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Vital Statistics:
Stocks are up as we await a Jerome Powell speech. Bonds and MBS are flat.
UWM Holdings (the parent company of United Wholesale) reported better-than-expected earnings per share. Q3 volume was $29.7 billion, which was down 7% compared to Q2 and 11% compared to a year ago. Gain on sale margins increased to 97 basis points compared to 88 in Q2 and 52 a year ago. They are guiding for Q4 production to come in between $19 and $26 billion with gain on sale margin at 75-100 basis points.
Mortgage Applications increased 2.5% last week as purchases rose 3% and refis rose 2%. “The 30-year fixed mortgage rate dropped by 25 basis points to 7.61 percent, the largest single week decline since July 2022,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market. Applications for both purchase and refinance loans were up over the week but remained at low levels. The purchase index is still more than 20 percent behind last year’s pace, as many homebuyers remain on the sidelines until more for-sale inventory becomes available.”
One issue for mortgage applications is that 1 in 3 home purchases are in cash, according to data from Redfin. All-cash purchases hit 34% in September, a 9 year high.
Credit delinquencies are increasing, according to the latest data from the New York Fed. Credit card delinquencies rose from 8% at the end of the second quarter to 9.4% at the end of the third quarter. Total credit card debt stands just shy of $1.1 trillion. Mortgage DQs were flat while HELOCs ticked up. Auto DQs rose as well.
Asking rents were flat in October, according to the latest data from Redfin. They are down 3.7% from the record set in August of 2022. During the pandemic, you’d see five people applying for the same unit, and you’re not seeing that anymore. Rentals are sitting on the market for longer. Landlords are willing to work with tenants on lease terms and concessions because consumers are just more skittish these days. A lot of folks are staying where they are instead of moving because there’s so much uncertainty in the economy and in the world.”
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