Housing recovery stumbles, but remains strong on yearly basis

This year has been a good one for the U.S. housing market, as conditions have steadily improved and more homebuyers and sellers are flooding the market. However, trends over the past several weeks have been less than ideal, even with the year-over-year-gains - but there appears to be no reason to worry just yet.

This year has been a good one for the U.S. housing market, as conditions have steadily improved and more homebuyers and sellers are flooding the market. However, trends over the past several weeks have been less than ideal, even with the year-over-year-gains - but there appears to be no reason to worry just yet. 

According to Freddie Mac, sliding mortgage rates stopped their decline for the week ending Sept. 11. While still near historic lows, the 30-year fixed-rate mortgage averaged 4.12 percent for this period compared to the previous week's 4.10 percent, while the 15-year FRM averaged 3.26 percent compared to 3.24 percent. 

Even with the increases, both of these residential financing rates are below the year-ago levels of 4.57 percent for the 30-year FRM and 3.59 percent for the 15-year FRM.

"Mortgage rates were up slightly this week, following the increase in 10-year Treasury yields, despite last week's disappointing employment report," explained Frank Nothaft, chief economist and vice president for the government-sponsored enterprise. "The U.S. economy added only 142,000 jobs in August, after a 212,000 gain in July and a 267,000 increase in June. The unemployment rate fell to 6.1 percent in August from 6.2 percent the previous month."

Builder activity dips slightly
On the other hand, interest from residential homebuilders has declined in August, according to a report from the Mortgage Bankers Association. 

The analysis found that mortgage applications for new home purchases from homebuilders dropped by 9 percent from July to August. Out of total loan applications, conventional financing comprised 68.9 percent of the overall volume, while FHA loans made up only 15.7 percent. The average loan size increased as well, up from $297,253 in July to $300,443 in August.

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