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Mortgage Applications Decline, Rates Back Over 7%
Wed, 21 Feb 2024 13:43:03 GMT

Higher interest rates continued to depress mortgage applications last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, decreased 10.6 percent on a seasonally adjusted basis during the week ended February 16. The volume declined 8.0 percent before adjustment. The Refinance Index declined by 11.0 percent compared to the previous week but eked out a 0.1 percent gain from the level one year earlier. Refinance applications accounted for 32.6 percent of the total, down from 34.0 percent the previous week.   [refiappschart] The seasonally adjusted Purchase Index dropped 10 percent week-over-week and was down 6 percent before adjustment. Purchase applications lagged the same week in 2023 by 13.0 percent.   [purchaseappschart] "Mortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near-term rate cut,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Mortgage applications dropped as a result with a larger decline in refinance applications. Potential homebuyers are quite sensitive to these rate changes , as affordability is strained with both higher rates and higher home values in this supply-constrained market." Other Highlights from MBA’s Weekly Mortgage Applications Survey Loan sizes were changed only slightly, to an average of $381,800 for all submissions and $440,700 for purchase mortgages. The FHA share of applications decreased to 13.2 percent from 13.5 percent and the VA share decreased to 12.1 percent from 13.3 percent. USDA applications accounted for 0.5 percent of the total. The average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) increased to 7.06 percent from 6.87 percent, with points inching up to 0.66 from 0.65. Thirty-year FRM with jumbo loan balances had a rate of 7.16 percent with 0.45 point. The prior week the rate was 7.00 percent with 0.39 point. The average rate for FHA-backed 30-year FRM jumped to 6.91 percent from 6.68 percent and points increased to 1.03 from 0.89. Fifteen-year FRM saw an increase of 8 basis points to an average rate of 6.61 percent while points dropped to 0.77 from 0.94. The average contract interest rate for 5/1 adjustable-rate mortgages (ARM) increased to 6.37 percent from 6.30 percent, with points increasing to 0.71 from 0.60. The ARM share of activity increased from 7.0 to 7.4 percent of total applications.

Construction Numbers Don’t Mirror Growing  Builder Optimism
Fri, 16 Feb 2024 16:10:00 GMT

Even though the National Association of Home Builders (NAHB) reported the third consecutive increase in its measure of home builder confidence, actual residential construction activity fell. The residential construction report for January shows both the rate of permitting and housing starts declined from the previous month, the second straight loss for starts. The U.S. Census Bureau and the Department of Housing and Urban Development said construction began on residential properties at a seasonally adjusted annual rate of 1.331 million units. This was down 14.8 percent from the December rate of 1.562 million. The December rate was, however, a substantial upgrade from the 1.460 million units originally reported. On a year-over-year basis, starts were almost flat, with a decline of 0.7 percent. Single-family starts fell 4.7 percent to an annual rate of 1.004 million units but that was an improvement of 22.0 percent from the prior January. Multifamily starts, at 314,000 units, were down 35.8 percent from December and 37.9 percent on an annual basis. On an unadjusted basis, the report says there were 93,700 units started during the month, 68,700 of them single-family houses. The December numbers were 108,800 and 72,300, respectively. The setback for permitting was more modest. Total authorizations were at an annual rate of 1.470 million, a 1.5 percent dip from 1.493 million in December and an increase of 8.6 percent for the year. The 1.015-million-unit rate for single-family houses marked a 1.6 percent gain for the month and 35.7 percent year-over-year. The permitting rate for multifamily units dropped 9.0 percent and 26.6 percent.

Mortgage Applications Stall on Higher Rates
Wed, 14 Feb 2024 14:02:42 GMT

Higher mortgage rates hindered application activity during the week ended February 9. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier although it did gain 2.0 percent on an unadjusted basis. The Refinance Index was 2,0 percent lower than the prior week and 12.0 percent higher than the same week one year ago. The refinancing share of mortgage applications made up 34.2 percent of the total, down from 35.4 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index decreased 3.0 percent from one week earlier and was 4.0 percent higher before adjustment. The number of applications declined by 12 percent year-over-year. [purchaseappschart] “Application activity was weaker last week, as mortgage rates moved higher across the board. The 30year fixed mortgage rate was up to 6.87 percent – the highest rate since early December 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago .” Additional Data from MBA’s Weekly Mortgage Applications Survey  The overall size of mortgage loans increased only slightly from the previous week to an average of $382,000 but the purchase mortgage amount jumped to $441,300 from $434,800. The FHA share of applications increased to 13.4 percent from 13.1 percent and the VA share dipped 1 percentage point to 13.1 percent. The USDA share of total applications was unchanged at 0.4 percent. The conforming mortgage interest rate of 6.87 percent was 7 basis points higher than the prior week and points increased to 0.65 from 0.59. The average rate for jumbo 30-year fixed-rate mortgages (FRM) was 7.00 percent, up from 6.88 percent, with points decreasing to 0.39 from 0.47. The 30-year FRM with FHA guarantees had a rate of 6.68 percent with 0.89 point. The prior week's rates averaged 6.57 percent with 0.84 point. The average for 15-year FRM jumped 12 basis points to 6.53 percent and points moved to 0.94 from 0.71. The rate for 5/1 adjustable-rate mortgages (ARMs) rose to 6.30 percent from 6.14 percent, with points increasing to 0.6 from 0.48. The ARM share of activity increased to 7.0 percent of total applications from 6.4 percent the prior week.

