Zdravo and welcome to the Metz Market Minute for the Chrisman Commentary.
Be Calm: After a rollercoaster the last few weeks, rates stayed almost flat this week. So did purchases! Refinances fell by almost 20%, though. Part of the calmed rates came from...
PCE: PCE came in at 3.8%. That's still up from March's 3.5%, and still well over the inflation target of 2%. However, it's better than expected and far better than the nearly 5% annualized inflation we were getting from CPI and PPI numbers. That has chances of a rate hike now down to 60%.
New Homes: The builders are not happy. We've seen that in confidence, now we see the data behind why. New home sales were down 6.2% for the month, and are down 11% year over year. We're up to an almost 10% inventory for new builds.
Urban Institute: We had a great study come out from Laurie Goodman, Alexei Alexandrov, and both Sam Valverde and Ted Tozer (past GNMA presidents). It showed that doing a 100% LTV FHA loan is only 12BPS higher default risk than a 96.5%, easily capturable in the UFMIP. They compared it to DPA loans and found it actually lower risk.
Far bigger risk? Credit scores. The default risk goes up 13x as you move from a 740 to a 620. That's a big jump, of course, and yet we've seen multiple brokers showing score differences that large as they pilot the UWM/Rocket Vantage models.
Read the study here.
Surprise! Xactus bought the MCL platform, which underpins a LOT of the credit resellers. Didn't have that on the bingo card.