• Amy Morrill
  • News
  • Market Recap: New Administration Overturns Mortgage-Fee Cut

Market Recap: New Administration Overturns Mortgage-Fee Cut

  • January 20, 2017

The Federal Housing Administration had planned to reduce annual Mortgage Insurance Premium starting January 27th.  However, the new Trump administration suspended this change.  Still, homebuilders remain confident, and housing starts are up but building permits dropped slightly. 

In December, the consumer price index is up 0.3%.  Excluding food and energy, prices are up 0.2%.  For the year 2016, consumer inflation rose at the fastest pace in five years, triggered by rising rents, increased medical expenses, and higher gas prices.  Inflation is up by 2.1% for the full year, the most rapid increase since the 3% gain in 2011.  If inflation continues at this rate, these numbers support the projected Federal Reserve interest rate hikes in 2017.

The NAHB’s homebuilders’ index is down from December to 67, but still a positive reading, as any reading above 50 indicates builder confidence.  NAHB Chairman Granger MacDonald said, “builders begin the year optimistic that a new Congress and administration will help create a better climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process.  For current sales conditions, the index measures 72, sales expectations for the next six months are 76, and buyer traffic is 51.

Housing starts exceeded expectations in December, rising 11.3%.  The increase is driven by multi-unit starts up 57%.  Single-family units actually saw a decline, down 4%.  In the last three months, housing starts have been volatile down 19%, up 27%, and down 10% since September.  Building permits dropped somewhat, down 0.2%, below projections.  

Mortgage rates are up following initial discussion to suspend the FHA MIP cut. House Financial Services Committee Chairman Jeb Hensarling said, “it seems the Obama administration’s parting gift to hardworking taxpayers is to put them at a greater risk of footing the bill for yet another bailout.”  As of this afternoon, the Trump administration overturned the mortgage-fee cut, according to a letter from HUD. 

Sources: Mortgage News Daily, BloombergBloomberg, Business Insider, HousingWire, MarketWatch, CNBC

Amy Morrill
Loan Officer
NMLS # 266739
Branch NMLS # 1815933

Amy Morrill

PHONE: (603) 312-1341

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).