Morning Report - Credit is tightening slightly in the mortgage market

Vital Statistics:

	Last	Change	Percent
S&P Futures	2051.9	-6.8	-0.33%
Eurostoxx Index	3273.4	-24.1	-0.73%
Oil (WTI)	37.67	0.2	0.43%
LIBOR	0.477	0.015	3.25%
US Dollar Index (DXY)	97.78	-0.699	-0.71%
10 Year Govt Bond Yield	2.23%	0.01%
Current Coupon Ginnie Mae TBA	104.4
Current Coupon Fannie Mae TBA	103.3
BankRate 30 Year Fixed Rate Mortgage	3.84

Stocks are lower this morning on no real market-moving news. Bonds and MBS are down.

Mortgage Applications rose 1.2% as refis rose 3.5% and purchases were flat. 

Wholesale inventories fell by 0.1% as sales were flat. 

Mortgage credit availability fell in November, according to the MBA. This means credit standards increased. Conventional loans tightened while government loans loosened slightly. While mortgage credit availability has increased steadily since the US residential real estate market bottomed in 2012, it is still a shadow of its former self. 

The MBA has its latest survey on mortgage bank profitability and volume. Last quarter, the average gain on a mortgage for independent mortgage bankers and the mortgage subsidiaries of banks fell from $1,522 to $1,238 (or about 55 basis points). On a year-over-year basis, it was an increase from $897 (or 42 bps) in the third quarter of 2014. Average volume in the third quarter was $614 million (or 2,609 units), which was the second highest print since 2008. Lots of useful stats in this survey.

While home prices have been appreciating at a mid single digit clip, rental prices have been increasing even faster. Last year, nearly half of all renters spent at least 30% of their in rent, which qualifies as cost-burdened. A quarter paid 50%. This is creating an affordable housing problem, especially in urban areas. 

The Fannie Mae Home Purchase Sentiment Index fell a couple of points as increasing prices and limited inventory are making things difficult for potential buyers. Second, consumers are becoming a touch more pessimistic about their future incomes.