Mortgage Pros, Inc.

Jan. 20 (Bloomberg) — The number of mortgage applications in the U.S. rose 9.1 percent last week, led by a rebound in refinancing activity as borrowing costs dropped.
The Mortgage Bankers Association’s index of loan applications climbed to 575.9 in the week ended Jan. 15, a one- month high, from 528.1 a week earlier. The group’s refinancing gauge jumped 11 percent, while the purchase gauge advanced 4.4 percent.
Refinancing climbed for the second consecutive week as the rate on a 30-year fixed mortgage fell by the most in five months. Gains in sales may be harder to sustain as a growing economy prevents rates from falling much more and with unemployment projected to average 10 percent this year, offsetting the benefits of a government tax credit.
“Refinancings and new-purchase applications have been bouncing along the lows for some time now,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “At this point, mortgage activity has little downside as it is very close to the recession lows.”
The mortgage bankers group’s refinancing gauge rose to 2663.8 from 2407.2 the prior week. The purchase index rose to
223 from 213.7 the prior week.
The group’s refinancing index is often volatile near year- end, making it difficult to determine the underlying trend. The measure plunged 38 percent in the last three weeks of 2009, and is now up 35 percent in past two weeks.
To contact the reporter on this story:
Bob Willis in Washington +1-202-624-1837 or bwillis@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at +1-202-624-1862 or cwellisz@bloomberg.net

Producer Prices in U.S. Rose 0.2% in December; Ex-Oil Unchanged
2010-01-20 13:30:00.487 GMT
By Courtney Schlisserman

Jan. 20 (Bloomberg) — Wholesale prices in the U.S. rose at a slower pace in December, showing the economy is recovering without the immediate threat of inflation.
The 0.2 percent increase in prices paid to factories, farmers and other producers followed a 1.8 percent jump in November, according to Labor Department data released today in Washington. The gain was more than anticipated and reflected higher food costs. Excluding food and fuel, so-called core prices were unchanged.
An unemployment rate projected to average 10 percent this year and excess capacity are giving companies room to hold the line on prices. Few signs of inflation will allow the Federal Reserve to keep interest rates near zero in coming months to help fuel the economic recovery.
“The substantial slack in the economy will keep inflation subdued this year,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “As the recovery gains momentum in 2011 then inflation will be more of a concern and that’s when we expect the Fed to aggressively raise interest rates.”
Economists forecast no change in December producer prices, according to the median of 73 projections in a Bloomberg News survey. Estimates ranged from a decrease of 0.5 percent to an increase of 0.5 percent.
Prices excluding food and energy were forecast to rise 0.1 percent after a 0.5 percent increase a month earlier, according to the survey median. Core prices have increased in one of the last four months.
Wholesalers received 4.4 percent more for their goods last year, compared with a 0.9 percent decrease in 2008. Core producer prices rose 0.9 percent in 2009, the smallest gain since 2002.
Year-over-year costs may keep rising the next few months as the plunge in fuel prices at the depths of the recession in late
2008 and early 2009 drops out of the calculations.
To contact the reporter on this story:
Courtney Schlisserman at +1-202-624-1943 or cschlisserma@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at +1-202-624-1862 or cwellisz@bloomberg.net

Housing Starts in U.S. Fell More Than Forecast, Permits Climb
2010-01-20 13:30:00.647 GMT
By Bob Willis

Jan. 20 (Bloomberg) — Housing starts in the U.S. fell more than anticipated in December, while building permits unexpectedly jumped, signaling inclement weather may have kept builders away from worksites.
Work began on 557,000 houses at an annual rate, down 4 percent from November, figures from the Commerce Department showed today in Washington. Permits, a sign of future construction, climbed to the highest level in a year.
The government’s extension and expansion of a tax credit for first-time buyers may help underpin demand in the first half of 2010, giving builders reason to ramp up new projects. The gain in permits, which are less influenced by weather, indicates an unseasonably cold and wet December probably prevented some work from getting started last month, according to economists like Maury Harris.
“It’s the weather,” Harris, chief economist at UBS Securities LLC in New York, said before the report. “The deadline for the homebuyer tax credit is going to accelerate sales and building activity” in coming months.
Starts were projected to fall to a 572,000 pace last month according to the median estimate of 72 economists surveyed by Bloomberg News. Projections ranged from 495,000 to 630,000. The government revised November’s reading up to a 580,000 from the 574,000 previously estimated.
For all of 2009, builders broke ground on 553,800 houses, the fewest since records began in 1959. The annual rate was down
39 percent down from 2008’s 905,500, which was the second-lowest ever.

This entry was posted on Wednesday, January 20th, 2010 at 11:41 am and is filed under HEADLINE NEWS, MORTGAGE NEWS, THE FED. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.