Mortgage delinquencies increased slightly in Q1’24

Plus: CPI report shows inflation slowed in April

May 17, 2024

👋 Hey there. Happy Friday. Today's newsletter is 622 words, a 2.5-minute read.

Disclaimer: Average mortgage rates as of May 16, 2024. © MND's Daily Rate Index.

1. CPI report shows inflation slowed in April

On Wednesday, the Bureau of Labor Statistics announced a slight drop in the inflation rate for April. Down to 3.4% from March's 3.5%, the drop was minimal but still welcome after inflation rose in the two months prior.

This perceived cooling in inflationary pressures led to a decrease in mortgage rates, with lenders reducing the average rate for a top-tier 30-year fixed mortgage from 7.11% to 6.99% on Wednesday.

Hopes of the Federal Reserve to start cutting rates were further bolstered by other data on Wednesday showing retail sales were unexpectedly flat last month suggesting that domestic demand was cooling.

2. Mortgage delinquencies increased slightly in Q1’24

The delinquency rate for mortgage loans on one-to-four-unit residential properties was 3.94% at the end of Q1 2024, marking a slight increase from the previous quarter, according to the MBA National Delinquency Survey.

The delinquency rate was up 6 basis points from the fourth quarter of 2023 and up 38 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the first quarter remained unchanged at 0.14 percent.

“Overall mortgage delinquencies increased slightly in the first quarter of 2024, but not across all three of the major loan types. Delinquencies declined for FHA loans, were relatively flat for conventional loans, and increased for VA loans,”

Marina Walsh, MBA’s Vice President.

🚨 Coach’s Corner

The other LTV……. Lifetime Value. Tune in for my breakdown on this concept! (Youtube)

— Dave Krichmar CEO

3. More Nuggets

📈 Mortgage applications increased 0.5 percent from one week earlier, according to data from the MBA for the week ending May 10, 2024. (MBA)

✌️ Flagstar to exit warehouse lending space following $5B loan sale to JPMorgan Chase. (Yahoo)

⚖️ The Supreme Court yesterday upheld, by a 7-2 vote, the CFPB’s funding structure, ending an argument that threatened to dismantle the agency. (BankingDive)

🔎 Mortgage brokers sent people’s estimated credit, address, and veteran status to Facebook. (The Markup)

4. Builder confidence drops for first time in 6 months

Homebuilder confidence in May dropped for the first time in six months, influenced by sustained high mortgage rates which have deterred buyers and impacted builders' sales expectations.

The National Association of Home Builders/Wells Fargo index of housing market conditions fell by 6 points to 45 in May, the lowest level since the start of the year. A measure of builder sales outlook over the next six months fell 9 points, the most since October 2022, to 51 this month.

“A lack of progress on reducing inflation pushed long-term interest rates higher in the first quarter and this is acting as a drag on builder sentiment,”

NAHB Chief Economist Robert Dietz.

5. UWM announces 0% down purchase product

United Wholesale Mortgage unveiled a 0% down purchase product yesterday, building on the wholesale giant's aggressive offerings in the lending space.

To be eligible for this product, borrowers must be at or below 80% of the Area Median Income for the address of the property they are buying or one borrower is a first-time homebuyer. The qualifying borrower will then be given a 3% down payment assistance loan, up to $15,000, in the form of a second lien loan. Source

"UWM’s 0% Down Purchase program is going to change the game this purchase season," said Mat Ishbia, president and CEO at UWM.

You’re all caught up. See you on Monday!

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