Rates Top 7%, Stifling Applications

Rising rates sent mortgage applications spiraling last week, sidelining homebuyers and forcing refis to a standstill. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 10.6%, piling onto the week prior’s 2.3% dip. Adjusted purchase applications slipped by 10%, while the unadjusted index was down by 6% and was 13% lower YOY. Rates shot up to 7.06% on the heels of less-than-ideal inflation data from January. The Fed’s preferred inflation index came in hotter than expected for January, and Wall Street pared back its bets on rate cuts from the Central Bank, now predicting they won’t come until at least May. “The much-anticipated CPI report is…

Applications Rise, Reversing After A Dip

Mortgage applications shot up last week, reversing a slip, as rates remain stable into February. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – increased by 3.7%, countering the week prior’s 7.2% dip. Adjusted purchase applications slipped by 1%, while the unadjusted index increased by 6% and was 19% lower YOY. Rates actually rose slightly, clocking in at 6.8%, but have stayed in the mid-6% range since the beginning of 2024. “Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market,” said Joel Kan, MBA’s Vice President and…

UWM Introduces Refi Discount Program

United Wholesale Mortgage is making a push for refinances as rates have moderated. Company leaders announced Refi 100 this week, a temporary program allowing its broker partners to offer discounts of 100 basis points for conventional rate-and-term refinances. The discount can be applied to new locks through March 29.  Loans originated by UWM must be at least 365 days from the previous note date to qualify, but no seasoning is required for non-UWM loans. The move comes at the beginning of what may be a good moment for refis, which saw a boost last week as rates moderated. They’re up by 2% and account for 34.2% of total mortgage applications, an increase. In 2023, three million mortgages were originated at…

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…

Mortgage Applications Pushed Down By Weak Refis

Mortgage applications continued to sink last week, driven by continued refinance weakness. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – fell by 0.8%, down slightly compared to the week prior’s 2.9% decrease. Adjusted purchase applications actually rose by 1%, while the unadjusted index dipped 11% from the week before and was 27% lower YOY. Refinances drove the decline, dropping 5% and seeing their weakest levels since the beginning of this year. They currently make up 29.1% of total applications. In the past decade, refis averaged 58% of total activity. The refi downturn led to the seventh dip in applications in eight weeks and their lowest levels since…

Originations See Largest YOY Decline In Two Decades

Mortgage originations saw their largest annual decline in 21 years, further evidence that the housing boom is coming to an end. Originations fell 47% YOY in Q3, according to ATTOM Data’s Q3 2022 U.S. Residential Property Mortgage Origination Report. Quarter-over-quarter they were down 19%, the sixth consecutive drop. Lenders issued a total of $636.5 billion worth of mortgages in Q3. By dollar count, that’s down 22% from Q2 and 46% YOY. It’s the largest dip in loan dollar volume since at least 2001. HELOC lending increased for the fifth time in six quarters, but the boost was overwhelmed by the slump in purchase and refinance origination. “There are no surprises in this quarter’s loan origination numbers, as the unprecedented jump…

Rate Locks Dip To New Low, Refis Hit Hard

Origination activity continues to sink as the market corrects, with refinances seeing major drops. Black Knight’s October 2022 Originations Market Monitor report found that rate lock dollar volume dropped 14.3% month-over-month to its lowest level since February 2019. Refinances have been hit especially hard, making up just 14% of all origination activity in October. Cash-out refis, which had previously seemed resilient due to widespread equity gains, fell 25.1% from September and are down 83.6% YOY. Rate/term refis sank an additional 15.7% and are now down 92.6% YOY. “With interest rates now at their highest level in 20 years, the refi market is rapidly approaching a bottom,” said Scott Happ, president of Optimal Blue, a division of Black Knight.  “Indeed, our…

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…

IMB Profits Fell In 2021, Layoffs Loom Heading Into 2022

After a record-breaking year for independent mortgage banks, profits declined by 75 basis points in 2021, according to the Mortgage Bankers Association’s (MBA) Annual Mortgage Bankers Performance Report. Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $2,339 on each loan they originated in 2021, down from the record $4,202 per loan in 2020. Average production volume totaled $4.9 billion per company, up from $4.5 billion in 2020. But production expenses took a toll on profits, reaching their highest level since 2008, the first year of MBA’s report. Personnel expenses for sales, fulfillment, and production support all rose while revenues fell. “2021 was another stellar year for independent mortgage bankers, with production profits well above…

Loan Applications Fall To Lowest Point Since Spring 2019

Mortgage loan application volume fell by 6.3% to its lowest level since the spring of 2019, the Mortgage Bankers Association’s (MBA) weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 6.3%. The adjusted purchase index fell by 3%, while the unadjusted purchase index fell by 3% and was 9% lower YOY. The refinance index fell 10% and was down 62% YOY. Refinances made up just 38.8% of total applications, down from 40.6%. Mortgage rates hit 4.90% in their fourth straight week of increases, putting further pressure on dwindling refinances. Rates are now up 1.5 percentage points from the same time last year. “The hot job market and rapid wage growth continue to…