Real estate news: Mortgage applications drop
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Real estate news: Mortgage applications drop
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.82% from 6.87%
- Applications for a mortgage to purchase a home still dropped another 4% last week compared with the previous week.
- Applications to refinance a home loan were essentially flat, up just 0.3% for the week.
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Real estate news: Mortgage applications drop
Mortgage interest rates eased very slightly last week, but not enough to get today’s potential homebuyers off the fence.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.82% from 6.87%, with points increasing to 0.59 from 0.57 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association. That is the lowest level since February of this year.
Rates have dropped over twenty basis points in the last few weeks, but applications for a mortgage to purchase a home still dropped another 4% last week compared with the previous week, on the MBA’s seasonally adjusted index. Purchase demand is now 15% lower than it was the same week one year ago. A basis point is one-hundredth of a percentage point.
“Purchase applications decreased as ongoing affordability challenges persist with rates at their current levels and with home-price appreciation still strong in many markets,” said Joel Kan, an MBA economist in the release.
Homebuyers are also likely waiting for interest rates to drop further. The expectation is the Federal Reserve will cut its rate in September. While mortgage rates don’t follow the Fed exactly (they follow loosely the yield on the 10-year Treasury), rates will come down if investors believe inflation is easing.
“I think affordability remains stretched,” said analyst Ivy Zelman in an interview on CNBC’s “The Exchange.” “We’d probably want to see mortgage rates come down 100 basis points, so I think if we had a five handle, even in the high fives, I think the market could see more momentum.”
Applications to refinance a home loan were essentially flat, up just 0.3% for the week. Demand is 38% higher than the same week one year ago, but it is coming off an extremely low level. Rates today are very slightly lower than they were last year at this time.
“Refinance applications were up, driven by conventional and FHA application activity, as some borrowers took the opportunity to act. Furthermore, the conventional refi index was at its highest level since September 2022,” added Kan.
TVReal estate news: Mortgage applications drop
Mortgage applications fell 7.7% in the week ended Feb. 10 as mortgage rates rose after five weeks of declines, the Mortgage Bankers Association said, citing its Weekly Mortgage Applications Survey.
The average contract interest rate for conforming 30-year mortgages of $726,200 or less jumped to 6.39% from 6.18% the week before, while the rate for 30-year fixed-rate mortgages backed by the FHA climbed to 6.25% from 6.14%.
At the same time, MBA’s refinance index fell 13% from the week before, as the refinance share of mortgage activity decreased to 32% of mortgage applications from 33.9% in the preceding week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $726,200 increased to 6.26% from 5.96%, and the average contract interest rate for a 15-year fixed-rate mortgage increased to 5.85% from 5.64%.
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time,” MBA Vice President and Deputy Chief Economist Joel Kan said in a news release. “Potential buyers remain quite sensitive to the current level of mortgage rates, which are more than two percentage points above last year’s levels and have significantly reduced buyers’ purchasing power.”
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CNBC’s Diana Olick joins ‘Squawk Box’ to report on the dropping mortgage demand due to inflation.
Updated: Boston Real Estate Blog 2022
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- Mortgage applications decreased 1.8% last week, according to the Mortgage Bankers Association’s seasonally adjusted index, falling to the lowest level since the beginning of 2020.
- Both refinance and purchase applications took a hit. Mortgage applications to refinance a home dropped 2% for the week and were 8% lower than a year ago.
- The decline came even as mortgage rates fell.
Real Estate Loan Applications Drop
Mortgage applications decreased 1.8% last week, according to the Mortgage Bankers Association’s seasonally adjusted index, falling to the lowest level since the beginning of 2020, before the coronavirus pandemic started to take a toll on the economy.
Mortgage applications to refinance a home dropped 2% for the week and were 8% lower than a year ago. Refinance applications have trended lower than 2020 levels for the past four months, according to the MBA.
Home purchase applications dropped 1% for the week and came in 14% lower than a year ago.
Real Estate Mortgage Interest Rates
Mortgage rates loosely follow the yield of the 10-year Treasury. Mortgage rates dipped despite good economic news, Kan added.
“Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which showed ongoing improvements in the labor market. However, rates continued to move lower – especially late in the week,” he said. “The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates.”
Are mortgage applications up or down in 2021?
Mortgage applications decreased 1.8% last week, according to the Mortgage Bankers Association’s seasonally adjusted index, falling to the lowest level since the beginning of 2020.
How are downtown Boston mortgage rates determined?
Mortgage rates loosely follow the yield of the 10-year Treasury. Mortgage rates dipped despite good economic news
How are home purchase and refinance mortgage applications doing in 2021?
Both refinance and purchase applications took a hit. Mortgage applications to refinance a home dropped 2% for the week and were 8% lower than a year ago.
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Mortgage applications for new-home purchases fell 9% on a monthly basis and 5.9% on a year-over-year basis in May, the Mortgage Bankers Association reported, citing its Builder Application Survey.
“Mortgage applications to purchase a new home decreased in May for the second straight month, while the average Loan size, at $384,000, increased for the fourth consecutive month and reached a new survey high,” said Joel Kan, MBA associate vice president of economic and industry forecasting. “Loan balances continue to rise because of a larger share of sales in the higher end of the market, as well as increased sales prices from strong demand and elevated building material costs.”
The seasonally adjusted annualized pace of sales dropped 3.8% in May on a monthly basis to 741,000 units. The rate of sales reached a survey high of 927,000 units in October 2020, the MBA said in a press release.
On an unadjusted basis, the association estimated that there were 68,000 new home sales in May, down 5.6% from 72,000 sales in April.
By product type, conventional loans composed 73.9% of loan applications in the month, while Federal Housing Administration loans comprised 14.8%, and Veterans Administration loans accounted for 10.4%. The average loan size for new homes rose to $384,323 in May from $377,434 in April.
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The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes loans for home purchases and refinancing’s, fell 14.4 percent to 713.6 in the week ended Nov. 12, the lowest since the July 9 week.
Borrowing costs on 30-year fixed-rate mortgages surged to a two-month high of 4.46 percent in the week, up from 4.28 percent in the previous period. The rate last month reached 4.21 percent, the lowest level in the survey, which has been conducted weekly since 1990.
