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  1. Refinance Applications Continue to Rise as Mortgage Rates Hover Near 2011 Lows

    By on May 25, 2011

    According to the MBA’s Weekly Mortgage Applications Survey, mortgage applications were up slightly last week, rising 1.1 percent from the week prior.  From the report:

    “The Market Composite Index, a measure of mortgage loan application volume, increased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.9 percent compared with the previous week. The Refinance Index increased 0.9 percent to its highest level since December 10, 2010. The seasonally adjusted Purchase Index increased 1.5 percent from one week earlier. The unadjusted Purchase Index increased 0.8 percent compared with the previous week and was 3.1 percent higher than the same week one year ago.”

    The four week moving average for overall applications is up 5.2 percent.  The four week moving average for refinances is up 7.1 percent, while the four week moving average for purchases is up 1.2 percent.  Typically purchase activity picks up around this time of year, so such a minimal increase in purchase activity does not presage a strong summer selling season.  It is worth noting that there are record numbers of cash home buyers right now, which accounts somewhat for the weak number of purchase applications.

    These relatively weak application numbers come despite mortgage rates that are hovering near 2011 lows.  The MBA saw mortgage rates increase slightly, as the 30-year fixed rate mortgage rose from 4.60 percent to 4.69 percent, while the average rate on a 15-year fixed mortgage rose from 3.75 percent to 3.78 percent.

    Category: Mortgage Rates

  2. FHA Fee Hike Cause Mortgage Applications to Fall

    By on April 27, 2011

    Mortgage applications declined 5.6 percent last week, according to the Mortgage Bankers Association’s Weekly Applications Survey.  This follows on the heels of a 5.3 percent increase the week prior.  The swings were fueled by buyers rushing to beat an increase in FHA mortgage insurance premiums.  Says Michael Fratantoni, VP of Research and Economics for the MBA:

    “Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect.  This decrease reverse a 20 percent increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this deadline.”

    Total mortgage application volume was down 5.6 percent (seasonally adjusted).  Refinance applications were down 0.6 percent, while purchase applications dropped 13.6 percent.  This is the lowest level since late February.  Refinance activity rose to 61.6 percent of mortgage applications, up from 58.5 percent the week before.  According to the survey, mortgage rates decreased slightly, with the average 30-year fixed rate mortgage falling from 4.83% to 4.80%.  15-year fixed rate mortgages fell to 4.03% from 4.07%.

    There’s not a lot of new information to be garnered from this report.  Applications have been trending sideways for the better part of a year now.

    Category: Mortgage Rates

  3. Mortgage Refinance Applications Continue to Fall as Mortgage Rates Rise

    By on April 13, 2011

    Quick update:

    The Mortgage Bankers Association released their Weekly Mortgage Applications Survey this morning for the week ending April 1, 2011.  Overall mortgage applications declined 6.7% on a seasonally adjusted basis. Refinance applications were down 7.7 percent while purchase applications were down 4.7 percent.

    The four week moving average for purchases is up 0.7 percent while the four week moving average for refinances is down 5.3 percent.  Refi activity now constitutes 60.3 percent of all mortgage applications, down from 61.2 percent the week prior.  Refi activity has been trending down as mortgage rates increase.  According to the MBA, the average mortgage rate on a 30-year fixed rate mortgage rose from 4.93 percent to 4.98 percent last week.

    There’s not a lot more to say about this report.  If you check out this excellent chart from Calculated Risk, you can see that mortgage applications have more or less been trending sideways for the better part of a year after spiking due to the first time home buyer tax credit.  Everything indicates that home sales and refinancing will remain at their current moribund levels for the near term.

    Category: Mortgage Rates

  4. MBA: Mortgage Applications Fall to 1997 Levels

    By on April 6, 2011

    Quick update:

    According to the Mortgage Bankers Association, mortgage applications declined again, falling 2.0% from the week prior.  Refinance applications were down 6.2 percent, while purchase applications were up 6.7%, hitting their highest point of the year.  Michael Fratantoni of the MBA commented:

    ““Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997.  The increase last week was due to a sharp increase in applications for government loans. Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums that became effective last Friday.  Rates were flat last week, but refinance activity fell, as the pool of borrowers who have both the incentive and the ability to qualify for a refinance continues to shrink.”

    As Fratantoni says, the increase in purchases last week was likely due borrowers rushing to complete their FHA mortgage prior to the rates increase.  Unfortunately, it does not necessarily show that the market is getting any stronger as we head into the spring home buying season.

    Between declining home prices and the continued contraction of available credit, 2011 continues to be a rough year for the housing market, and there are few signs of recovery to be had.

    Category: Mortgage Rates

  5. Mortgage Applications Increase Marginally as Spring Home Buying Season Approaches

    By on March 23, 2011

    According to a report from the Mortgage Bankers Association, mortgage applications increased 2.7 percent on a week-over-week basis during the week ending March 18, 2011.  Refinance activity was up 2.7 percent from the week prior, and purchase activity also increased 2.7 percent.  The four week moving average for purchases is up 1.0 percent, and the four week moving average for refinancing is up 3.3 percent.

    Refinancing made up about 66 percent of all mortgage activity, the same as last week, but down substantially from the fall months.  Refi activity has been diminishing steadily as mortgage rates have increased nearly 3/4 of a point since they hit their all-time low last October.  According to the MBA, the average rate on a 30-year fixed-rate mortgage was at 4.80 percent, up marginally from 4.79 percent the week before.

    Mortgage applications have essentially moved sideways for the last couple of months.  According to this chart from Calculated Risk, applications for purchases have been moving sideways for the better part of a year, and are at about the same level they were at in 1997. That we haven’t seen an increase in applications as we move into the spring doesn’t bode particularly well for the spring home buying season.

