Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
President Trump also said he is "not looking for a partial deal" with Beijing, moving away from his suggestion last week that he would consider an "interim deal."Politicsread more
Progress on trade talks will determine how far market will move above new highs.Trader Talk with Bob Pisaniread more
"Sure, the trade war's taking its toll on business ... it's just not taking its toll where it was supposed to," Jim Cramer says.Mad Money with Jim Cramerread more
Joe Biden called on President Donald Trump Friday to release the transcript of a call with a foreign leader that is the subject of a whistleblower complaint. Biden described...Politicsread more
For investors taking a breather from the chaos in August, buckle up as the market is about go crazy again, Goldman Sachs warned.Marketsread more
Palantir Technologies is targeting a valuation of at least $26 billion in a private fundraising round, the first for the Peter Thiel-backed data analytics startup in four...Wall Streetread more
Michael Pack, a conservative filmmaker linked to Steve Bannon, saw at least $1.6 million in donations from his nonprofit sent into the coffers of his independent production...Politicsread more
The New England Patriots released Antonio Brown just 11 days after signing the wide receiver. The NFL Super Bowl champion team initially had kept him in the face of a rape...Sportsread more
A tour bus carrying Chinese-speaking tourists crashed near a national park in southern Utah, killing at least four people and critically injuring up to 15 others, authorities...U.S. Newsread more
Home prices are high, listings are lean and potential buyers are frustrated. There is plenty of demand, but it is not translating into home sales. Mortgage applications dropped 2.5 percent last week, seasonally adjusted, according to the Mortgage Bankers Association. The weakness was driven entirely by a lack of buyers. Total volume was 12 percent lower than the same week one year ago.
Mortgage applications to purchase a home fell 5 percent for the week and were just 1 percent higher compared with a year ago. Home prices continue to rise at more than twice the rate of income growth, and bidding wars are the rule rather than the exception for entry-level homes. New buyers are clearly struggling, and that is apparent in the type of loans for which they are applying.
“The mix of business changed, with FHA purchase volume increasing as conventional and VA volume decreased,” noted Mike Fratantoni, chief economist at the MBA. “This indicates that more first-time buyers are entering the market, even as the market as a whole continues to be restricted by tight inventories of homes available for sale.”
FHA mortgages are government insured. They offer down payments as low as 3.5 percent but also require mortgage insurance, which adds to the monthly cost. FHA loans have long been the preference of first-time buyers, who may have lower credit scores.
The type of loan a borrower choses can make a far bigger difference in the monthly payment than the weekly moves in interest rates, which were basically flat last week anyway. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.77 percent from 4.76 percent, with points increasing to 0.46 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Mortgage rates have not moved much at all in the past month, which may be why refinance applicants are not doing much either. Applications did move 2 percent higher for the week but they were still 28 percent lower compared with the same week one year ago, when interest rates were lower. Refinance volume has been anemic for more than a year as so many homeowners refinanced several years ago when the average rate on the 30-year fixed was in the 3 percent range rather than the 4 percent range.
The refinance share of mortgage activity increased to 36.5 percent of total applications from 34.8 percent the previous week.
The critical shortage of homes for sale is not improving that much, although more homes are coming on the market now. Inventory is still significantly lower than a year ago, and what is available is usually expensive.