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The measure of the market? Are mortgage loan applications up or down?

The measure of the market? Are mortgage loan applications up or down?

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The measure of the market? Are mortgage loan applications up or down?

The usually busy spring housing market is underway, but mortgage demand isn’t moving. Application volume was essentially flat last week, dropping 0.7% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.93% from 6.97%, with points decreasing to 0.60 from 0.64 (including the origination fee) for loans with a 20% down payment.

Applications to refinance a home loan fell 2% for the week and were 9% lower than the same week one year ago. Mortgage rates today are still about a half a percentage point higher than they were at this time last year, so recent borrowers have no incentive to refinance. Anyone with an older mortgage than that likely has a rate that is half of what is currently being offered.

Applications for a mortgage to purchase a home decreased 0.2% from the week before and were 16% lower year over year.

Updated: Boston condo for sale blog 2024

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The measure of the market? Are mortgage loan applications up or down?

Mortgage interest rates are over 7%. Sure we have seen rates higher but home prices have also hit an all-time high.

“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates. Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The 30-year fixed mortgage rate decreased to 7.21 percent last week, but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market. The refinance index dropped to its lowest level since January 2023, driven by a 6 percent decline in conventional refinances.”
 
The refinance share of mortgage activity decreased to 30.0 percent of total applications from 30.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.7 percent of total applications.
 
The FHA share of total applications increased to 13.7 percent from 13.2 percent the week prior. The VA share of total applications decreased to 11.3 percent from 11.6 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.4 percent the week prior. [Mortgage Bankers Association]
 
Locally we are not seeing a slowdown in home purchases but homeowners are less likely to want to sell.
 
Updated: Boston Real Estate Blog – 2024

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Mortgage applications fall more than 8% 

Mortgage applications plunged 8.1% on a seasonally adjusted basis during the week ended Feb. 4, the Mortgage Bankers Association said, citing its Market Composite Index. 

Boston Condo Mortgage Rates

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 3.93% from 3.86%, and the average contract interest rate for a 15-year fixed-rate mortgage rose to 3.16% from 3.01%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $647,200 increased to 3.62% from 3.59%. 

On an unadjusted basis, the market composite index, which measures mortgage loan application volume, declined 6%. The refinance index, meanwhile, slid 7% from the previous week and was down 52% from the same week a year ago. The refinance share of mortgage activity decreased to 56.2% of total applications from 57.3% the previous week. 

The seasonally adjusted purchase index fell 10% from the previous week, while the unadjusted purchase index dipped 3% and was 12% lower than one year ago.

Boston Condo Mortage Ratess on the Rise  

“Mortgage rates continued to edge higher last week, with the 30-year fixed-rate climbing to 3.83%,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Rates followed the U.S. 10-year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to growing inflationary pressures and signaled that they will start to remove accommodative policies. With rates 87 basis points higher than the same week a year ago, refinance applications continued to decrease.” 

The adjustable-rate mortgage share of activity was flat at 4.5% of total applications. The FHA share of total applications increased to 8% from 7.7% in the preceding week, while the VA share of applications rose to 10% from 9.1%. The USDA share of applications was flat at 0.4%. 

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“Purchase activity slowed after the previous week’s gain,” Kan added. “Both conventional and FHA purchase applications saw proportional declines, resulting in purchase activity overall dropping 10%. The average loan size again hit another record high at $446,000. Activity continues to be dominated by larger loan balances, as inventory remains tight for entry-level buyers.”

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From The New York Sun:

The number of applications for loans to refinance existing mortgages increased last week to the highest level since February, according to a leading trade group. Also, according to the Mortgage Bankers Association, mortgage applications nationwide rose last week by a seasonally adjusted 2 percent from the week before.

(Applications are down 22.5% from last year at this time, however.)

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