Purchase Mortgage Activity Strong Despite Surging Rates

Purchase Mortgage Activity Strong Despite Surging Rates
Written by Publishing Team

Interest rates on fixed rate mortgage products rose by at least a dozen basis points during the week ending January 14, yet the volume of mortgage purchases rose significantly, and while refinancing has declined, it still accounts for the bulk of application activity.

The Mortgage Bankers Association (MBA) reports that its composite market index, a measure of the volume of mortgage loan applications, iIt grew 2.3 percent On a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was up 3 percent.

the refinancing The index is down 3 percent compared to the week ending January 7 and is down 49 percent from the same week a year ago. The share of mortgage refinancing fell to 60.3 per cent of total applications from 64.1 per cent in the previous week.

seasonally adjusted Purchase The index jumped 8 percent from the previous week and rose 14 percent before the adjustment. Orders are down 13% year over year.

“Mortgage rates have reached Highest levels since March 2020, resulting in the slowest pace of refinancing activity in more than two years. The 30-year fixed rate is 3.64 percent and has increased more than 30 basis points in the past two weeks. “Despite the price increase, purchase orders jumped nearly 8 percent, with traditional purchasing apps making up a large part of the stronger activity,” said Joel Kahn, associate vice president of economic and industrial forecasting at the MBA. Purchasing a record $418,500 The continued rise in purchase loan application volumes is driven by rising home prices and a shortfall in housing stock in the market – especially for start-up homes Slower growth in government purchasing activity also contributes to larger loan balances and indicates that potential first-time buyers are They struggle to find homes to buy in their price range.”

the FHA Of the total orders it fell to 9.3 percent from 9.9 percent and Virginia’s share fell to 10.0 percent from 11.4 percent the previous week while the USDA’s share remained unchanged at 0.4 percent. The original balance of the loans rose significantly, from an average of $338,000 a week ago to $346,800. Mortgage purchase balance increased to a new record high of $418,500 from $401,700.

the Contracted average interest rate For 30-year fixed-rate mortgages (FRM) with originating balances at or below the matching threshold of $647,200, it increased to 3.64 percent from 3.52 percent. Points are unchanged at 0.45 and the actual rate has risen to 377%.

Average contract interest rate for jumbo 30-year FRM with balances greater than $647,200 increased to 3.54 percent from 3.42 percent. The score increased to 0.47 from 0.36. The actual rate was 3.67 percent.

thirty years FHASponsored FRM saw an average rate of 3.64 percent, 14 basis points higher than the previous week. The score decreased to 0.44 from 0.45 and the actual rate grew to 3.77%.

Average contract interest rate for 15The annual mortgage rate reached 2.95%, recording 0.45 points, up from 2.73% to 0.35 points. The actual rate was 3.05 percent.

average rate 5/1 adjustableThe mortgage rate (ARM) rose just one basis point during the week, to 3.04 percent. The score rose from 0.20 to 0.24 and the actual rate increased to 3.13%. ARM’s share of the activity jumped from 3.1 percent to 3.8 percent of total applications.

The weekly MBA Mortgage Applications Survey has been conducted since 1990 and covers more than 75 percent of all US retail residential applications, and among the respondents are mortgage, commercial, and thrift bankers. Base period and value for all indices is March 16, 1990 = 100 Interest rate information is based on 80 percent loan-to-value loans and points including construction fees.

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