Mortgage Bankers Association Archives

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.

Post Election Bump Has Rates Up Again

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose again last week. In fact, mortgage rates were up 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. David H. Stevens, CMB, president and CEO of the Mortgage Bankers Association, says this is the biggest week-over-week increase in years. “Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year,” Stevens said. “Investors expectations of faster growth and higher inflation are driving the jump in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity.” And, though it’s true that mortgage application demand fell last week as rates rose, interest rates are still well below historical norms. In fact, Stevens told CNBC that the decline was likely just “potential buyers waiting to see whether rates will stay at these higher levels.” 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.

Hot Housing Market Will Continue In 2017

Forecasts from Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association all say that home sales should surpass this year’s totals in 2017. In fact, the forecasts call for somewhere between 6 million and 6.5 million homes to be sold next year. Part of the thinking behind the predictions has to do with the number of young Americans who are now reaching their prime home buying years. Because the number of first-time home buyers has been lower-than-normal recently, there should be growing pent-up demand among younger Americans, who will be eager to buy next year and beyond. Because of this, economists estimate that sales should continue to be strong over the next three years. That’s significant, especially if you’re a current homeowner who has been debating whether or not now is a good time to sell your home. It’s also important for potential buyers. Why? Because an influx of interested buyers could mean more competition and, if for-sale inventory stays low, higher prices. That means, prospective home buyers who are hoping to buy should start getting their finances in order now, so they’ll be able to put their best foot forward when the time comes. More here.

Mortgage Rates See Slight Increase Last Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved up 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. The increases, though slight, were enough to cause a dip in mortgage activity. Refinance demand – which is typically more sensitive to rate increases – fell 3 percent from the previous week, while purchase activity was down 0.3 percent from the week before. But though demand was slower on a week-over-week basis, it is still up significantly from last year when mortgage rates were higher. For example, refinance demand is now 45 percent higher than at this time last year and requests for applications for loans to buy homes are nearly 8 percent above last year’s level. Unfortunately, though rates remain low and buyer demand is strong, a lower-than-typical number of homes on the market could be suppressing sales which, despite this, are on track to have their best year in a decade. The MBA’s weekly applications survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage activity. More here.

Mortgage Rates Hold Near Record Lows

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week, continuing to hover near record lows. 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. Consistently low mortgage rates have been a bright spot for the housing market this year, as low inventory and higher prices strain affordability conditions. Between mortgage rates near record lows and a stronger job market, demand for home loans has been higher than at the same time last year, even as conditions have become more challenging. In fact, refinance demand is now 48 percent higher than last year at this time and purchase activity is 10 percent higher than year-before levels. However, lower rates last week weren’t enough to keep mortgage demand from falling from one week earlier. In fact, the Market Composite Index – which measures both refinance and purchase demand – fell 4 percent from the week before. 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 Sparks Increased Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications spiked 7.1 percent last week due to falling mortgage rates. Average rates were down for 30-year fixed-rate mortgages with both conforming and jumbo balances, as well as loans backed by the Federal Housing Administration. On the other hand, the average contract interest rate for 15-year fixed rate mortgages was unchanged from the week before. Joel Kan, the MBA’s associate vice president of industry surveys and forecasts, says lingering economic concerns pushed rates lower. “With lingering concerns over a weak second quarter reading of US GDP growth, along with continuing anxiety over global growth and financial markets, rates edged lower for the second week in a row,” Kan said. Lower rates led to a spike in refinance activity, which was up 10 percent over the previous week. It also helped boost demand for loans to buy homes 3 percent higher than the week before. Purchase activity is now 13 percent higher than it was during the same week one year earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Steady Rates Lead To Increasing Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications rose last week, though home buying activity was relatively flat from the week before. The Purchase Index – which tracks application demand for loans to buy homes and is considered a good indicator of future sales – was down 1 percent, though it remains 17 percent above last year’s level. The year-over-year improvement suggests buyer interest has been strong so far this spring due, in part, to the fact that mortgage rates remain historically low. Combined with solid job creation, low interest rates are expected to help keep demand high this year by counteracting home price increases and low for-sale inventory. Last week, rates continued to hold firm. In fact, average rates for 30-year fixed-rate mortgages with both jumbo and conforming balances were virtually unchanged from the week before. On the the other hand, mortgage rates for loans backed by the Federal Housing Administration and 15-year loans both decreased. Spurred on by low rates, refinance activity jumped 3 percent, which helped boost overall demand by 1.3 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

Mortgage Demand Spikes With Rate Drop

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications spiked last week, rising 10 percent over the previous week. The improvement, which included an 11 percent jump in refinance activity and an 8 percent increase in the purchase index, is a sign that low mortgage rates are beginning to inspire more Americans to enter the spring housing market. Mike Fratantoni, MBA’s chief economist, says demand for loans to buy homes – which are now 24 percent higher than last year – almost hit a six-year high last week. “Helped by a persistently strong job market and low rates, applications for both conventional and government home purchase loans increased last week,” Fratantoni said. “The purchase index was at its second highest level since May 2010. Applications to refinance also increased as the 30-year contract rate decreased to its lowest level since January 2015.” In fact, mortgage rates were down across most loan categories, including loans backed by the Federal Housing Administration, and 30-year fixed-rate mortgages with both conforming and jumbo balances. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.