Mortgage Apps Rise 8%, Purchase Volume Remains Soft
Wed, 07 Feb 2024 13:44:15 GMT

Mortgage application volume rose modestly during the week as mortgage rates marked time.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 3.7 percent on a seasonally adjusted basis compared to the previous period, a week in which the data contained an adjustment to account for the MLK holiday.  On an unadjusted basis, the Index increased 8.0 percent week-over-week.   The Refinance Index gained 12.0 percent from the previous week and was 1.0 percent higher than the same week in 2023. Refinancing accounted for 35.4 percent of the week’s volume, up from 34.2 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index ticked down 1.0 percent and was 6.0 percent higher before adjustment. Volume was 19 percent below its level during the same week one year ago. [purchaseappschart] “Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market. The 30-year fixed mortgage rate was 6.8 percent, a slight increase from last week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates. However, purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply.”

Contract Activity Suggests Uptick in Spring Home Sales
Fri, 26 Jan 2024 17:54:00 GMT

Pending home sales surged last month, far exceeding analysts’ expectations. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI) rose 8.3 percent compared to November. December’s PHSI reading of 77.3 was 1.3 percent higher than a year earlier. The PHSI is based on the number of contracts to purchase single-family homes, townhomes, condominiums, and cooperative apartments. It is viewed as a leading indicator of home sales over the ensuing few months. NAR will publish its report on January’s existing home sales on February 22. Analysts polled by Econoday had forecast an increase in the PHSI of 1.3 percent.  Perhaps because the PHSI posted no change from October to November, the estimates were unusually broad, ranging from an increase of 0.7 percent to 3.9 percent. Trading Economics was slightly closer to the mark with a consensus forecast of 1.5 percent. “The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” said Lawrence Yun, NAR chief economist. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.” Except for the Northeast, regional returns were mostly positive. The PHSI in the Northeast dropped 3.0 percent from last month to 62.3, an annual decline of 3.9 percent.  The Midwest index rose 5.6 percent to 80.5, up 4.3 percent from one year ago.

New Home Sales, Inventory, Pricing. All Good News for Builders and Buyers
Thu, 25 Jan 2024 19:43:04 GMT

New home sales finished 2023 on a positive note , posting seasonally adjusted numbers higher than in both November and the prior December. The U.S. Census Bureau and the Department of Housing and Urban Development said sales of newly constructed homes during the month were at an annual rate of 664,000 units. Further, the November rate was adjusted from 590,000 to 615,000 units. The December estimate is 8.0 percent above the revised November estimate and a 4.4 percent improvement over the pace in December 2022.  Analysts polled by Econoday had a consensus forecast of 650,000. New home prices slipped slightly from a year earlier.  The median price of a home sold in December 2023 was $413,200 compared to $432,100 in December 2023. The average price fell from $495,600 to $487,300. [newhomeprices] On an unadjusted basis, sales last month were estimated at 50,000 units, up from 42,000 in November. For the entirety of 2023, sales totaled 668,000 units, a 4.2 percent increase over the 2022 sales of 641,000. At the end of the reporting period, an estimated 453,000 new homes were available for purchase, projected to be an 8.2-month supply at the current sales pace. This is nearly identical to the assumed inventory in December 2022. [newhomesall] December was a strong month in the Northeast . Sales increased 32.0 percent from November, although it was also the only region coming in lower (they were down 2.9 percent) on an annual basis.  In the Midwest , sales were up 9.2 percent and 6.0 percent over the previous two sales periods and the South posted increases of 10.6 percent and 3.7 percent, respectively. Sales in the West eked out gains of 0.9 percent month-over-month and 0.4 percent on an annual basis.

