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Mortgage demand slumped last week as consumers hit the brakes on purchase applications.
Mortgage applications decreased by 7.2% in the week ending Jan. 26 compared to one week earlier on a seasonally adjusted basis, according to the Mortgage Bankers Association‘s (MBA) weekly mortgage applications survey.
“Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity,”Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity.”
The average loan size for purchase applications has risen in recent weeks to $444,100, the largest average loan size since May 2022, Kan added. On the strength of lower mortgage rates, homebuyers are reclaiming some purchasing power.
The MBA survey shows the average mortgage rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remained unchanged at 6.78% last week. Meanwhile, rates on jumbo loans (greater than $766,550) also remained unchanged at 6.94%.
The MBA data shows that purchase apps decreased by 11% from one week earlier on a seasonally adjusted basis, while refis picked up by 2% in the same period. Last week, refis comprised 34.2% of the total applications, up from 32.7% the previous week.
The Federal Housing Administration’s (FHA) share of total applications decreased to 13.8% last week, down from 14.1% the week prior. The U.S. Department of Veterans Affairs (VA) share fell to 13.3%, down from 13.7% the week before. The U.S. Department of Agriculture (USDA) share remained unchanged at 0.4%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
Source: housingwire.com
“Mortgage rates increased slightly last week, but there continues to be an upward trend in purchase activity. Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season,” said Joel Kan, MBA’s deputy chief economist. Meanwhile, refinance applications experienced a 7% decrease from the previous … [Read more…]
Mortgage demand continued to increase last week, as seen in an uptick in purchase activity. Mortgage applications rose by 3.7% in the week ending Jan. 19 compared to one week earlier on a seasonally adjusted basis, per the Mortgage Bankers Association‘s (MBA) weekly mortgage applications survey.
“Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season,”Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Refinance applications declined over the week and remained at low levels. There is still little incentive for homeowners to refinance with rates at these levels.”
The MBA survey shows the average mortgage rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.78% last week, up from 6.75% the prior week. Rates on jumbo loans (greater than $766,550) rose to 6.94% up from 6.86%.
The MBA data shows that purchase apps increased by 8% from one week earlier on a seasonally adjusted basis, while refis were down 7% in the same period. Last week, refis comprised 32.7% of the total applications, down from 37.5% the previous week.
The Federal Housing Administration’s (FHA) share of total applications decreased to 14.1% last week, down from 14.3% the week prior. The U.S. Department of Veterans Affairs (VA) share fell to 13.7%, down from 14.2% the week before. The U.S. Department of Agriculture (USDA) share decreased to 0.4% from 0.5%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
Source: housingwire.com
Mortgage rates at their lowest level in three weeks led to an increase in borrowers’ demand for home loans last week, spreading some optimism in the industry in the first few weeks of 2024. To prove it, analysts are already discussing a potential refi recovery.
Overall, mortgage applications rose by 10.4% in the week ending Jan. 12, compared to one week earlier, on a seasonally adjusted basis, per the Mortgage Bankers Association‘s (MBA) weekly mortgage applications survey. The MBA survey, conducted weekly since 1990, covers over 75% of all U.S. retail residential mortgage applications.
“Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications. The 30-year fixed mortgage rate decreased six basis points to 6.75%, the lowest rate in three weeks,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
The MBA survey shows the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.75% last week from 6.81% the prior week. Rates on jumbo loans (greater than $766,550) fell to 6.86% from 6.98% on a weekly basis.
At HousingWire’s Mortgage Rates Center, the Optimal Blue data shows the rate at 6.60% on Tuesday for conforming loans, down from 6.68% the previous Tuesday. Rates for jumbo loans were at 7.23%, down from 7.27% in the same period.
According to Kan, purchase and refinance applications were up last week compared to a holiday-adjusted week. The conventional market heavily drove the increases.
The MBA data shows that purchase apps increased by 9% from one week earlier on a seasonally adjusted basis, and refis were up 11% in the same period. Refis comprised 37.5% of the total applications last week, down from 38.3% the previous week.
The Federal Housing Administration’s (FHA) share of total applications decreased to 14.3% last week from 14.4% the week prior. The U.S. Department of Veterans Affairs (V.A.) share fell to 14.2% from 16.3% in the same period. The U.S. Department of Agriculture (USDA) share increased to 0.5% from 0.4%.
“Although purchase activity is lagging year-ago levels, refinance applications have improved from their recent low point and have been showing year-over-year gains, albeit at low levels. If rates continue to ease, MBA is cautiously optimistic that home purchases will pick up in the coming months,” Kan said.
In a report to investors on Wednesday, analysts at Jefferies said mortgage rates remain “relatively high to the point where housing supply remains tight by historical standards.”
Still, the analysts “view the forward curve and recent reductions in the 30-year mortgage rate as signs of life for a potential refi recovery.”
