Could Portable Mortgages Thaw A Frozen Housing Market?

By ERIN FLYNN JAY The concept of mortgage porting, or transferring the terms of an existing loan over to a new property, has gained popularity as Americans locked into low interest rates try to figure out ways to navigate the current housing market. It is estimated that trading up to a 25% more expensive home would more than double the average mortgage holder’s monthly payment at current interest rates. Even moving to a similarly-priced home in the same neighborhood would increase principal and interest payments by 40%. Advocates for portable mortgages say if homeowners could keep their current interest rates, they would be more likely to sell their homes and buy a new one. That, in turn, would help unfreeze…

Applications Picked Up Last Week, Reversing Downturn

Mortgage applications pulled back from a weeks-long stretch of declines, increasing last week across the board. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index—a measure of mortgage loan application volume—increased by 9.7%, reversing the week prior’s 5.6% dip. Adjusted purchase applications rose by 11%, while the unadjusted index was up by 13% and was 8% lower YOY. The data is adjusted to include the President’s Day holiday. Rates moved down slightly but not by much, reaching 7.02%. This is elevated from the beginning of the year, but rate-sensitive buyers may be inclined to lock in here before they move any higher. “The latest data on inflation was not markedly better nor worse than expected, which…

Rates Top 7%, Stifling Applications

Rising rates sent mortgage applications spiraling last week, sidelining homebuyers and forcing refis to a standstill. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 10.6%, piling onto the week prior’s 2.3% dip. Adjusted purchase applications slipped by 10%, while the unadjusted index was down by 6% and was 13% lower YOY. Rates shot up to 7.06% on the heels of less-than-ideal inflation data from January. The Fed’s preferred inflation index came in hotter than expected for January, and Wall Street pared back its bets on rate cuts from the Central Bank, now predicting they won’t come until at least May. “The much-anticipated CPI report is…

Applications Reverse, Refis Fall

Mortgage applications are swinging up and down, falling last week as rates posted increases. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 2.3%, countering the week prior’s 3.7% rise. Adjusted purchase applications slipped by 3%, while the unadjusted index increased by 4% and was 12% lower YOY. Rates rose to 6.87%, their highest point since December, but have stayed in the mid-6% range since the beginning of 2024. “Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago,”  said Joel Kan, MBA’s…

Refinances Drive Application Surge As Rates Hit 5-Month Low

Refinance applications drove a spike in mortgage applications last week as rates slipped to nearly 7%. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – saw a 7.4% boost, up from the week prior’s 2.8% increase. Adjusted purchase applications jumped by 4%, while the unadjusted index fell 1% from the week before and was 18% lower YOY. The data highlights borrowers’ rate sensitivity, as the 30-year fixed rate slipped to 7.07%, its lowest point since July. A recent round of positive disinflation data put downward pressure on rates. Analysts feel more optimistic about the possibility of Federal monetary policy changes in 2024. “Borrowers who had seen rates near…

MBA Annual Convention And Expo Kicks Off In Philadelphia

By KIMBERLEY HAAS The Mortgage Bankers Association’s chief economist and his team had some good news for those in attendance of their annual convention and expo on Sunday afternoon. Total mortgage origination volume is expected to be $1.95 trillion in 2024, up from the $1.64 trillion projected for 2023. At the same time, volume is predicted to increase 19% by loan count, with 5.2 million loans expected next year. Michael Fratantoni, chief economist and senior vice president of research and industry technology, said members just have to make it through the winter. “In terms of origination volume, we think 2023 is the low point,” Fratantoni said, adding that many lenders have had five or six quarters of production losses. In…

MBA Chief Economist: Expect Mortgage Originations To Decline In 2023

By KIMBERLEY HAAS Mortgage originations are expected to decline in 2023 as market factors continue to present challenges for those in the industry. Michael Fratantoni, the Mortgage Bankers Association’s chief economist and senior vice president of research and industry technology, said during a session at the National Advocacy Conference in Washington, DC, this week that after the whirlwind of 2020 and 2021, the residential slowdown which started in 2022 will continue through this year. “This has been an extraordinarily tough couple of years for mortgage lenders. Origination volume dropped 50% from ’21 to ’22,” Fratantoni said. “We’re forecasting another 20% decline in 2023 to a level of about $1.8 trillion.” Although the recent banking market uncertainty has not helped, Fratantoni…

Purchase Loans See Double-Digit Boost

Mortgage loan application volume saw a double-digit increase last week as sinking rates led to a purchase demand rebound. The Mortgage Bankers Association’s weekly survey showed the adjusted Market Composite Index, a measure of mortgage loan application volume, jumped by 27.9%. Purchase demand increased at a seasonally adjusted rate of 25% and an unadjusted rate of 32%. Though it remains 35% below last year’s levels, the increase is good news for brokers whose businesses have been impacted by affordability issues and high rates. Mortgage rates fell to 6.23% last week. “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall,”  said Mike Fratantoni, MBA’s SVP and Chief…

Monthly Mortgage Costs Fell In November, But Are Still Up 66% YOY

Homebuyers are finally starting to see some moderation in prices as the market corrects.  The cost of a new mortgage fell 4.8% in November as mortgage rates plunged, according to Zillow’s latest Market Report. This is only the second time mortgage costs have declined in the past 19 months. Falling home values and shrinking mortgage rates forced prices to cool. Rates dropped 57 basis points in November alone.  The typical U.S. home saw its value shrink 0.2% from October to November, and is down 0.5% from a peak in June. Renters also reaped the benefits of declining values, with rents seeing their largest single-month drop in the seven-year history of Zillow’s data. Affordability remains a challenge. Monthly mortgage costs are…

Loan Apps Continue Downward Spiral

Mortgage loan application volume fell another 2% last week, according to the Mortgage Bankers Association’s weekly survey. Interest rates rose to 6.81%, their highest point since 2006. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 2%. The adjusted purchase index fell 2%, while the unadjusted purchase index decreased 2% and was 39% lower YOY. The refinance index dropped by 2% and was 86% lower than the same time last year. Refis made up 29% of total applications. The ARM share of activity dipped slightly from last week as the 5/1 interest rate jumped 20 basis points from 5.36% to 5.56%. “The ARM share of applications remained quite high at 11.7%– just below last week’s…