    Category: Mortgage Rates

  6. Home Builders Are Cautiously Optimistic About Spring Home Buying

    By on March 16, 2011

    Home builders are cautiously hopeful home buying, home construction, mortgage lending guidelinesthat an improving economy will boost construction and home buying this spring.

    Builder confidence in the newly built, single-family home market improved by just one point in March, rising to 17 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). That’s the best the index has been since May 2010 just before the federal home-buyer tax credit program expired.

    “Builders are cautiously looking forward to the spring home buying season in hopes that improving economic conditions will help bring more buyers to the table,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

    The bad news that that home buyers still face the same problems as before: competition from short sales and foreclosures, difficulties selling existing homes, appraisals that are below construction cost due to the inappropriate use of distressed properties as comps, and restrictive mortgage lending conditions for both buyers and builders.

    Housing starts in February were down 20.8 percent from January and 20.8 percent from February 2010, the U.S. Census Bureau and Department of Housing and Urban Development announced today. Housing completions were down 13.9 percent from January and 13 percent from February 2010

    Continue Reading…

    Category: Housing Market

  7. Both Small And Large Banks Blast Foreclosure Settlement From State AGs

    By on March 14, 2011

    banks criticize foreclosure prevention proposalA proposed foreclosure settlement from state attorneys general is drawing attacks from different quarters, including both small and large banks and House Republicans.

    Community banks are blasting the proposal from state AGs and federal regulators as stealth cramdown legislation.

    Prompted by investigations into shoddy foreclosure practices, the “term sheet” would define how major banks offer foreclosure alternatives and complete foreclosures. Among other actions, it would require banks to cut mortgage balances as a first option and open the door to mortgage balances to be reduced in bankruptcies.

    The settlement “will likely cause additional upheaval and confusion,” according to the Independent Community Bankers of America, a trade group representing small banks. “In fact, the term sheet appears to be de facto regulation done outside of both the Congress and the established rule making process thus opening a back door to cramdown.”

    In a cramdown, a bankruptcy judge forces the lender to write down the borrower’s mortgage balance. Continue Reading…

    Category: foreclosures

  8. Mortgage Applications Spike Last Week

    By on March 9, 2011

    The newly released Mortgage Bankers Association Weekly Mortgage Applications Survey (for the week ending March 4th) showed that applications for mortgages spiked last week, rising 15.5 percent.  It is worth noting that applications were way down the previous week, which contained the Presidents’ Day holiday, and there was no adjustment in the numbers for the holiday.  If we look to the fine people at Calculated Risk for the four week moving average for applications (to smooth out the data a little bit), we can see that mortgage applications are basically at the level they were in 1997.

    According to the report, the Refi index was up 17.2 percent and the purchase index was up 12.5 percent.  The report says that the average rate on a 30-year fixed rate mortgage increased from 4.84 to 4.93 percent during the week ending March 4th, and that 15-year fixed rate mortgages remained the same at 4.17 percent.  Michael Fratantoni, VP of the MBA commented:

    “Taking into account typical seasonal patterns, purchase applications rose to their highest level of the year last week.  On an unadjusted basis, purchase application activity is the highest since last May.  An improving job market is beginning to pave the way for an improving housing market.  Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications”.

    Continue Reading…

    Category: Mortgage Rates

  9. Including Rents On Credit Reports Can Help First-Time Home Buyers Qualify For Lower Mortgage Rates

    By on March 7, 2011

    first-time home buyer, credit score, mortgage qualificationsSome first-time home buyers could find qualifying for a home loan and getting lower mortgage rates easier now that Experian, a major credit bureau, has started collecting rent payment histories.

    Building good credit is one of the biggest obstacles to qualifying for a home loan and finding the best mortgage rates available. Yet rent payments, usually a renter’s largest financial obligation, are typically not included in credit scores. Neither is phone, Internet, electric bills or other utilities, for that matter.

    Credit scores, including the FICO score used by most mortgage lenders, are based on credit cards and personal loans like car loans and student loans. Borrowers with little use for loans or credit cards have what lenders call “thin files” that can prevent them from qualifying for a mortgage.

    So, in the odd world of credit scoring, you can get a mortgage if you have $10,000 of debt but not if you have $10,000. This credit scoring quirk is especially troublesome for younger borrowers, who tend to lack credit histories, and immigrants who lack a tradition of using credit cards and debt. Continue Reading…

    Category: First Time Home Buyer

  10. Mortgage Lending Standards Still Tight And Housing Remains Weak, Says Fed Report

    By on March 3, 2011

    home loan requirements, mortgage guidelines, housing marketsWhile hints of inflation are emerging and the job market improved in January and February, mortgage lending standards remain tight and the housing industry is still anemic, according to the Federal Reserve Beige Book report released yesterday.

    “Recent activity in residential real estate varied, but overall sales and construction remained at low levels across all districts,” the survey stated.

    Lending requirements remained tight in all districts. Atlanta actually reported tighter home loan standards. Although an improving job market is definitely good for the economy, stringent mortgage lending requirements are not good news for homeowners or home buyers hoping to take advantage of current mortgage rates.

    New York saw a stable housing market with some improving markets. Other Fed districts reported mixed or sluggish real estate activity. For instance, home prices continued to fall in the Philadelphia area, but mainly at the high end of house prices. The New England district said home sales continued to decline significantly in Rhode Island, Connecticut, and Maine, but increased modestly in Massachusetts and New Hampshire. Continue Reading…

    Category: Housing Market

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