Mortgage Applications Surge

Home buyer demand hit its highest level in 11 years, as January continues to shape up to be a hot month for the housing market. Weekly mortgage applications jumped 30% for the week ending Jan. 10, a sign that home buyers are emerging, the Mortgage Bankers Association’s seasonally adjusted index shows. The average 30-year fixed-rate mortgage decreased to its lowest level since September, averaging 3.87%, the MBA reports.

Applications for home purchases, a gauge of home buying activity, jumped 16% last week, reaching the highest level since 2009.

Source: “Weekly Mortgage Applications Soar 30% as Homebuyer Demand Hits the Highest Level in 11 Years,” CNBC (Jan. 15, 2020) and “Falling Mortgage Rates Set Off a Stampede of Borrowing,” MoneyWise (Jan. 15, 2020)

Home Loan Interest Rates Drop

What a difference a year makes. Home shoppers are being greeted with much lower mortgage rates to kick off 2020 than they were a year ago. The 30-year fixed-rate mortgage averaged 3.72% this week, compared to 4.51% at the beginning of 2019.

“The stability is welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market and other interest rate-sensitive sectors,” says Sam Khater, Freddie Mac’s chief economist. “The low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices.”

Freddie Mac reports the following national averages for the week ending Jan. 2:

  • 30-year fixed-rate mortgages: averaged 3.72%, with an average 0.7 point, falling slightly from a 3.74% average a week ago. Last year at this time, 30-year rates averaged 4.51%.
  • 15-year fixed-rate mortgages: averaged 3.16%, with an average 0.7 point, dropping from last week’s 3.19% average. A year ago, they averaged 3.99%.
Source: Freddie Mac

January Expected to Be ‘Hot for Home Shoppers’

The busy home-shopping season will start early in January this year, according to forecasters. The month of January in recent years has tended to have the second-most listing views across the year (just 1% below February), according to realtor.com® data.

With sub-4% mortgage rates, low unemployment, and higher wages, industry insiders are expecting a bustling winter real estate season.

Source: “New Analysis: January Home Shopping Is Getting More Popular,” The Mortgage Reports (Dec. 31, 2019)

Pending Home Sales Jump

Pending home sales rose 1.2% in November after slipping the prior month, according to the National Association of REALTORS®’ latest housing report, which was just released. Year-over-year contract signings were up 7.4% nationally, according to the report. The West region of the country reported the highest monthly growth in pending home sales at 5.5%

“Despite the insufficient level of inventory, pending home contracts still increased in November,” said NAR Chief Economist Lawrence Yun, noting that housing inventory has been in decline for six straight months. “Favorable conditions are expected throughout 2020 as well, but supply is not yet meeting the healthy demand.”

Source: magazine.realtor/daily-news/2019/12/30

 

Average Credit Scores Surge

Americans are boosting their credit scores, which bodes well for applicants seeking a mortgage to snag the lowest rates. The average credit score hit its highest level since 2011, reaching 682–two points higher than a year ago, Experian reports in its State of Credit report. Consumers also are taking on more mortgage debt than a year ago, and delinquency rates are decreasing too.

Comparing borrowing behaviors between genders, women’s average credit scores are four points higher than men’s (686 vs. 682, respectively). Men tend to carry more mortgage debt than women–$220,421 compared to $203,603.

By generation, Gen Xers, millennials, and Gen Zers tend to carry more debt than older generations. They also tend to have higher delinquency rates, the Experian study shows. A breakdown showing their average credit scores and mortgage debts is detailed at: Experian

Mortgage Rates Remain Stagnant

This week, the average U.S. fixed rate for a 30-year mortgage held steady at 3.73%. Although this rate remains the same as last week’s percentage, it’s still more than a percentage point below the 4.55% of the year-earlier week, according to the Freddie Mac Primary Mortgage Market Survey.

The 15-year FRM averaged 3.19% this week, remaining unchanged from last week’s rate. This time last year, the 15-year FRM came in at 4.01%.

Although rates continue to hover near historic lows, Sam Khater, Freddie Mac’s Chief Economist, warns a lack of housing supply is likely to dampen home sales in 2020.

Source: Freddie Mac

Mortgage Rates Tick Up

“With Federal Reserve policy on cruise control and the economy continuing to grow at a steady pace, mortgage rates have stabilized as the market searches for direction,” said Sam Khater, Freddie Mac’s Chief Economist. “The risk of an economic downturn has receded and, combined with the very strong job market, it should lead to a slightly higher rate environment.”

  • 30-year fixed-rate mortgage averaged 3.73 percent with an average 0.7 point for the week ending December 12, 2019, up from last week when it averaged 3.68 percent. A year ago at this time, the 30-year FRM averaged 4.63 percent.
  • 15-year fixed-rate mortgage averaged 3.19 percent with an average 0.7 point, up from last week when it averaged 3.14 percent. A year ago they averaged 4.07 %.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36 percent with an average 0.4 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 5-year ARM averaged 4.04 percent.

Source: Freddie Mac

Mortgage Rates Stay Steady

“This week the economy sent mixed signals, leaving mortgage rates unchanged,” says Sam Khater, Freddie Mac’s chief economist. “Survey data for manufacturing and service industries varied while construction spending fell modestly. However, homebuyer demand continued to improve, rising eight percent. Clearly, home buyers remain bullish on the real estate market.”

Freddie Mac reports the following national averages for the week ending Dec. 5:

  • 30-year fixed-rate mortgages: averaged 3.68%, with an average 0.5 point, holding the same as last week. Last week at this time, 30-year rates averaged 4.75%.
  • 15-year fixed-rate mortgages: averaged 3.14%, with an average 0.4 point, falling slightly from last week’s 3.15% average. A year ago, they averaged 4.21%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.39%, with an average 0.4 point, falling from last week’s 3.43% average. A year ago, they averaged 4.07%.
Source: Freddie Mac

Mortgage Prepayments Climb

Mortgage prepayments, a common gauge for housing and refinancing demand, jumped to its highest level since May 2013—a good sign for the market, according to a new analysis from data and analystics firm Black Knight. Mortgage prepayments were at 1.81% in October, more than double the figure a year ago. That represents a 134% year-over-year increase, Black Knight reports.

What’s causing the improvement? Low mortgage rates are prompting more people to refinance their mortgage or buy a home. Consumers typically pay off previous loans when they buy a new home.The uptick is apparent: Existing-home sales increased 1.9% in October to a seasonally adjusted annual rate of 5.46 million—4.6% higher than a year ago, the National Association of REALTORS® reported last week.

Source: “Mortgage Prepays Surge to 6-Year High, Black Knight Says,” HousingWire (Nov. 25, 2019)

Drop in Mortgage Rates = Higher Home Buying Demand

Mortgage rates declined this week, After several weeks of increases, the drop in mortgage rates is a welcome sign for home buyers.

The housing market continues to steadily gain momentum with rising homebuyer demand and increased construction due to the strong job market, ebullient market sentiment, and low mortgage rates,” says Sam Khater, Freddie Mac’s chief economist. “Residential real estate accounts for one-sixth of the economy, and the improving real estate market will support economic growth heading into next year.”

Freddie Mac reports the following national averages for the week ending Nov. 21:

  • 30-year fixed-rate mortgages: averaged 3.66%, with an average 0.6 point, falling from last week’s 3.75% average. Last year at this time, they averaged 4.81%.
  • 15-year fixed-rate mortgages: averaged 3.15%, with an average 0.5 point, falling from last week’s 3.20% average. A year ago, 15-year rates averaged 4.24%.
Source: Freddie Mac