But don’t expect a refi boom like the one during the COVID years.
“We do not anticipate a large cycle over the near/intermediate term and believe the rate-term refinance pipeline consists of loans originated since May 2022, or $2 trillion, while the majority of loans outstanding still have coupons well below today’s rates.”
Source: housingwire.com
“Credit availability declined in December to the lowest level since 2012, as ongoing industry consolidation is resulting in more loan programs being removed from the marketplace,” said Joel Kan, MBA’s vice president and deputy chief economist. Read next: Mortgage rate decline spurs optimism in home purchasing Breaking down the index, the Conventional MCAI decreased by … [Read more…]
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WASHINGTON, D.C. (January 10, 2024) — Mortgage applications increased 9.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 5, 2024. The results include an adjustment to account for the New Year’s holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 9.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 45 percent compared with the previous week. The holiday adjusted Refinance Index increased 19 percent from the previous week and was 30 percent higher than the same week one year ago. The unadjusted Refinance Index increased 53 percent from the previous week and was 17 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 40 percent compared with the previous week and was 16 percent lower than the same week one year ago.
“Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines. Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”
The refinance share of mortgage activity increased to 38.3 percent of total applications from 36.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.
The FHA share of total applications decreased to 14.4 percent from 14.5 percent the week prior. The VA share of total applications increased to 16.3 percent from 14.6 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.81 percent from 6.76 percent, with points remaining unchanged at 0.61 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.98 percent from 6.86 percent, with points increasing to 0.43 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.56 percent from 6.51 percent, with points decreasing to 0.84 from 0.86 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.41 percent from 6.26 percent, with points decreasing to 0.55 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 6.17 percent from 5.71 percent, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mba.org/WeeklyApps, contact [email protected] or click here.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
Source: mba.org
By Jeff Ostrowski, Bankrate.com (via TNS).
The average rate on 30-year fixed mortgages ticked down to 6.94% this week from 6.96% the previous week, according to Bankrate’s weekly national survey of large lenders.
Just a few months ago, the average rate on 30-year home loans topped 8%. But mortgage rates dropped after the Federal Reserve indicated it’d begin cutting its key rate in 2024. The central bank’s long-awaited pivot was spurred by a number of factors, including a slowing job market and signs that the Fed’s ongoing war on inflation is working.
Meanwhile, yields on 10-year Treasury bonds, an informal benchmark for 30-year mortgage rates, have dropped from 5% to around 4% in recent weeks.
The Fed doesn’t directly control mortgage rates, but it plays a pivotal role. The central bank sets policy that affects the cost of home loans. At the conclusion of its most recent meeting on Dec. 13, the Federal Open Markets Committee decided to leave rates unchanged.
“The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response,” says Joel Kan, deputy chief economist at the Mortgage Bankers Association.
The rate cool-off somewhat eases the housing affordability squeeze. It also bodes well for a housing market that has been sluggish since 2022. However, a still-strong economy has undermined hopes that the Fed will begin cutting rates soon.
“The economy’s not slowing down as quickly as the Fed would hope,” says Scott Haymore, head of pricing and secondary markets at TD Bank.
The 30-year fixed mortgages in this week’s survey had an average total of 0.34 discount and origination points. Discount points are a way for you to reduce their mortgage rate, while origination points are fees a lender charges to create, review and process your loan.
Over the past 52 weeks, the benchmark 30-year fixed-rate mortgage averaged 7%. A year ago, the 30-year fixed-rate mortgage was 6.55%. Four weeks ago, that rate was 7.21%. The 30-year fixed-rate average for this week is 0.67%age points higher than the 52-week low of 6.27%.
As for other types of loans:
—The 15-year fixed-rate mortgage was 6.19%, down from 6.21% from a week ago.
—The 5/6 adjustable-rate mortgage (ARM) was 6.95%, down from 6.96% a week ago.
—The 30-year fixed-rate jumbo mortgage was 6.94%, down from 7% a week ago.
The national median family income for 2023 was $96,300, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in November 2023 was $387,600, according to the National Association of Realtors. Based on a 20% down payment and a mortgage rate of 6.94%, the monthly payment of $2,050 amounts to 26% of the typical family’s monthly income.
The steep climb in mortgage rates over the past two years has squeezed affordability and sparked a slowdown in home sales. First-time buyers are especially challenged by this market. Home prices haven’t fallen significantly, and values are unlikely to decline, given the shortage of homes for sale.
“Higher mortgage rates have a dual impact on the housing market: reducing affordability for buyers and strengthening the rate lock-in for sellers,” says Odeta Kushi, deputy chief economist at First American. “The combination of reduced affordability and increased strength of the rate lock-in effect is likely to continue to suppress home sales because you can’t buy what’s not for sale, even if you can afford it.”
