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Mortgage Applications Decline Despite Falling Mortgage Rates
By Michael Kraus on March 2, 2011

This morning, as with every Wednesday, the Mortgage Bankers Association published their Weekly Mortgage Applications Survey. They found that total mortgage applications fell 6.5 percent from the previous week (the numbers are not adjusted to account for President’s Day, which was a holiday for many people.

Refinance applications fell 6.5 percent from the prior week, while purchase applications were down 6.1 percent from the week before. The four week average for all applications is off 2.5 percent, while the four week moving averages for refinances and purchases are down 2.7 percent and 2.2 percent respectively.

Refinancing continues to make up the bulk of all mortgage applications, accounting for 64.9 percent of activity, down from 65.7 percent the week before. This represents a sharp decline from October, when refinancing made up 83.1 percent of all applications, coinciding with record low mortgage rates. According to the MBA, mortgage rates have declined for three consecutive weeks, with the average rate on a 30 year fixed rate mortgage falling from 5.00 percent to 4.84 percent last week. Rates have decreased primarily because of unrest in the Middle East and the spiking price of oil.

Total Mortgage consistently has some of the best mortgage rates in the industry, consistently beating the national average. If you are looking to refinance your current mortgage or purchase a new home, call us at 877-858-2503 to speak with one of our licensed mortgage professionals. See our low rates below.

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Category: Mortgage Rates
Americans More Upbeat About Home Prices Despite Wariness Of Homeownership
By Michael Kling on February 28, 2011
Americans are slightly more upbeat about housing markets even though they remain leery of investing in a home and pessimistic about the overall economy. And younger Americans, Hispanics, and African-Americans are generally more positive about homeownership than others, despite being hard hit by the housing downturn.

So says Fannie Mae’s latest national housing survey.

According to the survey:
- Seventy-eight percent of those surveyed believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010.
- Almost two-thirds believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.
- Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment
- More than one-third of Hispanics (34%) and African-Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.
Although Americans are slightly more optimistic about home values increasing, they are more wary of home buying, the survey shows. The percentage of Americans who believe that buying a home is a safe investment fell from 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment. Continue Reading…
Category: Housing Market
Mortgage Applications Nose-dive as Mortgage Rates Rise
By Michael Kraus on February 16, 2011

It’s Wednesday, and you know what that means: MBA Weekly Mortgage Application Survey Day! Let’s take a look, shall we?

Total Mortgage applications decreased 9.5 percent (seasonally adjusted) from the week prior. Refinance activty fell off 11.4 percent from the week before, while purchase applications fell 5.9 percent from the week prior. Refinance activity is now at its lowest point since July, 2009. Michael Fratantoni, VP of Research and Economics for the MBA commented:

“Mortgage rates remained above 5 percent last week, up almost a full percentage point from their October lows, and refinance volume continues to drop. Applications for home purchases also declined on a seasonally adjusted basis. Buyers have not returned to the market as rising rates have reduced affordability, to some extent.”

The four week moving average for purchases is down 1.9 percent, while the four week moving average is down 6.2 percent. Refi activity now constitutes 64 percent of all mortgage activity, down from 66 percent last week.

The MBA predicted that total mortgage volume would fall to $966 billion in 2011, down from $1.505 trillion in 2010, and $1.995 trillion in 2009. They also predicted that refinance volume would collapse, falling from $1.032 trillion in 2010 to $352 billion in 2011. Unfortunately, it looks as though these predictions are coming to fruition. That demand for houses remains incredibly weak, and appears to be getting weaker almost guarantees that home values will continue to decline for the foreseeable future.

Category: Mortgage Rates
Buying a Home May Be More Affordable Than Ever
1 By Michael Kling on February 9, 2011

Buying a home may be more affordable than ever in many areas. That’s the conclusion of Moody’s Analytics, according to an article in The Wall Street Journal.

Homes are many areas were just as affordable or more affordable at the end of September as they were between 1989 and 2003 in 47 markets, says Moody’s Analytics. It based its conclusion on the ratio of median home prices to annual household incomes in 74 markets.

