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  1. 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

  2. Mortgage Applications Rise as Buyers Rush to Beat FHA Fee Hike

    By on April 20, 2011

    According to the Mortgage Bankers Association’s latest Weekly Applications Survey, mortgage applications (for last week) were up 5.3 percent from the week before on a seasonally-adjusted basis.  Refinance applications were up 2.7 percent from the week earlier, while purchase applications were up ten percent.  The rise in applications for purchases were lead by a 17.6 percent increase in government purchase applications.  Michael Fratantoni, VP of Research and Economics for the MBA commented:

    “Purchase application volume jumped last week largely due to another sharp increase in applications for government loans.  Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums.  Refinance activity increased somewhat as rates dropped to their lowest level in a month towards the end of the week.”

    The four week moving average for purchase applications is up 2.5 percent as we move into the spring buying season, while the four week moving average for refinancing is down 5.7 percent.  Refis continue to make up a shrinking share of total mortgage origination activity, only accounting for 58.5 percent of all applications, down from 60.3 percent the week prior.

    According the the MBA’s statistics, the average rate on a 30-year fixed rate mortgage fell from 4.98 percent to 4.83 percent last week, while the 15-year fixed rate mortgage rate dropped 10 basis points to 4.07 percent.

    Despite the increase, this is not an especially strong report, as most of the gains last week were driven by the impending rise in FHA mortgage insurance.  Ideally, we would like to see a greater uptick in purchase applications as we move into the home buying season.  The housing market remains plagued by fears of diminishing home values and rising foreclosures, and I think these factors are keeping many buyers on the sidelines this summer.

    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. Canadians: Possible Saviors For Distressed Housing Markets

    By on March 31, 2011

    canadian real estate investors, canadian home buyers

    Distressed housing markets can try looking north for help. With home prices low in the American Sun Belt and the Canadian dollar strong, Canadians might be doing more than sunbathing during spring vacations stateside.

    One in five Canadians would now consider purchasing real estate in the United States, reveals a survey from BMO Bank of Montreal. Lower prices for American homes and a strong Canadian dollar are boosting their interest in U.S. properties.

    Housing prices in the U.S. overall have dropped 30 percent from their peak four years ago, but prices where Canadian snowbirds traditionally visit have dropped even more. For instance, prices have dropped 44 percent in Tampa, Fla., 54 percent in Phoenix, 57 percent in Las Vegas, and 49 percent in Miami.

    “Now, with the American economy and employment gaining strength, home sales should pick up and put a floor under soft prices,” says Sal Guatieri, a senior economist at BMO Bank of Montreal. “We expect prices to rise over time as the overhang of unsold homes eases.” Continue Reading…

    Category: Housing Market

  5. Tough Mortgage Lending Criteria Hurting Home Sales

    By on March 25, 2011

    mortgage guidelines, home loan requirementsGetting a mortgage is becoming more difficult for many potential home buyers. That’s one of the reasons why investors are starting to dominate purchases of short sales and bank-owned properties, concludes a survey of real estate agents.

    Investors, typically using cash to buy homes, accounted for 23.5 percent of home purchases in February, an increase from 19.9% percent in just two months, reports the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Cash purchases of homes set a record, reaching 33.7 percent of purchases in February.

    “We are seeing investors come back into the market. One investor told me that one house he wanted came on Wednesday p.m. and had 9 offers by Thursday a.m.,” stated New Jersey real agent participating in survey.

    Mortgage application requirements may get even tougher later this year and next year as the government withdraws its support for the housing market and tougher regulations implements new regulations. For instance, the conforming loan limit for jumbo mortgages in high-cost is scheduled to retreat from $729,750 to $625,000 on Sept. 30 and new regulations will require lenders to keep a stake in riskier, or non-qualified, mortgages. Those changes will probably mean higher mortgage rates and tough qualification requirements for many borrowers. Continue Reading…

    Category: Purchase

  6. Retiring Baby Boomers Will Prompt A Home Remodeling Explosion

    1 By on March 24, 2011

    Baby boomers have changed everything they’ve touched by their sheer numbers. Now they will create a home remodeling explosion as they sell their older homes and retire, predicts a study from the Joint Center for Housing Studies at Harvard University.