Reflecting the affordability squeeze, the median household income for homebuyers jumped to $107,000 in 2023 from $88,000 last year, according to the National Association of Realtors’ 2023 Profile of Home Buyers and Sellers.
Economists expected to see mortgage rates decrease dramatically by now, but the resilience of the U.S. economy had thrown a wrinkle into those predictions. Things finally seem to be cooling, especially 10-year Treasury yields.
Mortgage rates are also chained to inflation, a metric the Fed has been moving to control. At its most recent meetings, the central bank opted to keep rates unchanged. While the Fed doesn’t directly set fixed mortgage rates, it does set the tone of the interest rate environment.
The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80%. “Lenders surveyed each week are a mix of lender types — thrifts, credit unions, commercial banks and mortgage lending companies — is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.
(Visit Bankrate online at bankrate.com.)
©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.
Source: cpapracticeadvisor.com
Despite an uptick in mortgage rates at the beginning of 2024, mortgage demand surged after adjusting for the holiday.
Mortgage applications increased 9.9% for the week ending Jan. 5 compared to one week earlier, according to data from the Mortgage Bankers Association (MBA).
The 30-year fixed mortgage rate averaged 6.62% as of Jan. 4, according to Freddie Mac’s Primary Mortgage Market Survey.
“The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”
Purchase applications rose by 6% week over week on an adjusted basis. Meanwhile, refinance applications were 19% higher than a year ago.
The share of Federal Housing Administration (FHA) loan activity decreased to 14.4% from 14.5% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 16.3%, up from 14.6% over the previous week, while the share of U.S. Department of Agriculture (USDA) loan activity decreased to 0.4% compared to 0.5% the previous week.
Source: housingwire.com
Mortgage rates ticked up last week after weeks of declines while applications for home loans dropped in a sign that the housing market continues to struggle despite some recent signs of optimism.
The 30-year fixed rate inched closer to 7 percent for the week ending December 29, according to the Mortgage Bankers Association (MBA). Meanwhile, mortgage applications tumbled by more than 9 percent from two weeks earlier, lenders said.
“Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023,” Joel Kan, MBA’s deputy chief economist, said in a statement shared with Newsweek on Wednesday.
The 30-year fixed mortgage ended 2023 at 6.76 percent, more than a percentage point lower than the peak of nearly 8 percent in October, he said.
“The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 percent lower than a year ago,” Kan said.
Economists say that activity in the housing market will ramp up if prices decline, which at the moment are elevated partly due to low supply. The existing homes market is still in the doldrums as sellers are reluctant to give up their low rates for new home loans that could cost them close to 7 percent in interest.
“The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months in come,” Kan said.
Recent data shows that private residential construction moved up, according to the U.S. Census Bureau, to nearly $900 billion in November—a jump of more than a percent from the previous month, helped by spending on single-family home building.
“November was the first month in over a year when single-family construction spending rose compared to the year prior,” Yelena Maleyev, KPMG’s senior economist, said in a note shared with Newsweek on Tuesday. “Builders have become more positive about the single-family market as mortgage rates have come down from recent peaks and revived buyers’ interests.”
In a sign that rates may be entering some level of uncertainty, as the market looks to see how many rate cuts the Fed will institute in 2024, the average contract interest rate for 15-year fixed-rate mortgages decreased to 6.26 percent from 6.41 percent in the week ending December 29.
Fed policymakers held rates at 5.25 to 5.5 percent last month for the third time in a row and have suggested that they may cut rates to a possible 4.6 percent in 2024. It’s unclear yet when such cuts could come.
But declining mortgage rates could give a boost to the housing market, with builders feeling optimistic in the new year.
“Construction activity remains robust as strong demand for housing and infrastructure remain a tailwind for builders,” Maleyev said, noting that elevated rates could be a challenge for the sector in 2024. “Spending is expected to end the year on a high, with lower mortgage rates helping revive activity in the housing market.”
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
Mortgage demand fell over the holidays despite declining mortgage rates.
Mortgage applications decreased 9.4% for the week ending Dec. 29 compared to two weeks earlier, according to data from the Mortgage Bankers Association (MBA).
The 30-year fixed mortgage rate closed 2023 at 6.76%, more than one percentage point lower than its October peak of 7.9%, according to Joel Kan, MBA’s vice president and deputy chief economist.
“The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12% lower than a year ago,” Kan said in a statement.
Purchase applications decreased by 5% week over week on an adjusted basis. Meanwhile, refinance applications remained at very low levels but were 15% higher than a year ago.
“The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months to come,” Kan added.
The share of Federal Housing Administration (FHA) loan activity decreased to 14.5% from 15% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 14.6%, down from 17.3% over the previous week, while the share of U.S. Department of Agriculture (USDA) loan activity increased to 0.5% compared to 0.4% the previous week.
Source: housingwire.com