing Outlook. Despite a strong year-end performance, economic growth is projected to increase by 2 percent. Mortgage rates are predicted to rise gradually in the coming year, ultimately reaching a fourth quarter average of 4.3 percent.

Results of Freddie Mac’s Primary Mortgage Market Survey (PMMS) show mortgage rates increased for the first time in 2017. The 30-year fixed-rate mortgage (FRM) averaged 4.19 percent for the week ending January 26th. This time last year, the FRM averaged 3.79 percent. The 15-year FRM averaged 3.40 percent for the week. Year-over-year, the 15-year FRM averaged 3.07 percent.

Mortgage applications increased during the week ending January 20th, according to the Mortgage Bankers Association (MBA).  The Weekly Mortgage Applications Survey saw a 4 percent increase in total mortgage applications.  The Refinance Index increased 0.2 percent and the unadjusted Purchase Index increased 2 percent.  The refinance share of total mortgage applications decreased to 50 percent last week.

The Federal Housing Finance Agency (FHFA) House Price Index increased 0.5 percent in November. The previously reported 0.4 percent increase in October was revised downward to a 0.3 percent increase. From November 2015 to November 2016, house prices were up 6.1 percent.

The FHFA Index reported mortgage rates increased in December. The average interest rate on all mortgage loans was 3.91 percent, up 27 basis points from 3.64 in November. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.08 percent, up 28 basis points from 3.80 in November.

The US Department of Labor announced last week that initial unemployment insurance claims  increased from the previous week ending January 21, 2016.  The four-week moving average was 259,000 an increase from last week’s average.  The insured unemployment rate was 1.5 percent for the week ending January 14, unchanged from the previous week’s unrevised rate.

The Conference Board’s Leading Economic Index (LEI) for the U.S. increased. The LEI for the U.S. increased 0.5 percent in December to 124.6. The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.3 percent in December to 114.3. The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in December to 123.4.

CFPB

The Consumer Financial Protection Bureau (CFPB) ordered Citi subsidiaries to pay $28.8 million for giving the runaround to borrowers trying to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief. The CFPB is requiring CitiMortgage to pay an estimated $17 million to compensate wronged consumers, and pay a civil penalty of $3 million; and requiring CitiFinancial Services to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million.

HUD

The U.S. Department of Housing and Urban Development (HUD) announced agreements with two insurance companies. Two insurance companies in Florida and Ohio allegedly violated the Fair Housing Act by denying insurance coverage to properties that contain subsidized housing and low income housing.

HUD and the Census Bureau reported new residential sales in December. Sales of new single-family houses in December 2016 were at a seasonally adjusted annual rate of 536,000. This is 10.4 percent below the revised November rate of 598,000 and is 0.4 percent below the December 2015 estimate of 538,000. The median sales price of new houses sold in December 2016 was $322,500; the average sales price was $384,000.