Morning Roundup (5/9/2022)– Consumer Sentiment Down, Refi Closing Costs

Good Morning! Today is Monday, May 9. Today is Victory Day, a holiday in Russia that has become a celebration of military might. Jill Biden made an unannounced visit to western Ukraine and met with the nation’s First Lady. A shortage of baby formula in the U.S. is causing some retailers to limit how much customers can buy. The Mortgage Note Reports Sentiment Down: Consumers across the country continue to report difficult homebuying conditions, Editor Kimberley Haas writes. OriginPoint Hire: John Stewart is joining OriginPoint as its new EVP of National Sales. Refi Closing Costs: The national average closing costs for a refinance in 2021 were up $88 from 2020 but were still less than 1% of the average refinance loan amount. And in other mortgage and housing news… NAR…

Millennials, Gen Z To Play Major Role In 2022 Housing Market

As homebuyer demographics change, Millennials and Gen Z are set to play a major role in the housing market this year, according to a new report from ServiceLink. ServiceLink’s 2022 State of Homebuying Report uses information from 1,000 homeowners who purchased a home in the last five years to analyze generational trends in homebuying. The report found that Millennials and Gen Z are making big moves in the housing market and are open to non-traditional routes to homeownership. “As bidding wars, low inventory and rising interest rates continue to intensify the competition, buyers have had to get creative in order to come out ahead in this challenging real estate market,” said Dave Steinmetz, president of origination services, ServiceLink.  “Our study…

Applications Continue Dropping

Mortgage loan application volume plummeted by 8.1% last week, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 8.1%%. The adjusted purchase index fell 2%, while the unadjusted purchase index fell 1% and was 12% lower YOY. The refinance index fell a whopping 14% and was down 54% YOY. Refinances made up 44.8% of total applications. Mortgage interest rates jumped by 23 basis points last week, their largest weekly increase since March 2020, due to the Fed’s interest rate hike and the expectation of fewer MBS purchases, Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, noted. “With mortgage rates now at 4.5%, compared to rates at…

MBA: Average Loan Size Reaches Its Second-Highest Amount Ever

Mortgage loan application volume dropped 0.6% last week, though the average purchase loan reached its second-highest amount ever, the Mortgage Bankers Association’s (MBA) weekly survey reported. The seasonally adjusted Market Composite Index, a measure of mortgage loan application volume, fell 0.6%. The seasonally adjusted purchase index fell 3%, while the unadjusted purchase index fell 6% and was 9% lower YOY. The refinance index rose 2% and was down 42% YOY. Refinances made up 65.2% of total applications, driven by a rate decrease to 3.27%, its lowest in four weeks. Though applications fell, purchase loan size increased to an average of $416,200, the second-highest average amount on record. “The elevated loan size is an indication that activity is more on the…

Rate/Term Refinances Reach Lowest Point Since February 2020

Rate lock volume fell 4.7% month-over-month in November, Black Knight’s latest Originations Market Monitor report found. It is the third straight month of overall declines. The drop was driven by rate/term refinance originations, which fell 9.4% from October and almost 65% year-over-year (YOY), its lowest level since February 2020. Rate/term refinance dropped in eight out of eleven months in 2021. Locks on purchase and cash-out refinance fell 3.9% and 2.5% from October, respectively. However, they are still higher than 2020, with purchase locks up 13% YOY and cash-outs up 36% YOY. “While 30-year rates ended November relatively flat from where they were at the start of the month, there was some volatility in rate offerings throughout the month,” said Black…

Lending Fell In Q2, Q3 For The First Time Since 2000

Mortgage lending declined in both Q2 and Q3 2021, the first consecutive decline in two years and the first time since 2000 that lending fell in Q2 and Q3, according to ATTOM’s Q3 2021 U.S. Residential Property Mortgage Origination Report. The report showed that 3.59 million mortgages secured by residential property originated in Q3, up 3% YOY but down 8% from Q2. It is the largest quarterly drop in more than a year, and a surprise considering the second and third quarters are usually peak buying season. Lenders overall issued $1.15 trillion in mortgages in Q3, up 11% YOY but down 6% from Q2, the first quarterly drop since early 2020. Both refinance and purchase lending fell, with refinancing taking…

Commissions Are Falling Alongside Refi Activity

Loan officer commission dropped 17% year-over-year (YOY) in Q3 2021, according to SimpleNexus’ Q3 mortgage loan compensation report. The report cites declining loan volume as the main factor in commission declines, while a roughly 15% rise in loan officer staffing contributed to a ⅓ drop in individual processor incentive compensation. Per-loan commission rates have started falling as well, dropping 2.44% YOY from 102.88 to 100.37 basis points. Declining refinance activity had the biggest impact. Monthly refi commission dropped 37%. Refis have been falling steadily as rates tick up, resulting in the slowest weekly pace of refinancing since January 2020. Interest rates reached 3.14% last week. “We continue to expect weakening refinance activity as rates move higher and borrowers see less…

Refis Hit Down 26% YOY, Lowest Since January 2020

Mortgage loan application volume rose by just 0.3% last week, the Mortgage Bankers Association’s (MBA) weekly survey reports. The Market Composite Index, which measures application volume, rose 0.3% on an adjusted basis. The Refinance Index fell 2% and was 26% lower than a year ago. It’s the Refinance Index’s lowest level since January 2020. The seasonally adjusted Purchase Index rose 4%, while the unadjusted Purchase Index rose 3% compared to the week before, down 9% from the previous year. “Mortgage rates increased again last week, as the 30-year fixed rate reached 3.30% and the 15-year fixed rate rose to 2.59%- the highest for both in eight months. The increase in rates triggered the fifth straight decrease in refinance activity to…

‘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…

Rocket Drops Refi Fee; Will Others Follow Suit?

The Federal Housing Finance Agency announced it is dropping the COVID-era Adverse Market Refinance Fee beginning August 1. But what does that mean for borrowers who were already in the process of refinancing loans? That depends on the lender. Rocket Mortgage notified brokers last week that it is dropping the fee immediately for loans in progress. Others haven’t publicly committed to removing the fee – or did not respond to Mortgage Note requests for comment. “As you know, we already repriced earlier today, instantly passing the savings along to your borrowers on all new registrations and your entire floating pipeline,” Rocket said in an email to brokers. “We’re also in the process of applying the 50 bps credit to your…