Connect with us

BUSINESS

Mortgage rates hit 9-month high, and loan demand drops further

Published

on

The economic damage from the omicron variant of the coronavirus is now expected to be less than initially thought, and that has interest rates back on their upward trajectory yet again. As a result, mortgage demand fell 2.7% to end 2021, compared with two weeks before, according to the Mortgage Bankers Association’s seasonally adjusted index. [The MBA did not release application volume last week due to the holidays.]

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.33% at the end of last week from 3.27% two weeks before, with points rising to 0.48 from 0.38 (including the origination fee) for loans with a 20% down payment. That rate was 47 basis points lower the same week one year ago.

As a result, applications to refinance a home loan fell 2% last week compared with two weeks ago and were 40% lower year over year. The refinance share of mortgage activity, however, increased to 65.4% of total applications from 63.9% the previous week, due to continued weakness in the purchase loan market.

“Mortgage rates continued to creep higher over the past two weeks, as markets maintained an optimistic view of the economy,” said Joel Kan, an MBA economist. “Refinance demand continues to dwindle, as many borrowers refinanced in 2020, and in early 2021.”

Rates continued to climb at the start of this week, rising sharply Tuesday to the highest level since early April of last year, according to Mortgage News Daily, which calculates daily rates as opposed to weekly averages.

Applications for mortgages to purchase homes fell 4% from two weeks earlier and were 12% lower year over year. That was the weakest showing since October 2021. Home sales began pulling back in November, but more because of low inventory than high interest rates. Home prices also continue to gain compared with 2020, up just over 18% in November, according to CoreLogic.

“Despite supply and affordability challenges, 2021 was a record year for purchase originations,” said Kan. “MBA expects 2022 to be even stronger, with total purchase activity reaching $1.74 trillion.”

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

BUSINESS

Bitcoin falls another 8% as cryptocurrencies extend steep losses

Published

on

Cryptocurrencies continued their dramatic slide on Saturday, with bitcoin losing nearly half of its value since hitting its November high.

Bitcoin, the world’s most valuable cryptocurrency by market value, tumbled about 8% on Saturday to trade just above $35,000. The coin hit a record high of $69,000 in November.

Meantime, ether, the second-largest cryptocurrency by market cap, sank nearly 10% to trade around $2,400.

The losses came on the heels of a Thursday dip in the stock market. Cryptocurrencies and traditional stocks have been falling in tandem this month, with investors concerned about how anticipated Federal Reserve interest-rate increases will affect the market.

A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Fed may take the wind out of the crypto market’s sails.

There’s also concern U.S. regulators will further crack down on digital currencies.

Russia’s central bank proposed banning the use and mining of cryptocurrencies earlier in the week. Officials argued it posed threats to financial stability, citizens’ wellbeing and its monetary policy sovereignty. U.S. authorities have also been clamping down on certain aspects of the market.

Continue Reading

BUSINESS

Cryptocurrencies tumble, with bitcoin falling 8% and ether down 9% in the last 24 hours

Published

on

Bitcoin prices fell sharply on Thursday night, while ether prices also dived.

Bitcoin plummeted by 8% in the last 24 hours, and trading at $38,524 as of 10:56 p.m. ET, according to CoinDesk data.

Ether, the second-largest cryptocurrency by market cap, dived more than 9%. It was trading at $2,828 as of 10:57 p.m. ET, according to CoinDesk.

The declines in cryptocurrencies follow Wall Street losses on Thursday. The Nasdaq was down almost 5% this week, and the S&P 500 is into its third straight week of losses.

As the 10-year U.S. Treasury yield spiked earlier this week, rising rates have caused investors to shed their positions in riskier assets. The Federal Reserve have also indicated it plans to begin reducing its balance sheet, as well as tapering of bonds and raising interest rates.

A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Federal Reserve may take the wind out of bitcoin’s sails.

Bitcoin prices have fallen sharply since November, tumbling over 40% from a high of over $67,500 in 2021.

Some experts warn that the crypto market could be heading toward a downturn soon, as heightened regulatory scrutiny and intense price fluctuations dampened bitcoin’s prospects.

Regulators are cracking down on cryptocurrencies too. China completely banning all crypto-related activities and U.S. authorities are also clamping down on certain aspects of the market.

Continue Reading

BUSINESS

Netflix shares fall 20% on slowing subscriber growth

Published

on

Netflix reported fourth-quarter earnings after the bell on Thursday. The streamer beat on both the top and bottom lines, but shares plunged more than 20% in after-hours trading, to the lowest levels since June 2020, on slowing subscriber growth.

Here are the key numbers:

Earnings per share (EPS): $1.33 vs 82 cents expected in a Refinitiv survey of analysts.


Revenue: $7.71 billion vs $7.71 billion expected, according to Refinitiv.

Global paid net subscriber additions: 8.28 million vs 8.19 million expected, according to StreetAccount estimates
Netflix added 8.28 million global paid net subscribers in the fourth quarter. Analysts had expected the company to add 8.19 million, according to StreetAccount estimates. But that’s fewer than the 8.5 million subscribers Netflix added in Q4 2020, the same figured it had forecasted for Q4 2021, and its outlook was worse.

Netflix said it expects to add 2.5 million subscribers during the first quarter of 2022, far below the 3.98 million it added in Q1 2021. Meanwhile, analysts had expected 6.93 million in the first quarter, according to StreetAccount estimates.

Netflix said it plans for a more back-end weighted content slate in the first quarter, with big premieres set for March.

But that’s similar to the image Netflix had painted heading into Q4. Netflix and analysts had anticipated a large jump in consumers at the end of 2021 when the company released new TV shows and movies that had been pushed to the back half of the year. During the quarter, for example, Netflix released high-performing content such as “Emily in Paris,” “Don’t Look Up,” “Red Notice” and “You.”

Netflix said increased competition from other companies was one reason for the slowdown, though in the past it had said companies like Apple and Disney wouldn’t materially affect growth.

“Consumers have always had many choices when it comes to their entertainment time – competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering,” Netflix said. “While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.”

Disney and Roku shares also dipped more than 4% in after-hours trading.

Netflix, wanting to attract the 800 million to 900 million households that use either broadband internet or pay-TV, said it’s still early days when it comes to reaching that number.

“It’s definitely frustrating for us, the current slower growth,” co-CEO Reed Hastings said during a pre-taped earnings interview. The company reported 222 million paid memberships in the fourth quarter.

“It’s a dynamic market for sure, it may not be as steady as people think about it in terms of we’re gonna add X number every quarter, every month, every week, but there’s no question that’s the direction the business is going in,” co-CEO Ted Sarandos added.

Continue Reading

Trending