Rates Fall But Remain Near 7%

Mortgage rates fell further last week but remain near 7%, putting pressure on affordability. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.95%, down from the week prior’s 6.99%. A year ago at this time, the 30-year FRM averaged 6.69%. The 15-year also fell to 6.17% from 6.29%. A year ago at this time, it was 6.10%. “Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Sam Khater, Freddie Mac’s Chief Economist. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased showing that housing affordability continues to be an ongoing impediment for buyers on the…

CFPB Launches Inquiry Into Mortgage “Junk Fees”

The Consumer Financial Protection Bureau launched a public inquiry into mortgage “junk fees,” which it says hide in closing costs. The Bureau said closing costs have “risen steeply” and cause undue financial stress on both borrowers, who bear the burden of higher prices, and lenders, who have to pass costs along to borrowers in order to offer competitive mortgages. “Junk fees and excessive closing costs can drain down payments and push up monthly mortgage costs,” said CFPB Director Rohit Chopra. “The CFPB is looking for ways to reduce anti-competitive fees that harm both homebuyers and lenders.” Median closing costs in 2022 were $6,000 and are still rising, according to a statement from the Bureau. “The CFPB wants to understand why…

Rates Move Back Up Over 7%

Homebuyers only enjoyed one week of sub-7% rates before the 30-year mortgage moved above that mark again. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.03%, up from the week prior’s 6.94%. A year ago at this time, the 30-year FRM averaged 6.79%. The 15-year also rose from 6.24% to 6.36%. A year ago at this time, it was 6.18%. Rates dipped below 7% the week prior for the first time in more than a month but reversed course on shifting market dynamics. “More hawkish commentary about inflation and tepid demand for longer-dated Treasury auctions caused market yields to rise across the board. This reality, as well as economic signals that have moved sideways over the…

Millennials, Gen Z Dominate Mortgage Market

More mortgages are being taken out by Millennial and Gen Z buyers than their older counterparts, a trend boosted by Zoomers’ thirst for homeownership. A new analysis from Redfin found that two in five — just shy of 40% — of new mortgages issued in 2023 went to homebuyers under 35, while an additional 26.5% went to buyers in the 35-44 age range. Middle-aged buyers between 45 and 54 grabbed just 16.1% of new mortgages, followed by 55-64-year-olds (10.8%) and 65-74-year-olds (5.4%). Younger buyers are dominating the mortgage market due to two major factors: prime homebuying years and the prevalence of cash among older buyers. Younger Americans are always primed to take these top spots because people tend to take…

Purchase Applications Slip, Refis See Boost

Mortgage applications rose slightly last week, buoyed by a refi turnaround even as purchase demand faltered. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — rose by 0.5%, adding to last week’s 2.6% increase. Adjusted purchase applications declined, however, by 2%, while the unadjusted index was down 2% and 17% lower YOY. Refinances instead drove the rising data this week. Rates declined for a second week, down another 10 BPS to 7.08%, their lowest level since April. “The decline in rates led to a small boost to refinance applications, including another strong week for VA refinances. However, the overall level of refinance activity remains low. Purchase applications…

Pending Home Sales Improved In February

Pending home sales increased in February as inventory loosened up and buyers became accustomed to the high-rate environment. NAR’s Pending Home Sales Index rose by 1.6% month-over-month to a reading of 75.6 last month. An index of 100 is equal to the level of contract activity in 2001. Year-over-year, they were down 7%. “While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” said NAR Chief Economist Lawrence Yun. “Ongoing job gains are clearly increasing demand along with more inventory.” All four U.S. regions saw declines in year-over-year sales, while month-over-month sales rose in the Midwest and South. The Northeast and West saw losses from January. Southern states and…

Mortgage Applications Slip In Last Two Weeks Of 2023

The last two weeks of 2023 brought a slump in mortgage applications as buyers continue to grapple with affordability. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – fell 9.4% from the two weeks prior. The data includes adjustments for the holidays. Adjusted purchase applications dropped by 5%, while the unadjusted index fell 34% and was 12% lower YOY. Americans appear to be losing interest in falling rates, which initially sparked some activity in the market. The 30-year fixed ended the year at 6.76%, ticking up very slightly from the week prior but still down more than a full point from its October peak. MBA Vice President and…

Rates Fall Below 7%

Mortgage rates dipped below 7% for the first time since August after the Federal Reserve set the stage for rate cuts in the coming year. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.95%, down from the week prior’s 7.03%. A year ago at this time, the 30-year FRM averaged 6.31%. It is now down nearly 90 bps in the last six weeks. This lowers the monthly mortgage payment for a $400,000 house to $2,118, down $183 from recent peaks. The 15-year fixed rate, on the other hand, rose to 6.38%% from 6.29%. A year ago, it averaged 5.54%. “Potential homebuyers received welcome news this week,” said Sam Khater, Freddie Mac’s Chief Economist.  “Given inflation continues…

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…

Mixed Inflation Data Pushes Rates Up

Mortgage applications slipped slightly last week as rates rose again. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – fell by 0.8%, a much softer decline than the week prior’s 3.1% drop. MBA attributes recent declines to rising rates. The average interest rate for 30-year fixed loans rose from 7.09% to 7.16%, pushing homeownership farther out of reach for many Americans. This is the third straight week of increases. Adjusted purchase applications fell by 0.2%, while the unadjusted index dipped 2% from the week before and was 26% lower YOY. Refinances continued to be hobbled by the high rate environment, down by 2% and 35% lower than the…