According to new data from the Mortgage Bankers Association’s Weekly Applications Survey, the size of the average loan to purchase a home has reached the highest level in the history of the survey. The average loan is now $280,500. This is due, in part, to the fact that interest rates on mortgages with jumbo balances are low by historical standards. In fact, they are even lower than rates on loans with conforming balances, which is not typically the case. But it is also consistent with a trend toward rising purchase activity for larger loan amounts, the release said. Also, the MBA’s survey found that overall demand for mortgage applications fell 3.3 percent last week. The Refinance Index was down 4 percent from the previous week and purchase activity dropped 3 percent. The decline follows a 4.3 percent increase in demand the week before. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all U.S. retail residential mortgage applications. More here.
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As the spring home buying season gets under way, demand for loans to purchase homes has been increasing. In fact, according to the Mortgage Bankers Association’s Weekly Applications Survey, purchase application volume was up 3 percent last week from the week before. It was the third consecutive week the Purchase Index – which is an indicator of future home sales – has increased. Despite the rising demand for loans to buy homes, total mortgage loan application volume was down 1.6 percent, due to a 5 percent drop in refinance demand. The refinance share of total mortgage activity is now at 51 percent, down from 53 percent one week earlier. Industry forecasts have predicted a slowing of refinance demand this year, as the market shifts to one dominated by increased sales activity. Also in the report, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances was unchanged from the previous week. Interest rates for jumbo loans rose slightly and the average rate for loans backed by the FHA fell from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
With last year’s price and mortgage rate increases, the estimated monthly house payment for a median-priced, three-bedroom home has risen, according to a new analysis from RealtyTrac. But, though affordability levels have fallen, buying a home was still cheaper than renting in 91 percent of the 325 counties included in the report. Daren Blomquist, vice president at RealtyTrac, said the monthly cost of owning a home is still less than renting in the majority of markets but a combination of rising home prices and increasing interest rates during the second half of 2013 has caused the cost of owning a home using traditional financing to jump over the last year. In fact, the estimated monthly payment – including mortgage, insurance, taxes, maintenance, and subtracting the estimated income tax benefit – increased an average of 21 percent from a year earlier. The increase was driven, in part, by a 10 percent spike in median prices across the 325 counties included in the analysis. More here.
In 2006 – the final year of the housing bubble – 6.48 million homes were sold. Last year, sales of previously owned homes reached 5.09 million. It was the strongest year of sales since the bubble burst and a 9.1 percent improvement on 2012’s totals, according to new data released by the National Association of Realtors. Lawrence Yun, NAR’s chief economist, said housing has experienced a healthy recovery over the past two years. Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates, and a large pent-up demand driving the market, Yun said. Though housing lost some momentum in the fall, sales were up 1.0 percent in December and ended the year near normal, despite limited inventory and disappointing job growth. Total housing inventory at the end of December was down 9.3 percent to 1.86 million homes available for sale, which represents a 4.6-month supply at the current sales pace. Also in the report, the median existing-home price for all housing types was up 9.9 percent from December 2012 at $198,000. More here.
When it comes to gauging the health of the market for newly built homes, professional builders offer an unique perspective. Because of this, the National Association of Home Builders conducts a monthly survey to determine the level of confidence home builders have in the market. The survey, conducted for the past 25 years, scores builders’ confidence so that any number above 50 indicates more builders view conditions as good than poor. In September, the Index was unchanged from the previous month at 58. September’s reading follows four consecutive months of gains. Rick Judson, NAHB’s chairman, said confidence is holding at the highest level in nearly eight years but buyers are beginning to express more hesitancy due to recent increases in mortgage rates. Despite the increases, however, interest rates are still quite low based on historical norms, Judson said. More here.