MBA Archives

Mortgage Rate Drop Is 1st In Three Weeks

The Mortgage Bankers Association’s Weekly Applications Survey has been conducted every week since 1990 and covers 75 percent of all retail residential mortgages. In other words, it’s a pretty reliable gauge of where mortgage rates and application demand are headed. According to their most recent release, 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 brought rates to their lowest level in three weeks. Lynn Fisher, MBA’s vice president of research and economics, told CNBC markets were adjusting last week. “Markets adjusted expectations last week as attempts to repeal and replace the Affordable Care Act stalled and bond yields declined,” Fisher said. “This pushed mortgage rates down for the first time in three weeks.” But though average rates were down, demand for mortgage applications was relatively flat from the week before. In fact, overall mortgage application activity was down less than 1 percent from the week before. Still, demand for loans to buy homes – which is a good indicator of future sales – was up 4.8 percent over last year at the same time. 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.

Rising Mortgage Rates Still Low Historically

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose again last week. Rates moved up for all loan types except those backed by the Federal Housing Administration. Still, despite steadily increasing over the past month, mortgage rates remain low by historical standards. In fact, since 1980, mortgage rates have been as high as 18 percent – though they spent most of the past 40 years somewhere between 7 and 10 percent. In other words, mortgage rates are up from their all-time lows but remain far lower than they’ve typically been. The increases, however, have had an impact on refinance activity, which is more sensitive to rate fluctuations. “Refinances are almost entirely driven by mortgage rates, while purchase activity is a function of a broader set of variables including the state of the job market, demographics, and consumer confidence,” Michael Fratantoni, chief economist for the MBA, told CNBC. As proof, Fratantoni points to the fact that purchase application demand has actually risen 12 percent over the past month, while the group’s refinance index has fallen over the same period. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rates Increased Again Last Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up again 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 loans. The increase brought rates to their highest level in over a year. As a result, refinance demand fell sharply. In fact, refinance activity was down 16 percent from the week before. Demand for loans to buy homes, on the other hand, was relatively flat – though the trend toward higher-balance loans may be an indication that younger buyers are being deterred by rising rates. “The mix continues to shift towards higher balance loans, as the average purchase loan size reached a new survey record,” Michael Fratantoni, MBA’s chief economist, told CNBC. “First-time buyers and buyers of lower priced units may have stepped away from the market to some extent given the jump in rates.” The week’s results include an adjustment for the Thanksgiving holiday. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Higher Mortgage Rates Bring The Buyers Out

For the fourth straight week, average mortgage rates increased from the previous week. In fact, according to the Mortgage Bankers Association’s Weekly Applications Survey, rates were up across all loan categories, including 30-year fixed-rate loans with conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Michael Fratantoni, the MBA’s chief economist and senior vice president of research and technology, says the increases are being driven by expectations of future economic growth and inflation. “Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016,” Fratantoni said. But while the highest rates since January have caused refinance activity to fall, prospective home buyers look to be locking in low rates before they go up any further. Last week saw a 19 percent increase in demand for loans to buy homes. The spike puts purchase loan demand 11 percent above where it was at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

Positive Economic News Takes Rates Higher

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved up last week across most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. It was the second consecutive week rates increased and follows a general trend upward over the past month. Joel Kan, an MBA economist, told CNBC positive economic news has been pushing rates higher. “Economic news in recent weeks has been mostly positive, especially in terms of GDP growth and increasing wages,” Kan said. “This raises the likelihood of the Fed raising rates at its December meeting, but also indicates stronger domestic economic fundamentals, which pushes rates higher.” As usual, rising rates had a negative effect on refinance activity, which is more sensitive to rate fluctuations than home purchase activity. Refinance demand dipped 3 percent last week from the week before, while demand for loans to buy homes was actually up 1 percent and is now 11 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 Rate Bump Leads To Slower Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. The increase brought rates to their highest level since June and caused a slight dip in overall demand for mortgage loans. Refinance activity – which is generally more sensitive to rate fluctuations – fell 2 percent, while demand for loans to buy homes was down less than 1 percent from the week before. Michael Fratantoni, MBA’s chief economist, told CNBC there are several factors that point to more rate increases in the near future. “Globally, rates have begun to creep upwards as investors anticipate less aggressive monetary policies from central banks, and U.S. rates are being pushed upwards in response,” Fratantoni said. “Additionally, new data show continued positive signals regarding the job market and rising inflation, indicating the Fed is likely to hike in December and will continue increasing rates next year.” But, though rate increases are expected in the coming months, they are also expected to be gradual – likely keeping rates low by historical standards, at least in the near term. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Where Are Mortgage Rates Headed Next Year?

Last week, average mortgage rates fell across

most loan categories, according to the latest survey from the Mortgage Bankers Association. In fact, rates for 30-year fixed-rate loans with both conforming and jumbo balances fell, as did interest rates on 15-year fixed-rate loans. Loans backed by the Federal Housing Administration rose slightly. For most of this year, mortgage rates have hovered near historic lows, providing incentive to buyers who may have otherwise been scared off by higher home prices and increased buyer competition. So what does the future hold for mortgage rates? Well, Michael Fratantoni, MBA’s chief economist and senior vice president for research and industry technology, says any increases over the next few years should be gradual. “Rate increases through 2017 and 2018 will likely be gradual, as Chair Yellen and the Fed have indicated that they are going to be cautious going forward,” Fratantoni said. “Historically low, and in some cases negative, rates around the world continue to put downward pressure on longer-term U.S.

rates … We expect that the 10-year Treasury rate will stay below three percent through the end of 2018, and 30-year mortgage rates will stay below 5 percent over the same period.”

Home Buyers Not Deterred By Rate Increase

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes rose 3 percent last week despite a bump in mortgage rates. Average rates rose for 30-year fixed-rate loans with both conforming and jumbo balances, as well as 15-year fixed-rate loans. Rates for loans backed by the Federal Housing Administration were unchanged from one week earlier. Higher rates didn’t stop buyers, however. In fact, the MBA’s purchase index is now 13 percent above where it was last year at this time. That’s due, in part, to the fact that rates – though at their highest level since June – are still low by historical standards. Refinance activity, on the other hand, is more sensitive to rate increases and saw a 1 percent decrease last week. Michael Fratantoni, MBA’s chief economist, says average mortgage rates are as high now as they were the week of the Brexit vote in June. “Refinance applications dropped to the lowest level since the week of the Brexit vote, as mortgage rates reached their highest level since then,” Fratantoni said. The MBA’s weekly applications survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Rate Increase Slows Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased across all loan categories last week, 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 increase brought rates to their highest level in a month and caused a decline in demand for home loan applications. Michael Fratantoni, MBA’s chief economist, told CNBC economic optimism led to the spike in mortgage rates. “As incoming economic data reassured investors regarding U.S. growth, and financial markets returned to viewing a December Fed hike as increasingly likely, mortgage rates rose to their highest level in a month last week,” Fratantoni said. “Total and refinance application volume dropped to their lowest levels since June as a result.” In fact, refinance demand – which is generally more sensitive to rate fluctuations – dropped 8 percent from the week before, while demand for loans to buy homes fell 3 percent. The MBA’s weekly applications survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.