It’s finally happened: average mortgage rates topped 7% for the first time in 20 years, after hovering just under it for several weeks, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 7.08%, up from 6.94% the week prior. A year ago at this time, the 30-year FRM averaged 3.14%. “The 30-year fixed-rate mortgage broke 7% for the first time since April 2002, leading to greater stagnation in the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will…
The Mortgage Calculator has entered the originations game and is now offering loans through a new entity, Mortgage Calculator Company LLC, the company announced. The company first went solo back in September, when it left its parent company and became a standalone correspondent lender with 200 loan officers. “We put in a lot of work to become a lender,” President Nicholas Hiersche said at that time. “We started as a branch at a bank, to a branch at a brokerage, to a branch at a lender. We are very excited to finally be in total control of our business.” Specializing in Non-QM products, Mortgage Calculator is offering DSCR loans, Bank Statement loans, and Fix and Flip loans. Borrowers can now…
Homebuyers saw affordability plunge in September as the typical monthly payment rose $102 from August. The national median payment applied for by applicants jumped to $1,941 from $1,839 in the month prior, the Mortgage Bankers Association reported. MBA’s Purchase Applications Payment Index fell for a second consecutive month, up 5.5% to a reading of 163.6. 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 increase reverses four months of improvement from an index high of 164.2 in May. “With mortgage rates continuing to rise, the purchasing power of borrowers is shrinking. The median loan amount in September was $305,550…
New home sales fell in September to a seasonally adjusted annual rate of 603,000, down 10.8% from August and 17.6% YOY, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. The month-over-month figure is slightly better than expected. Economists polled by The Wall Street Journal predicted home sales to fall 13.4%. The seasonally‐adjusted estimate of new houses for sale at the end of August was 462,000, representing a supply of 9.2 months at the current sales rate. September saw mortgage rates soar from the high-5%s to nearly 7% at month’s end, pricing many potential buyers out of the market. Home shoppers who could have afforded a mortgage payment earlier this year now may…
Mortgage loan application volume surprised no one with another week of declines, accompanied by the 10th consecutive week of rising interest rates, according to the Mortgage Bankers Association’s weekly survey. Interest rates finally topped the dreaded 7% mark, reaching 7.16%. This is their highest point since 2001. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 1.7%. Application activity is at its slowest pace since 1997. The adjusted purchase index fell 2%, while the unadjusted purchase index decreased by 3% and was 42% lower YOY. Purchase applications are now at their slowest pace since 2015, 40% slower than a year ago. “Despite higher rates and lower overall application activity, there was a slight increase in…
Home price appreciation continued to cool in August though growth remained elevated from a year earlier, according to new data. The S&P CoreLogic Case-Shiller National Home Price NSA Index saw home prices decelerate, posting a 13% annual gain in August, down from 15.6% in the previous month. This is the largest monthly deceleration in the history of the index, pushing July’s record to second place. Craig J. Lazzara, Managing Director at S&P DJI, called current trends a “forceful deceleration” of home prices. “These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since,” he said. “As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive…
The Federal Housing Finance Agency has made significant changes meant to improve lending access to low-income and first-time homebuyers. At the Mortgage Bankers Association’s 2022 Annual Convention & Expo, FHFA Director Sandra L. Thompson announced that the agency had validated and approved the FICO 10T credit score model and the VantageScore 4.0 credit score model for use by Fannie Mae and Freddie Mac. The two models will replace the Classic FICO, which the GSEs have used for two decades. Thompson said the models will take multiple years and significant effort to introduce to the industry. But will the end result will be “improved accuracy and a more inclusive approach to evaluating borrowers.” The new models improve accuracy by accounting for…
Interest rates have dampened demand for mortgages, but some areas remain prime opportunities for lenders, according to a new study from TransUnion. The study, “Where Will Growth In Mortgage Originations Come From?,” analyzed the credit-active U.S. population between Q2 2017 and Q1 2022. It flagged consumers with a variety of traits, such as VA eligibility and income status, who withdrew their applications or may have been turned down for a mortgage. The results showed mortgage-qualified consumer segments that have “purchase origination potential.” Of the approximately 121 million low- and moderate-income (LMI) consumers studied, 95% were credit eligible for a mortgage. Buyers should have at least a 620 credit score when applying for a conventional loan. 86% of VA-eligible consumers were…
Mike Mell has been named Senior Vice President of Freedom Mortgage’s Wholesale Division, the company announced in a press release. Mell will oversee Freedom’s national sales team, including regional sales managers and account executives throughout the U.S. “I’m thrilled to be leading Freedom Mortgage’s Wholesale Division. We’re already one of the nation’s top wholesale lenders with expertise in helping mortgage brokers close loans, especially VA and FHA products. In fact, our government lending experience is unmatched,” he said. “I look forward to expanding our wholesale business and helping our sales partners thrive by providing their clients with the financing to achieve their homeownership dreams.” Mell brings nearly three decades of mortgage industry experience to the company. He joined Freedom Mortgage…
Prepayment activity dropped to a nearly 22-year low in September as interest rates rose to nearly 7%. According to Black Knight’s September 2022 First Look. prepayment activity slid by 14.9% to a single-month mortality rate of 0.57% in September, besting January 2019’s record of 0.59%. It’s the lowest level since November 2000. Inflation is a factor in low prepayment activity, says Jacob Channel, LendingTree’s senior economic analyst. “Since the start of the year, inflation has increased significantly and as a result, many households likely have less cash that they can allocate toward non-necessities like putting extra money toward their mortgage payment,” he told MarketWatch. Black Knight also reported that the national delinquency rate fell 0.2% from August to 2.78%. This…
