Walden Mortgage Weekly Newsletter
Posted by Ashley Whitworth on Monday, February 11, 2013 at 7:51:34 PM By Ashley Whitworth / February 11, 2013 Comment
Another Sign Of Housing Strength - Taking Equity Out Again:During the housing boom of the last decade Americans withdrew over $1 trillion in home equity. They did it through cash-out refinances, home equity loans, and home equity lines of credit. The latter allowed them to use their homes like an ATM. They spent the money on cars, televisions, vacations and fancy home upgrades. It was seemingly endless equity, until suddenly that equity was gone. But the Home Equity Line of Credit (HELOC) is back and millions of homeowners are tapping into their equity to put it back to work. Nationally there has been a 31 percent increase in HELOC's year-over-year. With home prices up 8 percent year-over-year in December, according to the latest reading from CoreLogic, homeowners are regaining home equity at a fast clip—1.4 million borrowers rose above water on their mortgages through the end of September. That number likely increased as price appreciation accelerated toward the end of the year. Unlike the equity grab during the housing boom, this is real equity that borrowers are tapping into. During the housing boom, banks were relaxed in their valuation processes, often times only requiring a statistical valuation or at the most a drive-by-appraisal. But not this time. After getting burned by their second lien positions, banks are making sure that the equity is really there and are using very strict underwriting guidelines. The fact that under these new strict guidelines and appraisal scrutiny more and more HELOCs are being approved is another sign that the housing market has some real strength.
What Happened to Rates Last Week?
What to Watch Out For This Week:The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|12-Feb||2:00 PM||Treasury Budget||-||-$2.0B||-$27.4B|
|13-Feb||7:00 AM||MBA Mortgage Index||-||NA||3.40%|
|13-Feb||8:30 AM||Retail Sales||-||0.10%||0.50%|
|13-Feb||8:30 AM||Retail Sales ex-auto||-||0.10%||0.30%|
|13-Feb||8:30 AM||Export Prices ex-ag.||-||NA||-0.20%|
|13-Feb||8:30 AM||Import Prices ex-oil||-||NA||-0.10%|
|13-Feb||10:00 AM||Business Inventories||-||0.30%||0.30%|
|13-Feb||10:30 AM||Crude Inventories||-||NA||2.623M|
|14-Feb||8:30 AM||Initial Claims||-||365K||366K|
|14-Feb||8:30 AM||Continuing Claims||-||3200K||3224K|
|14-Feb||10:30 AM||Natural Gas Inventories||-||NA||NA|
|15-Feb||8:30 AM||Empire Manufacturing||-||0||-7.8|
|15-Feb||9:00 AM||Net Long-Term TIC Flows||-||NA||$52.3B|
|15-Feb||9:15 AM||Industrial Production||-||0.20%||0.30%|
|15-Feb||9:15 AM||Capacity Utilization||-||78.90%||78.80%|
|15-Feb||9:55 AM||Mich Sentiment||-||73.5||73.8|