FHA Archives

Mortgage Rates Drop To Near Record Lows

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell to their lowest level in more than three years last week. And, in the case of jumbo loans, rates fell to lows not seen since 2011. Michael Fratantoni, MBA’s chief economist, told CNBC that financial market volatility is behind the rate drop. “Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance,” Fratantoni said in reference to Britain’s exit from the European Union. In fact, refinance activity – which is more sensitive to rate fluctuations – surged last week, climbing 21 percent from the week before. With rates down across all loan categories, including FHA loans and 15-year fixed-rate mortgages, that’s no surprise. Purchase activity also benefited from falling mortgage rates. The seasonally adjusted purchase index was up 4 percent and is now 23 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.

Mortgage Rates At Lowest Level In A Year

According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to its lowest level since January 2015 last week. Rates also dropped for loans backed by the Federal Housing Administration, loans with jumbo balances, and 15-year fixed-rate mortgages. Michael Fratantoni, MBA’s chief economist, told CNBC rates moved lower based on May’s job report and concern about economic volatility overseas. “Markets reacted to the weaker than anticipated job market report by recalibrating their expectations regarding the Fed’s next move. Additionally, global investors concerned about the potential for Brexit and its implications have once again led to a flight to safety, driving down Treasury yields,” Fratantoni said. “As a result, conventional mortgage rates dropped to their lowest levels since 2015 last week, while FHA rates dipped to their lowest level since 2013.” But despite favorable rates, demand for mortgage applications declined, falling 2.4 percent from one week earlier. Analysts say the fact that demand dropped last week has little to do with mortgage rates and is more likely a reflection of the fact that buyer demand is outpacing the supply of homes available for sale this spring. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rate Drop Spurs Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down 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 loans. The sharp drop brought rates for conforming and FHA loans to their lowest level since last spring and caused a spike in refinance activity. In fact, the Refinance Index increased 16 percent last week and pushed total mortgage application demand 9.3 percent above week-before levels. Michael Fratantoni, the MBA’s chief economist, told CNBC that much of the demand was generated by jumbo borrowers, which are those with loan balances greater than $417,000. “Jumbo borrowers are benefiting from fierce competition for these loans,” Fratantoni said. “The 30-year fixed rate for jumbo loans dropped to its lowest level since April 2013 and is now 15 basis points below the rate for conforming loans.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Real Estate Pros Say Buyer Traffic Is Strong

The National Association of Realtors surveys its members each month with a poll that asks for their expectations and perceptions of the overall market, buyer and seller traffic, prices, and home sales. According to the most recent release, real estate professionals are reporting that buyer traffic has been moderate to strong across much of the country. In fact, aside from the Northeast, only a few states reported weak traffic and, in Oregon, responding agents said buyer traffic was “very strong.” The report credits continuing demand from prospective home buyers to “sustained job creation, the low interest rate environment, the offering of three percent down-payment conventional mortgages, and lower mortgage insurance premiums for FHA loans.” Still – though it’s encouraging that buyer demand is strong as we enter the winter months – the latest survey wasn’t entirely positive. Realtors also said there were fewer home sellers and a lack of “properties in the lower price range and for those that are move-in ready.” That’s a concern because lower than normal for-sale inventory offer buyers fewer choices and puts upward pressure on home prices. More here.