Lynn Fisher Archives

Credit Availability Unchanged In February

Each month, the Mortgage Bankers Association releases a measure of mortgage credit availability in an effort to track whether lending standards are easing or tightening. The index looks at credit score, loan type, and loan-to-value ratio, as well as other factors that determine whether or not a borrower will be eligible for a loan. According to the most recent release, mortgage credit availability was unchanged in February, though the components gauging conforming and government loans both eased from the month before. Lynn Fisher, MBA’s vice president of research and economics, said the results were a mixed bag. “Credit availability was flat over the month. Slight declines in conventional programs aimed at low-to-moderate income borrowers were offset by increasing availability of government-backed programs,” Fisher said. “More than half of the investors in our credit availability data set are now offering some form of a conventional low down payment loan program which is targeted at lower income borrowers and first time home buyers and generally allows a down payment as low as 3 percent.” More here.

Home Loan Demand Rebounds As Rates Drop

Home loan demand has been volatile the past couple of months due to new mortgage regulations, the holidays, and the Fed’s interest rate announcement. But, according to the Mortgage Bankers Association’s Weekly Applications Survey, prospective borrowers returned last week following a holiday lull. In fact, mortgage application volume was up 21.3 percent from the previous week. Lynn Fisher, MBA’s vice president of research and economics, said the number of applications for loans to buy homes reached its second highest level since May 2010. “The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,” Fisher told CNBC. Refinance activity also bounced back, climbing 24 percent from the week before. However, while purchase demand is now 19 percent higher than it was at the same time last year, refinance demand is 38 percent lower than last year. Also in the report, average mortgage rates fell 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 MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Demand Falls After Loan Rush

Prior to the Federal Reserve’s interest rate announcement in mid-December, there was a sharp increase in home loan demand. Expectations that mortgage rates would soon move higher caused many to try and lock in a low rate before any increases occurred. But, because so many rushed to beat a possible rate hike, the two weeks following the Fed’s announcement saw a dramatic drop off in demand. “Refinance application volume increased for three weeks in a row in early December ahead of the Fed’s announcement that it was raising the federal funds rate,” Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association, told CNBC. “During the two weeks following their announcement, holiday-adjusted refinance activity dropped substantially, even though the 30-year fixed rate increased by only 4 basis points over the same period.” According to the MBA’s Weekly Mortgage Applications Survey, refinance activity – which is generally more sensitive to rate fluctuations – did drop sharply, falling 37 percent from two weeks earlier. Purchase demand was also down, though it still remains 22 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 U.S. retail residential mortgage applications. More here.

Mortgage Rates Fall To 5-Month Low

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates dropped last week to their lowest level since May. 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 mortgages. Demand for mortgage applications surged in response to the drop. In fact, refinance activity was up 24 percent from one week earlier and purchase application demand – which is a good indicator of future home sales – rose 27 percent. Purchase applications are now 49 percent higher than they were during the same week one year ago – which is a positive sign after recent data seemed to show home sales beginning to slow following a strong summer. Lynn Fisher, MBA’s vice president of research and economics, said there were multiple factors that led to the surge in demand. “The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change,” Fisher said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.