Mortgage Applications Skyrocket 49 Percent – Largest Weekly Jump Since 2008
RISMEDIA, Thursday, January 15, 2015
Mortgage applications made big moves last week, increasing 49.1 percent from one week earlier and showcasing the largest jump since November 2008, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 9, 2015.
The Market Composite Index, a measure of mortgage loan application volume, increased 49.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 119 percent compared with the previous week. The Refinance Index increased 66 percent from the previous week to the highest level since July 2013. The seasonally adjusted Purchase Index increased 24 percent from one week earlier to the highest level since September 2013. The unadjusted Purchase Index increased 83 percent compared with the previous week and was 2 percent higher than the same week one year ago.
“The US economy and job market continued to show signs of strength, but weakness abroad and tumbling oil prices have led to further declines in longer-term interest rates,” says Mike Fratantoni, MBA’s Chief Economist.
“Mortgage rates reached their lowest level since May of 2013, and refinance application volume soared, more than doubling on an unadjusted basis, and up 66 percent after adjusting for the fact that the previous week included the New Year’s holiday. Conventional refinance volume increased to a greater extent than government refinance volume. Applications for larger refinance loans increased more than 4 times relative to the previous week. The average conventional refinance application increased to $298,700 from $233,500 the prior week. Although there was a somewhat smaller increase for government refinance volume, VA refinance applications increased by 50 percent. VA loans tend to be larger than FHA and USDA loans, and hence are more responsive to a given rate change.”
“In addition to the drop in rates, and news of improvement in the job market, there was additional positive news for prospective homebuyers with evidence that credit availability has increased somewhat, and with FHA’s announcement of a decrease in their mortgage insurance premiums. Purchase application volume increased by almost 24 percent, with stronger growth for conventional applications than for government loans. Purchase application volume was at its highest level since September 2013, increased on a year over year basis in the aggregate, and notably increased across most loan size categories, particularly for the conforming, middle of the market loan segments that had been weak for much of the past year. FHA purchase application volume was up by 17 percent for the week on a seasonally adjusted basis.”
The refinance share of mortgage activity increased to 71 percent of total applications from 65 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.9 percent of total applications.
The FHA share of total applications decreased to 7.5 percent this week from 9.3 percent last week. The VA share of total applications decreased to 9.7 percent this week from 10.7 percent last week. The USDA share of total applications decreased to 0.8 percent from 0.9 percent last week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.89 percent, the lowest level since May 2013, from 4.01 percent, with points decreasing to 0.23 from 0.28 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.88 percent, the lowest level since May 2013, from 3.99 percent, with points decreasing to 0.23 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.71 percent, the lowest level since May 2013, from 3.81 percent, with points decreasing to -0.05 from -0.03 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.16 percent, the lowest level since May 2013, from 3.24 percent, with points remaining unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 2.94 percent, the lowest level since October 2014, from 3.19 percent, with points decreasing to 0.46 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
RISMEDIA, Wednesday, December 03, 2014
The 30-year fixed mortgage rate on Zillow(R) Mortgages is currently 3.76 percent, down one basis point from this time last week. The 30-year fixed mortgage hovered around 3.75 percent last week before settling at the current rate.
“Rates continued to slide last week, and are now down more than a half of a percentage point from their mid-September peak,” said Erin Lantz, vice president of mortgages at Zillow. “Strong economic data suggests rates should move higher, but weak demand for new loans has kept rates low. This week we expect to see some volatility as markets react to Friday’s job report, but anticipate rates to increase modestly by week’s end.”
Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site, and reflect the most recent changes in the market.
These are not marketing rates, or a weekly survey.
The rate for a 15-year fixed home loan is currently 2.97 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.76 percent.
Purchase Mortgage Application Activity
Zillow predicts tomorrow’s seasonally adjusted Mortgage Bankers Association Weekly Application Index will show purchase loan activity increased by 15 percent from the week prior. Zillow combines loan requests made on Zillow Mortgages last week with the previous week’s Mortgage Bankers Association (MBA) Weekly Application Index to predict the MBA’s Weekly Application Index for purchase loans, which will be released tomorrow.
For more information about this prediction, visithttp://www.zillow.com/research/mortgage-app-index-part-one-7016/.
States’ rates are available at: http://www.zillow.com/mortgage-rates.
RISMEDIA | Monday, April 07, 2014
Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates relatively unchanged from last week.
The 30-year fixed-rate mortgage (FRM) averaged 4.41 percent with an average 0.7 point for the week ending April 3, 2014, up from the previous week when it averaged 4.40 percent. A year ago at this time, the 30-year FRM averaged 3.54 percent.
“Mortgage rates were little changed amid a week of light economic reports,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “Of the few releases, real GDP was revised up slightly to 2.6 percent growth in the fourth quarter of 2013. The private sector added an estimated 191,000 jobs in March, which followed an upward revision of 39,000 jobs in February according to the ADP Research Institute. Also, the Institute for Supply Management reported the manufacturing industry rebounded from a soft February but was still below market consensus.”
Additionally, the 15-year FRM averaged 3.47 percent with an average 0.6 point, up from the previous week when it averaged 3.42 percent. A year ago at this time, the 15-year FRM averaged 2.74 percent.
Results show that the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.12 percent this week with an average 0.5 point, up from the previous week when it averaged 3.10 percent. A year ago, the 5-year ARM averaged 2.65 percent.
