Mortgage Delinquencies Drop; Consumer Sentiment Still Elevated
- Jul 01, 2013
Fannie Mae reported on Friday that the single-family serious delinquency rate for the mortgages that it owns and insures dropped in May to 2.83 percent from 2.93 percent in April, down to the lowest level since January 2009, when delinquencies were on the way up. The decline from May 2012 has been even steeper, coming down from 3.57 percent a year ago.
Freddie Mac, likewise, reported monthly and annual drops in its single-family delinquency rate – from 2.91 percent in April to 2.85 percent in May, which is its lowest level since May 2009. In May 2012, the rate was 3.5 percent.
Both GSEs calculate their delinquency rates by including mortgages whose payments are more than 30 days late, but not actually in foreclosure yet. A normal rate – a pre-Great Recession rate, that is – is roughly 1 percent, so even now the rates are high by historical standards.
Consumer Sentiment Still Elevated
The University of Michigan said on Friday that its final reading of consumer sentiment in June was 84.1, an improvement from a preliminary reading of 82.7 released on June 14. The latest reading is also only a little below May’s final reading of 84.5, which was the highest since July 2007, since not long afterwards the sour economy soured consumer sentiment.
The current conditions component was down for the month, however, ending at 93.8 compared with 98.0 in May. Yet the expectations component does show strength, chalking up a two-point gain for the month by coming in at 77.8 in June. The survey queries 500 U.S. households each month about their own financial conditions and their attitudes about the broader economy.
Also on Friday: the Chicago Business Barometer dropped to 51.6 in June, according to the Institute for Supply Management. That’s the steepest drop since October 2008, and down from a 14-month high in May of 58.7. But the gyrations seen over the past few months aren’t typical for the barometer, and might be partly attributable to the unseasonable weather conditions in the region, the ISM notes.
Wall Street ended the day mixed, with the Dow Jones Industrial Average down 114.89 points, or 0.76 percent, and the S&P 500 off 0.43 percent. The Nasdaq eked out a 0.04 percent gain.
Though U.S. equities markets have been bouncing around a fair amount lately, they still remain winners for the first half of 2013 (Friday was the last trading day of the half). The Dow is up 13.78 percent for the year so far, while the S&P 500 has advanced 12.63 percent and the Nasdaq has gained 12.71 percent.