Market News 1-16-2020
Mortgage Market Update
This week the U.S. and China signed the ‘phase one’ trade deal, an event that helped drive global stocks to record highs. Talks will now begin on a ‘phase two’ deal. Consumer prices rose slightly in December, but underlying inflation pressures retreated. Weak inflation supports the Fed’s desire to keep policy rates unchanged. Producer prices edged up in December as a rise in the cost of goods was offset by weakness in services. This reading was another indication of tame inflation.
Homebuyers were active to begin the year. Mortgage application volume was up 30.2% last week. Purchase applications were up 16% for the week and 8% year-over-year. The Purchase Index, which includes all mortgage applications for the purchase of a single-family home, is now at its highest level since October 2009. The Veterans Administration has eliminated loan limits on VA loans, starting January 1, 2020. However, there is also an increase on many associated fees.