Summary of Mortgage Finance Weekly - 20 September 2024 Industry Overview - Industry: Mortgage Finance - Key Focus: Trends in mortgage applications, existing home sales, and origination forecasts Core Insights and Arguments 1. Refinance Applications: There was a 24.2% increase in refinance applications week-over-week, indicating a significant uptick in refinancing activity compared to earlier in the year, with a 75% increase in the non-seasonally adjusted 4-week average compared to three months ago [1][1][1] 2. Existing Home Sales: Existing home sales fell 2.5% month-over-month to 3.86 million (SAAR) in August, marking the lowest level in 10 months. The median existing-home sales price increased by 3.1% year-over-year [1][1][1] 3. Mortgage Applications: The MBA purchase index rose 5.4% for the week but showed a 0.6% decline year-over-year, the lowest year-over-year decline since May 2021 [1][1][1] 4. MBS Spreads: Nominal Agency MBS spreads tightened by 7 basis points to 120 bps, which is 12 bps tighter than the long-term average, indicating relatively tight spreads compared to interest rate volatility [1][1][1] 5. Origination Forecasts: Fannie Mae revised its 2024 origination forecast down by 1.1% to 2.16 trillion. The purchase forecast for 2024 and 2025 was lowered by 1.5% and 0.8%, respectively [1][1][1] Additional Important Insights 1. Regional Performance: Existing home sales were particularly weak in the South, which saw a 4.3% decline, while the Midwest performed the best but still experienced flat growth [1][1][1] 2. Housing Starts: Single-family housing starts rose to 992K in August from 857K in July, indicating a rebound likely driven by recovery from Hurricane Beryl's impact [1][1][1] 3. Market Sentiment: The current market sentiment reflects a cautious outlook, with the origination forecast being lower than the MBA forecast for 2024 by 4.3% [1][1][1] 4. Dividend Announcements: Among the mREITs covered, 20 out of 23 announced dividends, with 2 increasing and 4 decreasing, indicating mixed performance in dividend distributions [4][4][4] Conclusion The mortgage finance industry is experiencing a complex landscape characterized by rising refinance activity, declining existing home sales, and cautious origination forecasts. The tightening of MBS spreads and mixed regional performance further complicate the outlook, suggesting a need for careful monitoring of market conditions and potential investment opportunities.
Mortgage Finance Weekly _24% Increase in Refi Applications, Existing Home..._
standard chartered·2024-09-26 16:38