First Time Home Builders Concerned about Credit


Too many young consumers, however, are concerned their credit scores won’t make the cut when it comes to financing a home today, and they may be right.

“We’re still seeing credit remain relatively tight,” Jonathan Corr, CEO of mortgage processor Ellie Mae, said in a release.

About a third of future first-time homebuyers say their credit score might hurt their ability to buy a home and that 45 percent said they have delayed a home purchase in order to improve their credit, according to a new survey by Experian. One in 5 said they were likely to opt out of the mortgage process or buying a home all together for the next five to 10 years.

“Your credit profile is one of the factors that can have a substantial impact on securing a home loan because it is used by lenders as an indicator of your financial health,” said Rod Griffin, director of public education at Experian. “It is important to take steps early in the homebuying process to allow time to make changes and have those changes be reflected on your credit score.”

Nearly three-quarters of those surveyed said they are working to improve their credit, paying down debt, making sure bills are paid on time and even taking steps to protect their credit from identity theft and fraud. Still, just 30 percent of homebuyers in March were first-time buyers, well below the historical average.

What Happened to Rates Last Week?


Mortgage backed securities (FNMA 3.00 MBS) lost -54 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move slightly higher from the prior week.  It was a our second straight week of sell offs of -25BPS or more.

We had a very light week for economic events.  Internationally, the ECB meeting grabbed all the attention of traders.  MBS were primarily pressured lower (higher rates) due to WTI Oil increasing from an open on Monday or $39.90 and a close on Friday of $43.75.

Domestic Flavor:

Jobs, Jobs, Jobs: Initial Weekly Jobless Claims were lower than expected (247K vs est of 263K) and hit a 42 year low! The more closely watched 4 week moving average fell to 260.50K.  Continuing Claims were also lower than expected (2.137M vs est of 2.171M).

Housing: Weekly Mortgage Applications rose 1.3%.  Purchases dropped -1.0% and Refinances gained +3.0%. Existing Home Sales: The March report showed a nice +5.1% gain over February and basically matched market expectations with an annualized sales pace of 5.33M vs est of 5.30M.
The March Housing Starts (1.089M vs est 1.170M) and Building Permits (1.086M vs est of 1.2M) were a tad lighter than expected but February’s readings for both were revised upward.  Overall, this data didn’t show any new trends.  YOY Starts are up 14.2% which is respectable though.

Across the Pond:
ECB:  They left their key interest rate unchanged and also kept their negative savings rate unchanged.  They did finally release details of their new corporate bond purchase program which will start in June.  MBS did fall under some slight pressure on comments made by ECB President Mario Draghi.

What to Watch Out For This Week:


The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

Brought to you by:

Taff Weinstein

Office: 832-794-2136
Cell: 832-794-2136

First Imperial Mortgage
3409 Morrison St
Houston, TX 77009
NMLS 225846

Copyright © 2016 Powered by