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The Turbulence in Mortgage Finance Continues
The 10 year Treasury may be at 3.46%, but the mortgage market continues to look for a bottom.
The latest evidence is origination levels last quarter, which nosedived 26%. According to Inside Mortgage Finance:
New 1-4 family mortgage originations tumbled a sizeable 26 percent between the second and third quarters of this year … Some $410 billion in new mortgages were made in 3Q09, the lowest quarterly pace seen in 2009. This brought mortgage originations for the first nine months of 2009 to $1.41 trillion or not far behind the $1.50 trillion seen for all of 2008. Most of the decline in third quarter originations was due to a slide in refinance activity in the Fannie Mae/Freddie Mac sector of the market. But new FHA originations held up remarkably well in the third quarter as volume actually rose 6 percent from the second quarter. FHA originations for the first three quarters of 2009 already have set a new annual record at $283 billion.
Sure, the FHA numbers are a positive, but the 3Q numbers indicate that an overall malaise remains hanging over the market.
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