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Mark Hemingway

Mortgage Market Update for March 13th

Thursday, March 14, 2019 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Inflation at the wholesale level edged slightly higher in February led by higher gas prices though inflation remains contained. The February Producer Price Index (PPI) and Core rate both rose month-over-month by 0.1% just below the 0.2% expected further strengthening the low inflation environment. The Core PPI strips out volatile food and energy costs. The year-over-year numbers edged lower. Delayed January Durable Orders rose 0.4% versus the -0.6% expected.

Mortgage rates edged lower in the latest week and remain just below year ago levels ahead of the critical spring buying season. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage dipped three basis points to 4.64%, FHA down five basis points to 4.61% while the jumbo rate rose four basis points to 4.45%. Those rates do carry at least an average 0.50 in points. The MBA reports that the refinance index was essentially unchanged while the purchase index increased 4.3%. In addition, the average purchase loan size rose to a survey high of $326,000 in the latest week.

Fannie Mae released its Home Purchase Sentiment Index (HPSI) showing a slight decrease after the gains seen in January. The index fell 0.4 points to 84.3 in February due in part to a decline in the net share of Americans who reported substantially higher household income compared to the same time last year which was offset by an increase in the job confidence component. "The HPSI held steady in February, as consumers' continuing optimism about economic conditions seems to be balanced with softening attitudes toward the housing market," said Doug Duncan, senior vice president and chief economist at Fannie Mae.

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