Weekly Mortgage Application Volume Increased, Along With Rates
Wed, 24 Jan 2024 13:31:46 GMT

Mortgage application activity has increased in each of the three weeks of the New Year, even though two of those weeks were impacted by federal holidays. There was a strong purchase loan component each week as well. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 3.7 percent on a seasonally adjusted basis during the week ended January 19, including an adjustment to account for the Martin Luther King observance. On an unadjusted basis, the Index was down 4.0 percent from the previous week’s level. The Refinance Index’s holiday-adjusted version fell 7.0 percent week-over-week and was 8.0 percent lower than the same week one year ago. The unadjusted Index declined 16.0 percent for the week and 8.0 percent year-over-year. The share of refinance applications dropped to 32.7 percent from 37.5 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index increased 8.0 percent from one week earlier. The unadjusted Purchase Index increased 3.0 percent, remaining 18.0 percent below its level during the same week in 2023.   [purchaseappschart] “Mortgage rates increased slightly last week but, there continues to be an upward trend in purchase activity. Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications declined over the week and remained at low levels. There is still little incentive for homeowners to refinance with rates at these levels.”

Permits, Builder Sentiment Boost Housing Hopes for Spring
Thu, 18 Jan 2024 17:39:16 GMT

December’s housing starts failed to sustain their November growth but permit activity as well as positive news out of the National Association of Home Builders (NAHB) suggested construction could rise again this spring. The U.S. Census Bureau and the Department of Housing and Urban Development said housing starts in the U.S. were at a seasonally adjusted annual rate of 1.460 million units in December, down 4.3 percent for the month. A downgrade of November starts from a 1.560 million rate to 1.525 million still left the month with the highest numbers of the year. December starts were 7.5 percent above pace the prior December pace , and higher than the forecast of 1.425 million from analysts polled by Econoday. Single-family starts were at an annual rate of 1.027 million units, a decline of 8.6 percent month-over-month, while multifamily starts increased 7.5 percent to a 417,000 annual pace. Single-family starts were 15.8 percent higher than the previous December while multifamily starts were down 9.5 percent. [housingchartall] On a non-adjusted basis, construction was begun on 101,200 residential units last month, 69,900 of them single-family homes. In November the relative numbers were 117,400 and 84,700. Construction permits were up 1.9 percent for the month to an annual rate of 1.495 million units and the November estimate was revised upward by 7,000 units. Permitting was 6.1 percent ahead of the rate a year earlier. [housingpermitschart]

Mortgage App Volume Posts Another Gain on Rate Drop
Wed, 17 Jan 2024 13:32:57 GMT

Mortgage application activity continued its strong post-holiday performance during the week ended January 12. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased by 10.4 percent on a seasonally adjusted basis from the previous week’s number. The Index had posted a 10 percent gain during the first week of the year, although that number reflected an adjustment to account for the New Year holiday. On an unadjusted basis, the Index rose 26.0 percent. The Refinance Index increased 11.0 percent from the previous week and was 10.0 percent higher than the same week one year ago. Refinancing accounted for 37.5 percent of total applications compared to 38.3 percent the previous week. [refiappschart] The Purchase Index increased 9.0 percent seasonally adjusted and 28.0 percent before adjustment. It remains down 20 percent on an annual basis. [purchaseappschart] “Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications. The 30-year fixed-rate decreased six basis points to 6.75 percent, the lowest rate in three weeks,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market. Although purchase activity is lagging year-ago levels, refinance applications have improved from their recent low point and have been showing year-over-year gains, albeit at low levels . If rates continue to ease, MBA is cautiously optimistic that home purchases will pick up in the coming months.” 

Mortgage Apps, Week 1: Promising Start or Catch-Up Time?
Wed, 10 Jan 2024 13:36:38 GMT

Mortgage activity rose significantly during the week ended January 5, but it faced a pretty low bar. Loan application numbers were adjusted to account for the New Year’s holiday on the first day of the week and measured against the four days of Christmas Week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 9.9 percent on a seasonally adjusted basis compared to the prior week and was 45 percent higher without adjustments. [refiappschart] The holiday-adjusted Refinance Index rose 19 percent from the previous week and 53 percent on an unadjusted basis. The two versions were 30 percent and 17 percent higher year-over-year. Refinancing accounted for 38.3 percent of total applications, up from 36.3 percent the previous week. [purchaseappschart] The seasonally adjusted Purchase Index gained 6 percent for the week and was 40 percent higher on an unadjusted basis, but activity still lagged the same week in 2023 by 16 percent.   “Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines. Mortgage rates and applications have been volatile in recent weeks and overall activity remains low. ”

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