The 1-year Treasury-indexed ARM averaged 2.45 percent with an average 0.4 point, up from last week when it averaged 2.44 percent. At this time last year, the 1-year ARM averaged 2.63 percent.
For more information, visit www.FreddieMac.com.
By Keith Loria | RISMEDIA, Sunday, February 23, 2014
In January, the Consumer Financial Protection Bureau’s new qualified mortgage rule went into effect with a goal of helping borrowers understand the true costs of the mortgage they apply for. Also referred to as the ability-to-repay rule, it functions as a way to stop lenders from lending money to borrowers who can’t afford to make those payments over time, thus saving the frustrations and problems that arise when they can’t.
According to the CFPB, its plan is expected to limit the number of foreclosures in the years ahead and eliminate many of the conditions that helped create one of the biggest real estate bubbles in U.S. history.
“The ability-to-repay rule is intended to prevent consumers from getting trapped in mortgages that they cannot afford, and to prevent lenders from making loans that consumers do not have the ability to repay,” reads a statement on the CFPB website. “Certain types of mortgages are more likely to become a debt trap for the borrower, so the new rule lays out basic guidelines that lenders can follow. They give lenders greater certainty that they are meeting the ability-to-repay requirement.”
With the new guidelines in place, there will no longer be no-doc loans, where a loan officer simply writes down figures based on the applicant’s word, without verifying the information. From now on, a lender must assess whether a borrower will be able to repay the loan, not just in the short run, but throughout the term of the mortgage.
To be eligible for a qualified mortgage, one must have a total monthly debt-to-income ratio of no more than 43 percent. That means that when you add up mortgage payments and other debt repayment like credit cards or car loans, the total has to be less than $43 for every $100 in income you earn on a monthly basis.
The loan must also fit into one of three categories: The monthly loan payment plus the borrower’s other debt payments cannot exceed 43 percent of the borrower’s gross monthly income; the loan must qualify to be purchased or guaranteed by a government-sponsored enterprise or be insured or guaranteed by a federal housing agency; or the loan must be made by a smaller lender that keeps the loan in its portfolio and does not resell it.
To be considered a qualified mortgage, a lender may not charge excessive upfront points and fees (capped at three percent of the loan) and the loan cannot be longer than 30 years in length. Additionally, interest-only loans and negative amortization loans may not be considered.
If one was to fall behind on their mortgage, the new rules provide some leverage as servicers will need to wait approximately four months before starting a foreclosure proceeding so there’s ample time to request a loan modification. If a homeowner applies for help, the servicer can’t simultaneously move forward with a foreclosure proceeding, and the homeowner will have the right to assistance from the mortgage servicer to help them with their options.
To learn more about the ability-to-repay rule, contact our office today.
Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission.
RISMEDIA, Thursday, February 20, 2014
Freddie Mac recently released its U.S. Economic and Housing Market Outlook for February showing that despite the Federal Reserve’s taper activity, long term rates have eased over the past month, providing a chance for some borrowers who are holding older mortgages an opportunity to refinance.
“It appears mortgage rates may have given the market a reprieve for a month or so and provided some borrowers another chance at refinancing, especially those folks that may be holding older mortgages,” says Frank Nothaft, Freddie Mac vice president and chief economist. “However, if rates continue their upward trend, it will be difficult for many families to purchase a home without seeing some income growth. Rising home prices and interest rates along with little to no income growth has resulted in a substantial erosion of homebuyer affordability over the past year. Therefore, jobs and income growth are necessary for 2014 to turn in another gold-medal performance for the housing recovery.”
The lackluster labor market report for January resulted in a slow start for the residential sector. Only 113,000 jobs were created, less than the 194,000 per month the U.S. averaged for 2013.
Despite the Federal Reserve tapering activities, 10-year Treasury yields and fixed mortgage rates dipped about 0.3 percentage points between early January and early February, breathing a bit more life into refinance activity in the mortgage market.
Based on 30-year mortgage-backed securities outstanding for Fannie Mae, Freddie Mac, and Ginnie Mae in January 2014, we estimate more than $800 billion in securities with a coupon of at least 5.0 percent are in the money and would benefit by refinancing.
Approximately half of the borrowers who refinanced held their previous loan for seven years or longer, according to the Freddie Mac fourth quarter refinance report.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission.
RISMEDIA, Saturday, January 18, 2014— The 30-year fixed mortgage rate on Zillow(R) Mortgage Marketplace is currently 4.23 percent, down 16 basis points from 4.39 percent at this time last week. The 30-year fixed mortgage rate hovered near 4.39 percent for the majority of the week before plummeting to 4.29 percent on Friday. Rates continued to fall over the weekend and early this week.
“Rates dipped after Friday’s jobs report revealed employment below expectations by a wide margin. Although disappointing, the jobs report on its own is unlikely to offset the overall upward trend in rates,” said Erin Lantz, director of mortgages at Zillow. “This week, we expect rates to remain fairly stable as markets await additional data that might reinforce or contradict the relatively subdued economic tone set by the jobs report.”
Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgage Marketplace site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.
The rate for a 15-year fixed home loan is currently 3.20 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.83 percent.
View the current rates for 30-year fixed mortgages by state at http://www.zillow.com/mortgage-rates.
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