    The oldest baby boomers will be turning 65 this year, the first of the group that will reach retirement age in the next 20 years, and the younger home buyers moving into their homes will want to renovate, upgrade and repair the dwellings, baby boomer homes, fha 203k home renovation loans, home salespredicts the report, “Housing Turnover by Older Owners: Implications for Home Improvement Spending as Baby Boomers Age into Retirement.”

    Home buyers can use the FHA 203(k) home renovation loan to finance home purchases and renovations with one loan. The home appraisal is based on the home values after renovation is completed, allowing larger valuations which helps home buyers qualify for home loans.

    Home owners over 55 accounted for about a third of all home sellers between 1997 and 2007 and that figure has been trending up and will continue to increase, predict the report’s authors, George Masnick, Abbe Will and Kermit Baker. Continue Reading…

    Category: Housing Market

  7. 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

  8. Home Prices Have Over-Corrected In Many States, Experts Say

    By on March 21, 2011

    Home prices have over-corrected in over half of all states based on per capita income, say economists at PMI Mortgage Insurance.

    Using 1995 as a benchmark, PMI calculates that 35 states have home prices below what they should be (based on disposable incomes), and are very affordable.

    Home prices in some states, such home prices, home values, housing marketsas Michigan, outpaced incomes in the real estate bubble, but have since significantly over-corrected, PMI says in its latest Housing Mortgage Market Review. Those states also include Alabama, Georgia, Idaho, Illinois, Missouri, Montana, Nevada, New Mexico, and West Virginia.

    That doesn’t mean home values will rebound immediately. They could fall even more before recovering.

    Home prices in other states, namely Indiana, Arkansas, Kentucky, Kansas, Iowa, Mississippi, Nebraska, Ohio, Oklahoma, South Dakota, Texas and Wyoming, are far too low even though they had no bubble. Home prices in those areas should recover as jobs return.

    New York and California home prices remain too high relative to incomes. Desirable living conditions and limited space could support higher home values, or home prices could fall even more. Others states in this group include Alaska, California, Hawaii, Massachusetts, New Jersey, New Hampshire, Oregon, South Carolina, as well as Washington DC. Continue Reading…

    Category: Housing Market

  9. More Americans Are Optimistic About A Housing Market Recovery

    1 By on March 10, 2011

    home price trends, housing market recovery, first-time home buyersMore Americans are confident that home values will recover in the next year or two, indicates a survey by Prudential Real Estate and Relocation Services Inc.

    The survey reports that 68 percent of potential home buyers think home prices will recover in a year or two. Last year, 47 percent predicted home values would increase. Also, 86 percent believe real estate is a good investment despite recent housing market troubles. Potential home buyers, the survey points out, realize that this a good time to buy a home, but if they are current homeowner they are worried about selling their existing home for a decent price.

    Given home price trends and current mortgage rates, first-time home buyers are in a better position, provided they can qualify for a mortgage and have enough for a down payment.

    A recent Fannie Mae survey fewer people believe a home is a safe investment, 64 percent compared to 70 percent last year. The difference could be due to potential home buyers feeling more optimistic and sellers feeling disillusioned. Continue Reading…

    Category: Housing Market, Purchase

  10. Jumbo Mortgage Rates, Stock Values Boost Sales Of Luxury Homes

    By on March 7, 2011

    At least one housing market saw a huge jump in home sales last year: high-end homes.

    For instances, sales of California homes over $1 million increased from 18,621 in 2009 to 22,529 in 2010, a 21 percent, reported DataQuick Information Systems, a San Diego-based data provider. In fact, sales of homes and condominiums for over $1 million increased in all 20 major metro areas lastjumbo mortgage rates, luxury house year, reported DataQuick. Those metro areas saw an 18.6 percent increase in high-end home sales on average.

    Low mortgage rates helped boost the increase in luxury home sales, but a rebounding stock market and lower home prices were major factors. Buying a million dollar home calls for a jumbo mortgage, which entails a higher mortgage rate and stricter lending guidelines like a higher down payment. Although many luxury home buyers use cash, lower mortgage rates helped motivate them to purchase homes. The difference, or spread, between jumbo mortgage rates and rates for smaller conforming mortgages has narrowed considerable since the height of the financial crises.

    But the wealthy worry less about mortgage rates than other home buyers, said DataQuick President John Walsh. Continue Reading…

    Category: Jumbo Mortgage

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