Purchase Index Archives

Americans’ Financial Security Boosts Housing Sentiment

It’s said that there are two sides to every story. But there are also two sides to the calculations potential home buyers undergo when deciding whether or not it’s a good time for them to look for a new house. After all, buyers have to take into consideration the cost of homes in the areas they’re looking to live but also their own financial security. That’s why Fannie Mae’s most recent Home Purchase Sentiment Index is encouraging. Because, though Americans have concerns about housing affordability, they are feeling confident financially and secure in their jobs. In fact, the number of survey respondents who said they aren’t concerned about losing their job rose 15 percent over the month before and those reporting that their income is higher than it was 12 months earlier hit a new survey high. Doug Duncan, Fannie Mae’s chief economist, says Americans are feeling the effects of a stronger economy. “Consumers are attuned to the divergence between the slowing housing market and strong macro economy,” Duncan said. “Consumers were less optimistic this month about both home buying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs.” More here.

Mortgage Rates Fall Over Holiday Season

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell over the two-week holiday season. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances, as well as 15-year fixed-rate loans. Rates for mortgages backed by the Federal Housing Administration were unchanged. But despite the fact that it was the first time in weeks that rates moved lower, demand for mortgage applications still fell. In fact, refinance activity was down 22 percent and the seasonally adjusted Purchase Index dropped 2 percent from two weeks earlier. Naturally, the numbers are adjusted to account for the Christmas holiday but, according to the MBA’s chief economist Michael Fratantoni, the slowdown was even more than is usual for the holidays. “Mortgage application volume typically drops sharply over the holidays,” Fratantoni told CNBC. “However, this year, as mortgage rates continued their upward climb reaching the highest levels in more than two years, overall application volume fell even more than the holiday slowdown would suggest.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Purchase Activity Flat As Rates Rise

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up slightly last week from the week before. In fact, rates rose across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. Though the increases were minor, it was enough to cause a 6 percent drop in refinance activity. Michael Fratantoni, MBA’s chief economist, told CNBC there are fewer borrowers looking to refinance with rates at their current level. “Refinance activity decreased for the second-straight week because fewer borrowers have an incentive to refi at the current level of rates, but there are still some who respond to the small changes we have seen in recent weeks,” Fratantoni said. Since demand for loans to buy homes is less affected by weekly rate fluctuations, the Purchase Index was unchanged from the week before and remains 13 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Latest Survey Finds Mortgage Rates Down

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. The decline follows four consecutive weeks of increases. Despite lower rates, however, mortgage application demand fell from the previous week. In fact, the Refinance Index was down 5 percent and the Purchase Index – which is a good indicator of future home sales – was down 1 percent, though it remains 24 percent higher than at the same time last year. Michael Fratantoni, MBA’s chief economist, told CNBC demand for higher priced homes is still outpacing applications for more affordable homes. “Average purchase loan size climbed to a new survey high last week, as the higher end of the market continues to grow more quickly than the entry level,” Fratantoni said. The MBA’s weekly survey covers 75 percent of all retail residential mortgage applications and has been conducted since 1990. More here.

Mortgage Rate Increases Spur Activity

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But, despite being the fourth consecutive week rates moved higher, demand for mortgage applications still increased from the previous week. In fact, the seasonally adjusted Purchase Index – which is a good indicator of future home sales – jumped 12 percent from one week earlier and the Refinance Index was up 2 percent. Jonathan Corr, CEO of Ellie Mae, told CNBC that rising mortgage rates may be spurring people to act now in case rates continue to rise. “What we are seeing is refinances increasing as we anticipate interest rates going up,” Corr said. “It’s a great accelerator and motivator for many people. This month we saw the third-consecutive month of refinance volume increases.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.