Mortgage Bankers Association 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.

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.

Demand For Home Purchase Applications Up 29%

According to the Mortgage Bankers Association’s Weekly Applications Survey, home purchase application demand is now 29% higher than at the same time last year. And, because purchase application demand is considered a good indicator of future home sales, it could be a sign that there will be a sales bump coming in the months ahead. The encouraging news came during a week when demand for loans to buy homes was relatively flat from the week before and mortgage rates rose. In fact, average mortgage rates were up 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. Despite the slight increase, however, refinance demand was up from a week earlier and drove total mortgage application demand 1.2 percent higher than the week before. Analysts expect that the increase in refinance demand was due to expectations that the Fed may raise interest rates this month for the first time in nine years. The possibility of a rate increase has helped spur demand in recent weeks. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Mortgage Credit Availability Improves Again

When mortgage credit is tight, it’s harder for prospective home buyers to secure financing. That means, fewer potential buyers will qualify for home loans and fewer homes will be sold. Fortunately, data from the Mortgage Bankers Association, shows mortgage credit has been loosening and the trend continued in October. In fact, the Mortgage Credit Availability Index – which is scored in such a way that any increase indicates credit is loosening, while a decline signals that lending standards are tightening – increased 1.5 percent from the month before. Mike Fratantoni, MBA’s chief economist, said October’s results are partly due to new loan programs. “Credit availability increased in October mainly as a result of new conforming loan programs, many of which were affordable housing programs which have lower down payment requirements,” Fratantoni said. A closer look at the numbers reveals that conforming loans did see the biggest increase, rising 2.7 percent over September. However, all loan categories loosened from the month before including loans backed by the Federal Housing Administration, as well as conventional and jumbo mortgages. More here.

Mortgage Demand Flat As Rates Move Up

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. It was the second consecutive week mortgage rates rose. The increase caused demand for mortgage applications to fall from the previous week’s level. In fact, the Market Composite Index – which measures both refinance and purchase activity – fell 0.8 percent from the week before, with both the Refinance and Purchase Index registering a 1 percent decline. Despite the drop, however, demand for loans to purchase homes was still 20 percent higher than one year earlier. That improvement points to a significant increase in home sales over last year. Since mortgage application demand is an important indicator of future housing demand, any increase in the number of purchase loans indicates sales will also rise. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Average Mortgage Rates Fell Last Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates for 30-year fixed-rate mortgages with both conforming and jumbo balances, as well as loans backed by the Federal Housing Administration, fell last week from the week before. Rates are now at their lowest level since spring. The drop in rates – along with the continuing volatility caused by newly implemented industry regulations – caused a spike in mortgage application demand. In fact, the seasonally adjusted purchase index increased 16 percent from one week earlier and refinance activity was up 9 percent. “On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume,” Mike Fratantoni, MBA’s chief economist, said. “We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures.” The spike in purchase applications – which are a good indicator of future home sales – puts purchase demand 9 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.

Mortgage Rates Mostly Unchanged Last Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly unchanged last week from the week before. In fact, rates for 30-year fixed-rate mortgages with both conforming and jumbo balances were flat, while 15-year fixed-rate loans saw a slight decrease and loans backed by the Federal Housing Administration moved up. Despite favorable rates, however, application demand fell sharply due to new mortgage disclosures rules. “Application volume plummeted last week in the wake of the implementation of the new TILA-RESPA integrated disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” Mike Fratantoni, MBA’s chief economist, said. “The prior week’s results evidently pulled forward much of the volume that would have more naturally taken place this week.” A closer look at the numbers reveals that the previous week did, in fact, see a 25.5 percent increase in overall mortgage demand – which includes both refinance and purchase activity. Last week, on the other hand, total demand for mortgage applications fell 27.6 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all 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.