American Financial Resources beginning on Veterans Day will pay agent fees for brokers and correspondents on VA loan submissions.

The Department of Veterans Affairs generally requires originators to pay an annual fee of $100 per third-party originator for each entity that sponsors their origination. AFR will now pay this fee on behalf of its brokers and correspondents on AFR-related VA loans.

"VA loans are appealing to eligible veterans and their qualified spouses because they offer many benefits to help past and present military personnel purchase or refinance a home," said Bill Packer, COO for AFR. "Covering the VA agent fees is another way for us to help our partners succeed, and in this case, as they help our nation's heroes truly come home.

"All of us at AFR consider it a privilege to assist eligible veterans and their families as they explore home financing options," said Packer. "Originators should focus on educating veterans and their families of the benefits available to them, and ensuring they obtain the best possible financing package, without worrying about an agent fee interfering with the process."

Mortgage rates rose across the board this week, according to the Primary Mortgage Market Survey from Freddie Mac.

“The economy continued to show resilience as strong business activity and growth in employment drove the 30-year fixed mortgage rate to a seven year high of 4.94 percent, up 11 basis points from last week,” said Sam Khater, chief economist for Freddie Mac.
“Higher mortgage rates have led to a slowdown in national home-price growth, but the price deceleration has been primarily concentrated in affluent coastal markets such as California and the state of Washington.”

But the malaise could spread to other housing markets that had been immune from those conditions.

“The more affordable interior markets, which have not yet experienced a slowdown home in price growth, may see price growth start to moderate and affordability squeezed if mortgage rates continue to march higher,” said Khater.

The following provides a snapshot of what Freddie recorded happened this week:

• 30-year fixed-rate mortgage averaged 4.94 percent with an average 0.5 point for the week ending November 8, up from last week when it averaged 4.83 percent. A year ago at this time, it averaged 3.90 percent.
• 15-year fixed-rate this week averaged 4.33 percent with an average 0.5 point, up from last week when it averaged 4.23 percent. A year-ago at this time, the 15-year FRM averaged 3.24 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.04 percent. A year-ago at this time, the 5-year ARM averaged 3.22 percent.

The Fannie Mae Home Purchase Sentiment Index decreased in October, falling 2.0 points to 85.7.

The decline is attributed to decreases in five of the six components, including those measuring home buying and selling attitudes of consumers. The HPSI has trended downward, since hitting a survey high in the spring, declining in October to its lowest level in a year.

“The further erosion of buying sentiment occurred despite generally positive views of the economy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Among those who said it’s a good time to buy, 30 percent, a record high, cited favorable economic conditions as the reason. Meanwhile, the share of consumers who think the economy is on the right track continued to grow, reaching a new survey high.”

The net share of Americans who said it is a good time to buy a home fell 5 percentage points, and the net share who said it is a good time to sell a home fell 3 percentage points. Meanwhile, the net share of survey respondents who expect home prices to go up fell 2 percentage points, and the net share who expect mortgage rates to go down fell 1 percentage point.

Last, respondents also expressed a slightly more pessimistic view on job security, with the net share who are confident about not losing their job falling by 1 percentage point.

While the October drop was broad-based, with five out of six HPSI components having declined, the net share of consumers who said it’s a good time to buy a home posted the largest decrease, tying the second lowest reading since the survey began.

HOME PURCHASE SENTIMENT INDEX HIGHLIGHTS

Fannie Mae’s 2018 Home Purchase Sentiment Index decreased in October by 2 points to 85.7. The HPSI is up 0.5 points compared with the same time last year.

• The net share of Americans who say it is a good time to buy a home 21%, declined 5 percentage points from last month.
• The net share of those who say it is a good time to sell a home, 35%, dropped 3 percentage points.
• The net share of those who say home prices will go up, 37%, dropped 2 percentage points.
• The net share of Americans who say mortgage rates will go down over the next 12 months, 57%, dropped 1 percentage point.
• The net share of Americans who say they are not concerned about losing their job, 78%, fell 1 percentage point.
• The net share of those who say their household income is significantly higher than it was 12 months ago, 19%, remained unchanged.

"The contrast between the survey’s findings of weak home buying sentiment and overall economic optimism mirrors what we’re seeing in the broader economy," said Duncan. "While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion.”

Mortgage credit availability increased in October according to the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association, analyzing data from Ellie Mae's AllRegs Market Clarity business information tool.

The MCAI increased 2.5 percent to 186.7 in October. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI increased, up 5.5 percent, and the Government MCAI decreased, down 0.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 6.3 percent while the Conforming MCAI increased by 4.6 percent.

"Credit availability increased in October, driven largely by an expansion in the supply of conventional credit, while government credit fell slightly over the month," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Reversing a trend from last month, lenders made more conventional and low-down payment programs available to prospective borrowers. This increase in supply was likely in response to a growing number of first-time home buyers in the market, as home price appreciation has slowed and wage growth has picked up. Jumbo credit availability also expanded last month, with the jumbo index increasing again to its highest level since the survey began."

Conventional, Government, Conforming, and Jumbo MCAI Component Indices.

The MCAI increased 2.5 percent to 186.7 in October. The Conventional MCAI increased, 5.5 percent, and the Government MCAI decreased 0.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased, 6.3 percent, while the Conforming MCAI increased, 4.6 percent.

The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk-availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine.

The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs. The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits.

The Conforming and Jumbo indices have the same "base levels" as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted "base levels" in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the base period) relative to the Total=100 benchmark.