Interest rates dropped significantly after several weeks of moderating, according to the Primary Mortgage Market Report from Freddie Mac.

[caption id="attachment_8439" align="alignleft" width="272"] Khater: Rates have remained flat or fallen for five straight weeks.[/caption]

“The 30-year fixed fell to 4.63 percent this week, the lowest it has been since mid-September,” said Sam Khater, Freddie Mac’s chief economist. “Mortgage rates have either fallen or remained flat for five consecutive weeks and purchase applicants are responding with an uptick in demand given these lower rates. While the housing market softened in response to higher rates through most of this year, the combination of a low unemployment and recent downdraft in rates should support home sales heading into the early winter months.”

In addition, the survey generated loan data as flows:

• 30-year fixed-rate mortgage averaged 4.63 percent with an average 0.5 point for the week ending Dec. 13, 2018, down from last week when it averaged 4.75 percent. A year-ago, the 30-year fixed-rate mortgage averaged 3.93 percent.
• 15-year FRM this week averaged 4.07 percent with an average 0.5 point, down from last week when it averaged 4.21 percent. A year-ago, the 15-year fixed-rate mortgage averaged 3.36 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.04 percent with an average 0.3 point, down from last week when it averaged 4.07. A year-ago, the 5-year adjustable-rate mortgage averaged 3.36 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage.

Millennials were not deterred from purchasing homes in October, despite a tight market and increased interest rates.

According to the latest Ellie Mae Millenial Tracker, the average loan amount to Millennial borrowers for all closed loans was $189,686 in October, down from $192,005 in September, but than last October’s average of $186,567. When men were listed as the primary borrower, the average closed loan in October was $198,864, compared to a much lower $188,607 when women were the primary borrower.

Even with rising mortgage rates, purchase loans still accounted for 88 percent of closed loans to Millennial borrowers in October, four percentage points higher than a year ago. Of all closed loans to this demographic, 68 percent were conventional loans, while 27 percent were for FHA loans, 2 percent were VA loans and 3 percent were undisclosed.

“Although housing prices and interest rates are still rising at a faster pace in 2018 than they have in previous years, those trends are not yet stopping Millennials from purchasing homes and putting down roots,” said Joe Tyrell, executive vice president of corporate strategy for Ellie Mae. “It is important for lenders to educate Millennials on the value of FHA loans that bring lower down payments and can allow these new homebuyers to stretch their dollar a little further even with rising interest rates.”

Additional findings from the October 2018 Ellie Mae Millennial Tracker are as follows:

• Interest rates on all loans rose to 4.96 percent, the highest percentage point since Ellie Mae started tracking this data in 2016, up from 4.87 percent in September, and up from 4.13 percent a year ago.
• Refinances slowly began to rise in the fourth quarter, representing 11 percent of home loans to Millennial borrowers.
• Across all home loans, it took an average of 42 days to close last month. A year ago, it took one day longer at 43 days to close. Purchase loans took an average of 41 days to close last month, compared to an average of 42 days to close a year ago. Refinance loans closed in 48 days last month, on average, compared to 45 days in 2017.
• The average FICO score for Millennial borrowers remained flat for the third consecutive month at 722, slightly down from 723 in July.
• The average age of all Millennial borrowers remained flat at 29.7 from the previous month, and essentially flat from 29.3 in October 2017.
• Millennial males (both single and married) were listed as the primary borrower on 60 percent of closed loans in October. Women were listed on 32 percent and the remainder did not specify a gender.

The Federal Housing Finance Agency has completed amending its regulation governing the Federal Home Loan Banks' Affordable Housing Program to be more flexible.

The aim was to provide more flexibility at the local level to allocate their Affordable Housing Program funds, and to design their project selection scoring systems to address affordable housing needs in their districts. The amended rules remove requirements that exist through other federal programs--making the program easier for Federal Home Loan Banks and award recipients.

“We appreciate the thoughtful comments we received on the proposed rule and implemented many of those suggestions," said Melvin Watt, director of the FHFA. “We believe that those suggestions incorporated into the final rule will help to further strengthen this important program, which has supported more than one million units of housing affordable to low-income homebuyers and renters since its inception in 1990.”

Also, the rule authorizes the Federal Home Loan Banks to establish special competitive funds that target specific affordable housing needs in their districts. In addition, it removes the requirement for retention agreements for owner-occupied units where the Affordable Housing Program subsidy is used solely for rehabilitation, which reduces administrative and financial burdens on Federal Home Loan Banks, members and households related to calculating and obtaining household subsidy repayments.

The Federal Home Loan Banks must implement all changes in the final rule by Jan. 1, 2021, except that they must implement the changes regarding the owner-occupied retention agreement requirements by Jan. 1, 2020.

The Federal Home Loan Bank Act requires each Federal Home Loan Bank to establish a program to provide subsidies for long-term, low- and moderate-income, owner-occupied and affordable rental housing. Each bank is required to allocate annually 10 percent of its prior year's net income to fund its program to help subsidize the purchase, construction, and rehabilitation of affordable rental and owner-occupied housing. In 2017, the Federal Home Loan funded $384 million in Affordable Home Program funding.

BNY Mellon has appointed Sabet Elias in a new role as chief technology officer. Elias reports to Bridget Engle, senior executive vice president and CIO. He will join the firm's Technology Executive Committee and be based in New York, effective today.

"Sabet is a talented technologist and brings to the bank a solid track record of building platforms,” said Engle. “As we continue to shape our global technology agenda and improve resiliency, we need to add leadership talent with deep experience in technology to take us to the next level. Sabet has years of experience in financial services, plus deep management and technical expertise to help us navigate the future."

Elias possesses more than 20 years of experience in building and operating global high-performance, mission-critical technology environments. He joins BNY Mellon from Bank of America where he was the sales and trading CTO for global banking and markets, responsible for strategy, architecture and a cross-asset platform. Before that, Elias was the CTO responsible for infrastructure across multiple lines of business with accountability for technology architecture, design, build and operations.

Prior to Bank of America, Mr. Elias was the CTO and Global Head of Electronic Trading Infrastructure at Citigroup, and prior to that the CTO at Lehman Brothers. Mr. Elias started his career at AT&T Bell Labs.