Mortgage Market News

U.S. Stock markets are plunging today after weak economic data abroad signals that the global economic slowdown has resurfaced. News from China showed a slowdown in its manufacturing sector, while Australia unexpectedly lowered its benchmark interest rate, signaling that the country may be in worse economic shape than expected. In addition, a downgrade to the euro-zone's inflation and Gross Domestic Product by the European Commission are weighing on global equities.
CoreLogic reports that home prices, including distressed sales, rose 6.7% from March 2015 to March 2016, with a 2.1% gain from February to March. Looking ahead, CoreLogic forecasts a 5.3% rise in prices over the next year. CoreLogic's chief economist, Frank Nothaft said, "Low interest rates and increased home building suggest that housing will continue to be a growth driver."
Government-sponsored-entity Freddie Mac reported a net loss of $354 million in the first quarter of 2016 due to lower interest rates and a $600 million loss from widening credit spreads. A credit spread is the difference in yield between two bonds of similar maturity but different credit quality. It was only the second quarterly loss in the past four years, though the losses have come in the past three quarters. And though the company didn't need a capital infusion from the government, it will not make a dividend payment to the Treasury. Freddie Mac and sister Fannie Mae don't make mortgage loans. They buy them from lenders, then package and sell them into securities and sell them to investors.
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