Cooling Rates Boosts Refis Again

Mortgage applications rose again as rates slipped for a third week and refis rallied. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — rose by 1.9%, adding to last week’s 0.5% increase. Adjusted purchase applications declined, however, by 1%, while the unadjusted index was down 2% and 11% lower YOY. Refinances once again drove the rising data this week. Rates declined to 7.01%, their lowest level in seven weeks. “Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications. VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is…

Mortgage Applications Just Barely Stay Positive

Mortgage applications just barely stayed positive last week, ticking up slightly. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – increased by 0.5%. Adjusted purchase applications rose by 2%, while the unadjusted index was down 0.1% from the week before and 32% lower YOY. The average interest rate for 30-year fixed loans fell for a third week from 6.77% to 6.73%. Though it’s not a huge drop, any dip will pull some rate-sensitive buyers off the sidelines. This is especially true for new construction, which is having a boom moment thanks to the crippling shortage of existing homes for sale. “Purchase applications increased, driven by a 2% gain…

Rate Locks Rose In January, But The Good News May Not Last

Rate lock volumes increased across the board in January, finally breaking a nine-month downward streak, as buyers began stepping out before the spring season. Lock volumes rose 32% last month, according to Black Knight’s Originations Market Report. “Mortgage rates declined in January, continuing a trend that began in early November 2022. Conforming rates dropped 36 basis points from where they were at the start of the year, and we saw that rates associated with those FHA/VA/jumbo locks all came down in kind,” said Kevin McMahon, president of Optimal Blue, a division of Black Knight. “Triggered by this pullback, rate lock volumes rose for the first time since March 2022, driven by declining interest rates and seasonal tailwinds, snapping a nine-month…

Prepayments Drop To 20-Year Low

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…

Milo Offering First Crypto Refi Product

Crypto-lender Milo Credit has launched the first-ever cryptocurrency refinance offering, according to a press release. The refinance product uses crypto assets and property as the basis of the loan, allowing currency-holders to pledge both to cash out up to 100% of their home equity value in U.S. dollars. It is geared towards homeowners who sold their crypto or took out a short-term crypto loan to buy a home in cash, allowing them to extend the repayment term to 30 years and access more financing. Milo says it also requires less collateral than other similar products, just 1x the loan amount or less compared to 2 or 3x. “Based on the success of our crypto mortgage offering, we are now able…

Loan Applications Fall Again, Rates Keep Going Up

Mortgage loan application volume fell 3.7% last week, continuing a downward spiral as mortgage rates hit their highest point since mid-July, the Mortgage Bankers Association’s weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, decreased by 3.7%. The adjusted purchase index fell 2%, while the unadjusted purchase index dropped 4% and was 23% lower YOY. The refinance index dropped by 8% and made up 30.3% of total applications, down 83% from the same time last year.  “Mortgage rates and Treasury yields rose last week as Federal Reserve officials indicated that short-term rates would stay higher for longer. Mortgage rates have been volatile over the past month, bouncing between 5.4% and 5.8%,” said Joel Kan,…

Applications Reverse Downward Spiral, Up 6.6%

Mortgage loan application volume reversed course after five straight weeks of decreases, rising 6.6% last week, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, increased by 6.6%. The adjusted purchase index rose 8%, while the unadjusted purchase index was up by 18% and was 16% lower YOY. The refinance index rose 4% and was down 76% YOY and made up 31.7% of total applications. ARM activity fell to 8.1% of total applications.  Joel Kan, MBA Association Vice President of Economic and Industry, noted that applications rose despite an interest rate explosion last week. The 30-year fixed-rate hit 5.65% last week, up 25 basis points and the highest level…

Refi Closing Costs Still Less Than 1% Of Loan Amount In 2021

The national average closing costs in 2021 for a single-family property refinance were up $88 YOY, but still less than 1% of the average refi loan amount, according to CoreLogic’s annual Refinance Closing Cost Report. The average closing cost was $2,375, up 3.8% from 2020’s $2,287. The average refi loan amount was $304,909. By contrast, the national average for purchase closing costs was $3,860. The main difference in closing costs between the two are owner title insurance and inspection fees common for purchase transactions, but less often required for refis. Most third-party fees were still lower for refis. “In 2021, homeowners were still able to get good deals on both interest rates and closing costs,” said Bob Jennings, executive, CoreLogic…

Origination Activity Fell Again In December

Origination activity fell for the fourth consecutive month in December as higher rates and seasonal slowdown pushed rate locks down, according to Black Knight’s December 2021 Origination Market Monitor. Rate locks fell 18.3% from November to December and 35% year-over-year (YOY), fueled by a 22.5% drop in locks on purchase loans and a 17.1% drop in rate/term refinances. Rate/terms refis hit their lowest point in two years at the end of 2021. Locks on cash-out refis also dropped by 10% from November, though they are up 18% YOY thanks to incredible gains in home equity. The share of refinances rose to 48% due to the decline in purchase locks, though average refi credit scores were down 20 points YOY as…

‘If You Haven’t Re-fi’d, Do So Now:’ Experts Predict Inflation, Fed Will Drive Up Rates

A new poll from Fox News shows 9 in 10 Americans are worried about inflation, and they aren’t alone. A growing consensus among housing and banking analysts is that, while the Federal Reserve gets most of the attention, the real force impacting mortgage rates in the coming months is inflation. And that’s a factor much harder for policymakers to impact than the Fed. “If you haven’t yet refinanced, do so now,” says Greg McBride, chief financial analyst for Bankrate. “The likelihood is that we see higher rates, not lower rates in the months ahead.” While an entire industry has grown up around ‘Fed watching’ — tracking every hint dropped by Federal Reserve Chairman Jerome Powell and his counterparts — inflation…