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Purchase loans drive mortgage applications higher

Purchase loans drive mortgage applications higher
Written by Publishing Team

Mortgage applications jumped 1.4% for the week ending January 7, 2022, according to a survey published by The Guardian. Mortgage Bankers Association this week. The growth is underpinned by a 2% increase in the seasonally adjusted purchasing index of the business group, the MBA said.

According to the report, the unadjusted buying index was up 51% from the previous week but was 17% lower than the same week a year ago.

On the refinancing front, the commercial group’s refinancing index is down 0.1% from the previous week, down 50% from the same week a year ago.

An increase in mortgage rates is reducing refinancing activity, said Joel Kahn, associate vice president of economic and industry forecasting at the MBA.

“Mortgage rates rose significantly in all types of loans last week as Federal ReserveKan said that signs of policy tightening ahead pushed up US Treasury yields. “Price at these levels is quickly closing the door to refinancing opportunities for many borrowers.”

As evidence, the report found that the share of refinancing of mortgage activity fell to 64.1% of total applications from 65.4% in the previous week.

The trade group noted that requests for rehabilitation are at their lowest level in more than a month, while requests for conventional rehabilitation are at their lowest level since January 2020.

The share of adjustable-rate mortgage (ARM) activity decreased to 3.1% of total loan applications.

Meanwhile, the share of total orders that make up FHA And will Loans grew to 9.9% and 11.4%, respectively. the USDA The MBA said the share of total orders remained unchanged from 0.4% the previous week.

The trade group noted that it “expects strong growth in buying activity this year, as demographics and a strong economy support housing demand. However, the strength of growth will depend on housing stock growing more rapidly to meet demand.”

Here is a more detailed breakdown of this week’s mortgage application data:

Average contract interest rate for 30-year fixed rate mortgages with matching loan balances
($647,200 or less) rose to 3.52% from 3.33%.

The average contract interest rate for 30-year fixed-rate mortgages with hefty loan balances (greater than $647,200) increased to 3.42% from 3.31%.

The average interest rate on 30-year FHA-backed fixed rate mortgages increased to 3.50% from 3.40%.

The average interest rate on 15-year fixed rate mortgages increased to 2.73% from 2.60%.

The average interest rate on the 5/1 ARM contract increased to 3.03% from 2.45%.

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