Mortgage rates shot back up, rising from 5.13% last week to an average of 5.55%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.55%, continuing a rollercoaster few weeks that has seen both a 30-point rate decrease and a 20-point increase. A year ago at this time, the 30-year FRM averaged 2.87%. “The combination of higher mortgage rates and the slowdown in economic growth is weighing on the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “Home sales continue to decline, prices are moderating, and consumer confidence is low. But, amid waning demand, there are still potential homebuyers on the sidelines waiting to jump back into the market.” All…
Refinance lending fell 36% from Q1 to Q2 2022, eclipsing increases in other lending areas, according to ATTOM’s second-quarter 2022 U.S. Residential Property Mortgage Origination Report. The report found that 2.39 million mortgages secured by residential property were originated in Q2 2022, down 13% from Q1 and 40% YOY. This is the fifth consecutive quarter of falling originations and the biggest annual drop since 2014. Though purchase originations and home-equity lending actually increased 8% and 35%, respectively, they were heavily outweighed by the double-digit refi drop. The total number of mortgages issued was down 13.2% from Q1 and 40% YOY, dropping at their fastest pace in eight years. Lenders issued $807.8 billion worth of mortgages overall in Q2, down 11%…
Affordability improved in July, with the national median payment applied for by applicants falling to $1,844 from $1,893 in June, the Mortgage Bankers Association (MBA) reported. MBA’s Purchase Applications Payment Index (PAPI) fell for a second consecutive month, down 3.8% to a reading of 157.7. PAPI measures monthly payments across time and relative to income, so this reading indicates that payments on new mortgages accounted for a smaller share of a typical person’s income. The improvement can be attributed to lower mortgage rates and less competition as more potential buyers are priced out of the market. Rates dipped to 5.13% last week, though they are back up this week. Additionally, purchase demand has declined sharply this year. Overall loan application…
Following moderating mortgage rates, pending home sales slipped only slightly in July, down 1% from June. The National Association of Realtors’ Pending Home Sales Index posted a reading of 89.8 last month. A reading of 100 is equal to the level of contract activity in 2001. Pending sales were down 19.9% YOY, slipping from last month’s 20% YOY reading. It was the second consecutive month of decline and the eighth in the last nine months. “In terms of the current housing cycle, we may be at or close to the bottom in contract signings. This month’s very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at…
Mortgage loan application volume fell 1.2% last week to a 22-year low as the 30-year fixed rate rose to its highest point in almost a month, the Mortgage Bankers Association’s weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, decreased by 1.2%. The adjusted purchase index fell 1% while the unadjusted purchase index dropped 2% and was 21% lower YOY. The refinance index dropped by 3% and made up 31.1% of total applications, down 83% from the same time last year. ARM activity fell to 6.5% of total applications. “Last week’s purchase results varied, with conventional applications declining 2% and government applications increasing 4%, which is potentially a sign of more first-time homebuyer activity.…
New home sales fell in July to a seasonally adjusted annual rate of 511,000, down 12.6% from June and 29.6% YOY, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. The massive dropoff can be attributed to the rising cost of buying a home. Home price appreciation and increasing interest rates are pricing potential buyers out of the market. Between rates and prices, the monthly mortgage payment on a typical US home is 62% higher than a year ago. Meanwhile, some sellers are opting not to put their homes up for sale, exacerbating the stock shortage and driving up competition. About half of all homeowners have a rate under 4% and are disinclined…
Buyers are still fleeing the market in droves despite signs of cooling, driven out by rising mortgage rates and economic uncertainty. Home sales fell by 19.3% YOY in July, hitting their lowest level since the pandemic started, Redfin reported. It’s the biggest annual decline in U.S. home sales in more than a year. Sales also fell 4.1% from June. Redfin noted that while affordability challenges pushed some buyers out, others were concerned about the potential for home-value declines. Home price appreciation rose at its slowest pace since June 2020, up only 7.7%, and talk of price correction is everywhere. Fewer homeowners put their homes on the market, too. New listings fell 13.5% YOY, the biggest decline in more than a…
Mortgage Lenders lost money on every loan originated for the first time since 2018 in Q2, according to the Mortgage Bankers Association’s (MBA) Quarterly Mortgage Bankers Performance Report. Independent mortgage banks and mortgage subsidiaries of chartered banks lost an average of $82 on each loan they originated in the second quarter of 2022, down from gains of $223 per loan in Q1. The average pre-tax production loss was 5 bps, a complete turnaround from Q1’s average net production profit of 5 bps. Average production volume totaled $705 million per company, down from $808 million in Q1. Only three other quarters in the survey’s history saw net production losses: Q1 2014, Q1 2018, and Q4 2018. “The second quarter of 2022…
Mortgage rates dropped to an average 5.13% last week from 5.22% the week prior, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.13%, following a rollercoaster couple of weeks that saw both a 30-point rate decrease and a 20-point increase. A year ago at this time, the 30-year FRM averaged 2.86%. “Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year,” said Sam Khater, Freddie Mac’s Chief Economist. “The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability. As a result, over the rest…
Existing-home sales dropped for the sixth straight month in July, down 5.9% from June and 20.2% YOY, according to the National Association of Realtors’ most recent data. Sales fell to a seasonally adjusted annual rate of 4.81 million and declined in every major region. At the same time, inventory of unsold homes increased to 1.31 million, or 3.3 months of inventory at the current sales pace. “The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June. Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers,” said NAR Chief Economist Lawrence Yun. The median price for an existing home…
