MetroIntelligence Economic Update by P. DUFFY
Purchase loan apps dip 3 percent but up 16 percent year-on-year
The Market Composite Index for mortgage applications, a measure of mortgage loan application volume, decreased 0.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 3 percent (but up 16 percent year-on-year) and refinance activity rising 1 percent (and up 67 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages decreased to a survey low of 2.98 percent.
Home Purchase Sentiment ticks up 0.7 points in October, but still down 7.1 points year-on-year
The Home Purchase Sentiment Index® (HPSI) ticked up 0.7 points in October to 81.7, rising for the third consecutive month, but is down 7.1 points year-on-year. Three of the six HPSI components increased month over month, with consumers reporting a more optimistic view of both homebuying and home-selling conditions, in addition to expecting mortgage rate declines. However, consumers also reported greater pessimism regarding their personal finances and employment outlook.
Small Business Optimism Index unchanged in October, but uncertainy index rises to highest level in four years
The Small Business Optimism Index remained at 104.0 in October, unchanged from September and a historically high reading. Four of the 10 components improved, 5 declined, and 1 was unchanged. Although all of the data was collected prior to Election Day, a 6-point increase in the NFIB Uncertainty Index to 98 was likely driven by the election and uncertain conditions in future months due to the COVID-19 pandemic and possible government-mandated shutdowns. The uncertainty reading was the highest reading since November 2016.
Job openings edged up 1.3 percent in September, but still twice as many unemployed as openings
The number of job openings rose 1.3 percent to 6.35 million on the last business day of September. Hires fell 1.4 percent to 5.95 million and separations fell 0.5 percent to 4.69 million, while quits rose 6.3 percent to 3.02 million. With a total of 12.58 million unemployed persons in September, there were 6.23 million more unemployed persons than job openings, or nearly twice as many.
Share of mortgages in forbearance falls another 16 basis points to 5.67 percent
The total number of loans now in forbearance decreased by 16 basis points from 5.83 percent of servicers’ portfolio volume in the prior week to 5.67 percent as of November 1, 2020. According to MBA’s estimate, 2.8 million homeowners are in forbearance plans.