In a recent blog, we reported that Trulia.com concluded that owning a home is more affordable than renting in most major cities. The online home-shopping service said it’s more affordable to buy a two-bedroom home in 72 percent of America’s 50 largest cities than it is to rent a similar home.

The ratio of home prices to annual household income was at its highest point in late 2005 when it reached 2.3, noted the Journal article. It had fallen to 1.6 last September. That was the lowest its been in at least 35 years, or since the data have been collected, and well below the historical average of 1.9 between 1989 and 2003. Continue Reading…

Category: Housing Market
Mortgage Applications Down Again As Rates Continue to Rise
By Michael Kraus on February 9, 2011

This morning the Mortgage Bankers Association released their Weekly Mortgage Applications Survey for last week. Total mortgage application activity declined 5.5 percent on a seasonally adjusted basis from the week prior. The refinance index fell 7.7 percent from the week prior, while the seasonally adjusted purchase index fell 1.4 percent. Michael Fratantoni, the Vice President of Research and Economics for the MBA commented:

“Mortgage rates increased last week as many incoming economic indicators continue to show stronger growth than had been anticipated. Refinance volume continues to be low, as fewer homeowners with equity have any incentive to refinance. We are at the beginning of the spring buying season, but purchase volume remains weak on a seasonally adjusted basis.”

Mortgage rates have increased steadily since they hit their all-time low point last fall. According to Freddie Mac, the average rate on a 30-year fixed rate mortgage was as low as 4.17 percent in October. As of last week, the average rate on a 30-year fixed mortgage was up to 4.81 percent.

The MBA predicts that total mortgage volume will plummet in 2011, declining to a total of $966 billion, down from $1.505 trillion in 2010, and $1.995 trillion in 2009. Further, total refinance volume is predicted to decline from $1.032 trillion in 2010 to $352 billion in 2011.

Barring a turnaround in the employment rate or a steep decline in mortgage rates, 2011 could be a lean year for those in the mortgage industry.

Category: Mortgage Rates
Despite Rise in Applications, Mortgage Demand Remains Weak
1 By Michael Kraus on February 2, 2011

As with every Wednesday morning, it is time to take a look at the Weekly Mortgage Applications Survey from the Mortgage Bankers Association. The MBA found that total mortgage applications rose 11.3 percent on a seasonally adjusted basis from the week prior.

The number of people applying to refinance their homes also rose, 11.7 percent from the week before. Applications for purchases rose 9.5 percent from the week before. It is worth noting that the earlier week contained the Martin Luther King, Jr. Holiday, which skews the numbers for last week somewhat.

Michael Fratantoni, VP of Research and Economics at the MBA commented:

“Applications increased this week relative to the holiday week. Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent.”

Refinance activity continues to diminish in comparison to purchase activity, falling from 70.3 percent to 69.3 percent of all mortgage applications. The drop in refinance applications correlates directly to a rise in mortgage rates. Since hitting all time lows in the fall, the average rate on a 30-year fixed rate mortgage has increased nearly three quarters of a point.

Purchase applications have been steadily trending downward for the past three years, except when they were briefly buoyed by the first time home buyer tax credits.

Category: Mortgage Rates
Financial Crisis Inquiry Report Missed Some Major Culprits
By Michael Kling on January 31, 2011

The Financial Crisis Inquiry Commission’s report released Friday missed some major culprits of the mortgage melt down and financial crisis.

The commission blame regulators for failing predict or stop the crisis. One of the more colorful quotes from the commission: “What else could one expect on a highway where there were neither speed limits nor neatly painted lines?”

“The sentries were not at their posts,” the commission concluded.

Yet the commission didn’t mention that Congress appoints those sentries and passes legislation that gives them their marching orders. Congress dismantled the Glass-Steagall Act that separated Wall Street investment banks and depository banks and remained silent, or even cheered, as then Federal Reserve Alan Greenspan praised “modern capital theory” and said financial should be self-regulated.

