Buyers and Sellers Upbeat About Future Inventory – According to Fannie Mae’s Home Purchase Sentiment Index consumers show optimism for buying and selling. The September index now matches the record high that was set in June. “The biggest driver for the increase in the index is the rebound in the ‘good time to buy’ sentiment especially from the renter respondents” says Doug Duncan, Fannie Mae’s chief economist.
Buyers Reach for ARMs – Based on Inside Mortgage Finance data, ARM originations surged over 40 percent in the second quarter compared to the first. The average 30-year fixed-rate mortgage was 4.11 percent last week; a five-year ARM averaged 3.38 percent, according to the Mortgage Bankers Association. ARM originations typically increase from the first to the second quarter of each year since spring is the busiest time of year for home purchases. Some economists are predicting an increase in ARMs to continue, particularly over the next few months as mortgage rates are largely predicted to rise more.
Mortgage Rates Increase – Borrowers have seen financing costs for a mortgage move higher. The 30-year fixed-rate mortgage posted its largest week-over-week increase since July. “The 30-year mortgage rate increased for a second consecutive week, jumping 6 basis points to 3.91 percent,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield also rose, climbing 4 basis points.”
Mortgage Fraud Is Back on the Rise – According to real estate data firm, CoreLogic, mortgage fraud risk is up by nearly 17 percent in the most recent 12-month period. “Occupancy” fraud is rising the fastest, in which applicants deliberately misrepresent their intended use of the property. One in every 122 mortgage applications contained application fraud during the first two quarters of 2017, says Bridget Berg, CoreLogic’s senior director of fraud solutions strategy. Berg says common misrepresentations on the applications tended to center around the sources of down payment funds, income amounts, employment and the amount of debt.