Daily Dose

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year average fixed-rate mortgage (FRM) eased to 4.20 percent (0.6 point) for the week ending May 15, a drop from the last survey. "These lower than expected rates are welcome news with the spring home buying season underway and may even provide those who haven't already refinanced possibly a reason to take another look," said Frank Nothaft, chief economist at Freddie Mac.

The Johnson-Crapo housing finance reform bill, which would phase out Fannie Mae and Freddie Mac in favor of a more limited federal insurer, has passed through the Senate Banking Committee. While the bill always had enough support in the committee to make it to the Senate floor, whether or not it goes any further is the real question.

The National Association of Home Builders (NAHB) released Thursday its Housing Market Index (HMI) for May, reporting another slip in builder confidence as single-family home sales continue to disappoint. The index, a gauge of homebuilder sentiment toward the single-family housing market, dropped to 45 from a downwardly revised reading of 46 in April. A score below 50 indicates a market viewed by more builders as “poor” rather than “good.”

Although rising rents and tight inventories have led to a surge in new construction in San Francisco, the new supply is barely able to keep pace with demand, creating challenges in the region, says Wells Fargo's Economics Group. "Multi-family permits, which include both apartments and condominiums, surged 30.4 percent in Santa Clara County during 2013 and have eclipsed previous highs for this market," the group said. Single-family home building is rebounding, but only "slowly and off exceptionally low levels."

According to examination results released Wednesday by the Office of Mortgage Settlement Oversight, five of the six banks met or exceeded expectations across 29 different compliance metrics in the third and fourth quarters of 2013. Not faring as well was Green Tree, a wholly owned subsidiary of Walter Investment Management Corp., which has part of ResCap's servicing portfolio.

The New York Fed recorded an increase of $129 billion in national outstanding household debt in the first three months of the year, bringing the total debt level up to $11.65 trillion. Leading the increase was a rise in mortgage debt, which was up by $116 billion from the end of 2013, according to the bank. However, with originations dropping to $332 billion—the lowest level since the housing recovery started—there was little to celebrate on that front.

The National Association of Home Builders, working with Wells Fargo, recently published its Housing Opportunity Index (HOI), which found 65.5 percent of new and existing homes sold from January through March were affordable to families earning the U.S. median income of $63,900. The figure from the first quarter was slightly higher than the 64.7 percent of homes sold that were considered affordable in the fourth quarter of last year.

In its Weekly Mortgage Applications Survey, the Mortgage Bankers Association (MBA) reported a 3.6 percent rise in application volumes for the week ending May 9. In a significant turn from recent trends, refinances were entirely responsible for the bump in overall applications. Still, refinance application numbers remain down nearly 80 percent compared to last year.

As part of its efforts to expand credit access to more borrowers, the Federal Housing Administration has introduced its "Blueprint for Access," which includes a new counseling program for borrowers using FHA-insured financing. The plan has its critics, including the American Enterprise Institute's Edward Pinto, who argues that FHA "has not stood for sustainable homeownership for at least five decades."

Now that Director Mel Watt's administration is in full swing, the Federal Housing Finance Agency (FHFA) has released its new strategic plan for the conservatorships of Fannie Mae and Freddie Mac. In its outline, FHFA focused on three tenets going forward for the GSEs: maintain foreclosure prevention activities, reduce taxpayer risk, and build a new, single-family securitization infrastructure.