Any regulator trying to clamp down on loose mortgage lending standards or ridiculously high leveraged investment banks five or 10 years ago would have been fighting against prevailing public attitudes against government regulations, not to mention millions of dollars of lobbying money. Continue Reading…

Category: Housing Market, Mortgage Regulations
Refinance Applications at Lowest Point in a Year as Mortgage Rates Increase
By Michael Kraus on January 26, 2011

It’s Wednesday, and you know what that means: The Mortgage Bankers Association Weekly Mortgage Applications Survey! Don’t everyone get excited all at once.

First it should be noted that last week contained a federal holiday, Martin Luther King, Jr. Day. How much that day off impacted the numbers is not entirely clear. That said, mortgage applications of all types collapsed last week. The Market Composite index, which measures all applications, fell 12.9 percent from the week prior (all numbers seasonally adjusted). The Refinance Index fell 15.3 percent from the week earlier and is at its lowest point in a year. The Purchase Index fell 8.7 percent from the week before, hitting its lowest levels since October. Refinance applications make up 70.3 percent of total applications, down from 73 percent the week before.

Mortgage rates did tick up slightly last week, with the average rate on a 30 year fixed rate mortgage rising from 4.71 percent to 4.74 percent. The average rate on a 5/1 ARM actually decreased, from 3.72 percent to 3.69 percent.

This report isn’t good news for anyone, especially those of us in the mortgage industry. The ongoing implosion of refinance activity is especially concerning, as it has made up the lion’s share of mortgage business for much of the last year. This great chart from Calculated Risk shows the purchase index juxtaposed with the purchase index’s four week moving average. It suggests that home sales will continue to lag in the coming months, which shouldn’t be a great shock to anyone, since prices are expected to continue to decline as well.

Category: Mortgage Rates
Online Mortgage Approvals And Rate Quotes Will Become More Common
By Michael Kling on January 26, 2011

You’ll soon be more likely to able to get a mortgage online. And not just download a PDF application form. You’ll be more likely to complete the mortgage application and get your mortgage interest rate quote, paperwork disclosures and a conditional approval online.

Online mortgage application volume will triple by 2013, according to a survey done by Lieberman Research Group, market research firm, and sponsored by Mortgagebot, which provides technology to mortgage lenders.

Banks in the survey expect their online application volume to grow from 4 to 13 percent of their total volume by 2013 – a 225 percent increase. Online application volume at credit unions will climb to almost one-third of their total volume. Credit unions already use online technology to take a fifth of their mortgage applications, but by 2013 they expect their online applications to grow from 20 percent to 31 percent of total volume—a 55 percent increase.

About four out of 10 lenders now have no web-based loan applications. Less than one in five lenders have so-called smart lending applications that let you really complete a home loan application online. The rest have PDF or HTML forms you can download and fill out. But those have severe limitations. For one, you’re supposed to fill out the whole form, even if you really don’t need to, and they don’t give specific quotes for current mortgage rates. Continue Reading…

Category: Mortgage Interest Rates, Mortgage Rates, Refinance
Mortgage Applications Rise as Mortgage Rates Drop
By Michael Kraus on January 19, 2011

Quick update here:

As with every Wednesday, the Mortgage Bankers Association issued its weekly mortgage applications survey for the week prior. Total application volume was up 5.0 percent on a seasonally adjusted basis from the week prior. Refinance applications were up 7.7 percent from the week earlier, while purchase applications were down 1.9 percent from the prior week.

Said Michael Fratantoni, the MBA’s Vice President of Research and Economics:

“Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy. Refinance applications have picked up, as borrowers take advantage of lwoer rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon.”

Refinancing now accounts for 73 percent of all mortgage activity, as refinance activity has rebounded for the last three weeks after hitting an eight month low in December. This makes sense, as mortgage rates rose through much of November and December, but have come back down for the last three weeks. For the purposes of those in the mortgage industry, it has to be somewhat concerning how dependent the industry is on refinancing, and how dependent refinancing is upon low rates.

Category: Mortgage Rates