Purchase Apps, Refis See Boost As Rates Retreat

Both purchase applications and refis saw increases as rates fell for a fifth consecutive week. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – rose by 7.4%. Adjusted purchase applications increased by 3%, while the unadjusted index was up 4% from the week before and was 37% lower YOY. Refinances saw a big upswing, rising 18% from the week prior. But they remain 75% lower than the same time last year, comprising only 33.9% of total applications. In the past decade, refis averaged 58% of total activity. “Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of…

Permanent Rate Buydowns Continue To Reign For Affordability-Minded Buyers

Rate buydowns continue to soar as borrowers look for ways to combat the affordability crisis, according to new data from Black Knight. In the third week of January, 57% of buyers paid at least a half-point on a permanent buydown, while 44% paid a full point, and almost 25% bought down two or more points. In total, borrowers paid an average of 1.25 points down, at an average of $4,300 per borrower. Pre-pandemic buydowns from 2018 to 2020 averaged only 0.5 points, around $1,500. This is not the high point for buydowns, which peaked in September and October 2022 with 71% of buyers buying down their rates. But it points to a continuing trend of buyers trying to decrease their…

Average Mortgage Rate Moves Closer To 6%

As economists predicted, the 30-year fixed rate fell again this week, moving closer to 6%. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.09%, down from 6.13% the week prior. A year ago at this time, the 30-year FRM averaged 3.55%. The 15-year fixed-rate mortgage fell from 5.17% to 5.14%. A year ago, it averaged 2.77%. “Mortgage rates inched down again, with the 30-year fixed-rate down nearly a full point from November, when it peaked at just over seven percent,” said Sam Khater, Freddie Mac’s Chief Economist.  “According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan,…

Rates Down Again, Purchase Demand “Thawing”

The 30-year fixed rate slipped slightly again last week, prompting some pent-up buyers to lock in a purchase, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.13%, down from 6.15% the week prior. A year ago at this time, the 30-year FRM averaged 3.55%. The 15-year fixed-rate mortgage fell from 5.28% to 5.17%. A year ago, it averaged 2.80%. “Mortgage rates continue to tick down and, as a result, home purchase demand is thawing from the months-long freeze that gripped the housing market,” said Sam Khater, Freddie Mac’s chief economist. “Potential homebuyers remain sensitive to changes in mortgage rates, but ample demand remains, fueled by first-time homebuyers.” Pending home sales have been…

Pending Home Sales Rise, Breaking Six Month Spiral

Pending home sales rose for the first time since May, breaking a six-month streak of declines, according to the National Association of Realtors. The Pending Home Sales Index increased by 2.5% between November and December. Year-over-year it dropped by 33.8%, an improvement over November’s 37%. All four regions saw pending sales fall YOY, but the South and West saw gains month-over-month. “This recent low point in home sales activity is likely over,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.” Mortgage rates fell again last week to 6.13%, drawing some buyers back to the market. Purchase loan applications increased again as…

Loan Apps Rise Again, Buoyed By Refis

Mortgage loan application volume increased again last week, continuing a trend of rising demand as mortgage rates slip. The Mortgage Bankers Association’s weekly survey showed the adjusted Market Composite Index, a measure of mortgage loan application volume, rose by 7%. The results included an adjustment for Martin Luther King, Jr. Day. Refinances drove the increase, up 15% from the week prior as mortgage rates fell to 6.2%, their lowest level since September. They remain 77% lower than the same time last year, however, comprising only 31.9% of total applications. In the past decade, refis averaged 58% of total activity. Purchase demand saw a boost as well, though not as drastic. Applications increased at a seasonally adjusted rate of 3%, but…

Rates Slide To 6.15%

The 30-year fixed rate continued to slip last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.15%, down from 6.33% the week prior. A year ago at this time, the 30-year FRM averaged 3.56 percent. The 15-year fixed-rate mortgage fell from 5.52% to 5.28%. A year ago, it averaged 2.79%. “As inflation continues to moderate, mortgage rates declined again this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern.” Housing construction slid in December to a five-month low. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, while…

Housing Starts Slid Again In December, But Builders Are Optimistic

Housing construction slid again in December to its lowest point since July, but an increase in single-family starts may signal improvement to come. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, down 21.8% from the same time last year, according to data from the U.S. Census Bureau. This is the fourth consecutive decline for these data. It was driven largely by a dip in multifamily construction, which is volatile month to month. The picture for all of 2022 was fairly bleak. In the entire year, only 1 million homes were started, down 10.6% from 2021 and the largest drop since 2009. Permits for new homes fell 1.6% to a rate of 1.33 million. Single-family permits…

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…

Home Price Growth Fell From Q3 To Q4 2022

Annual single-family home price growth dipped from Q3 2022 to Q4 2022, according to Fannie Mae’s Home Price Index. Prices rose by 9.2% YOY in Q4, down from 13.1% in Q3. They increased just 0.2% quarter-over-over when seasonally adjusted, and fell 1% unadjusted. The index measures the average quarterly price change for all single-family properties in the United States, excluding condos. “The rise in mortgage rates over the past year and record inflation have constrained the purchasing power of prospective homebuyers. The resulting affordability pressures are evident in the home price declines of the past two quarters, along with the downturn in home sales,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist.   Demand has dwindled as many…