Application Volume Up Again Despite Rising Rates

Mortgage loan application volume continues its rollercoaster trend of rising one week and falling the next, up 12% after falling 7.1% last week, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, increased 12%. The adjusted purchase index rose 4%, while the unadjusted purchase index rose 12% and was 7% lower YOY. The refinance index jumped 18% and was down 50% YOY. Refinances made up 57.3% of total applications. Mortgage rates continue to climb, with the 30-year fixed-rate reaching its highest level since March 2020 at 3.78%. “Despite the increase in rates, refinance applications were up 18%, driven mainly by a 22% jump in conventional applications. There has likely…

Home Prices Grew 18.5% In 2021, Should Cool In 2022

Home prices rose year-over-year (YOY) by 18.5% across the nation in December 2021, and by 1.3% from November, CoreLogic’s latest Home Price Index reported. Home price growth averaged 15% for 2021, which saw one of the hottest housing markets in decades. Q1 2021 started off with 10% appreciation but continued to grow, reaching 18% in Q4. By comparison, price appreciation for the full year of 2020 averaged only 6%. The states with the highest increases YOY were Arizona (28.4%), Florida (27.1%), and Utah (25.2%). The cities with the biggest gains were Phoenix (30.2%), Las Vegas (24.4%), and San Diego (22.4%). CoreLogic predicts that home prices will remain flat this month and rise by only 3.5% by next December. Comparing annual…

Newly Built Home Share Hits Record-High

More than a third of US single-family homes for sale in December were newly built, the highest share on record, according to a new Redfin report. New construction accounted for 34.1% of single-family homes at the end of 2021, up from 25.4% year-over-year (YOY). These numbers are the result of builders trying to keep up with housing demand, which has increased while inventory dropped to historic lows. In December, existing-home inventory fell 14.2% YOY with a historic-low 1.8 months supply. However, new homes saw inventory increase 34.8% and had a 6 month supply. Though new home supply is rising, new home sales have remained consistent, which Redfin calls “another indicator that homebuyer demand is far outpacing supply.” “A lot of…

Home Showings Skyrocketed In 2021

Home showings skyrocketed in 2021 as potential buyers scoured the hot housing market for a new home, according to a new report from ShowingTime. ShowingTime, a residential real estate showing management and market stats technology provider, released a report showing 2021 ended with an 11.5% year-over-year (YOY) increase in home showing traffic. The report notes that showings slowed as stock shortages continued to plague the housing market, but the ratio of showings per listing remained high in busy areas. “2021 was a banner year for residential real estate as buyer demand was up nationally for most of the year, pushing the ratio of showings per listing to historic highs,” said ShowingTime Vice President and General Manager Michael Lane.  Seattle and…

Second Home Rate Locks Hit All-Time High In 2021

The percentage of second home mortgage rate locks reached its highest recorded level in Q1 2021, dipping slightly in Q2 and Q3 before jumping back up at year-end, according to Pacaso’s Second Home Market report. Second home locks made up 5.7% of all mortgage rate locks in Q1 2021, a record high. They dropped slightly in Q2 and Q3, to 4.6% and 4.5%, respectively, but jumped back up to 5% in Q4 2021. “In April of last year, people stopped to take a beat, to see how things would shake out in what everyone hoped would be a post-pandemic reality,” said Pacaso CEO Austin Allison. “For some, that also meant going back to the office, and perhaps not coincidentally, second…

Inflation Rising In High-Migration Cities

The Great Migration is driving up inflation in the most popular destinations, a new Redfin report reveals. Looking at the correlation between inflation and migration in the metros, Redfin users are looking to move. Their analysis showed that high migration rates are linked to rising inflation. The tenth most popular destination in Q4 2021, Atlanta, saw inflation rise by 8.9% year-over-year in the same period, the highest inflation rate of all metros in their analysis. “Migration is one reason among many why the cost of everything from food to fuel is rising,” said Redfin Deputy Chief Economist Taylor Marr. “An influx of people moving to a popular, relatively affordable place like Atlanta increases demand for housing and transportation, pushing up…

Forbearances Rise Again

New forbearance plans rose for the second week in a row, up by 19,000 plans (2.3%), according to Black Knight’s blog, Vision. The increase was driven primarily by a 9.6%, 9,000, jump in FHA/VA plans. Forborne loans held by portfolios and PSL also rose by 9,000 (3.3%) while GSE plans rose by 1,300 (0.5%). Black Knight noted that the increases follow a pattern of “significant plan exits followed by predictable lulls driven by new plan starts and restart activity”. “This week’s data held true to that pattern,” the post reads. This is the second consecutive week of increases after a long period of declines, though Black Knight stressed that last week’s percentages were artificially pushed up by restart activity paired…

Higher Interest Rates Are on the Way. Will They Drive Down Mortgage Biz?

Interest rates are always an issue when purchasing a home. This year, they may be an even bigger issue. “Mortgage brokers are telling buyers that rates are rising, and if they are planning on buying, they need to be doing it as soon as possible before rates go up,” says Linda McCoy, board president of National Association of Mortgage Brokers (NAMB). If you finance the purchase of a property, as opposed to paying for all of it with cash, a mortgage interest rate is what it costs you per month to finance your home/property. “Your interest rate is effectively the lender’s compensation for letting you use its money to purchase your property,” says Aly J. Yale in an article for…

Rates Settle Down After Weeks Of Increases

Mortgage rates flattened out after weeks of steadily rising, averaging 3.55% last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 3.55%. A year ago at this time, the 30-year FRM averaged 2.73%. “Following a month-long rise, mortgage rates effectively stayed flat this week. Recent rate increases have yet to significantly impact purchase demand, as history demonstrates that potential homebuyers who are on the fence will often enter the market at the start of rate increase cycles,” said Sam Khater, Freddie Mac’s Chief Economist. “We do expect rates to continue to increase but at a more gradual pace. Therefore, a fair number of current homeowners could continue to benefit from…

Economist: Interest Rates Will Go Up in 2022, Rise Even More in 2023

At least one economist says the Federal Reserve is already behind the inflation curve, and the mortgage industry should expect interest rate increases into 2023. “Short-term interest rates will be pushed up by the Federal Reserve [in 2022], as the Fed announced,” writes Dr. Bill Conerly in Forbes. “They will raise rates in quarter-point increments three or four times this year. They will still be behind the curve, most likely, and will raise short rates more aggressively in 2023.” Predicting future Fed moves isn’t easy — not even for the Fed itself. Last summer, the Federal Reserve said it wouldn’t raise rates at all until 2023. That proved to be untrue. In a video news conference after their two-day meeting…