According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. Rates were down for 30-year fixed-rate mortgages with conforming loan balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline followed two straight weeks of increases and led to a rebound in demand for mortgage applications. In fact, refinance activity surged, climbing 26 percent from one week earlier. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said the coronavirus is behind the volatility over the past few weeks. “Mortgage rates and applications continue to experience significant volatility from the economic and financial market uncertainty caused by the coronavirus crisis,” Kan said. “After two weeks of sizeable increases, mortgage rates dropped back to the lowest level in MBA’s survey, which in turn led to a 25 percent jump in refinance applications.” However, though refinance demand skyrocketed, purchase applications were down from the previous week. The MBA’s survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
Archive for April 2020
S&P Index Finds Home Prices Rising
The S&P Case-Shiller Indices are considered to be among the leading measures of U.S. home prices. According to their most recent release, which covers data through January, home price increases were accelerating at the start of the year. In fact, their 20-city composite index was up 3.1 percent year-over-year, up from 2.8 percent the month before. Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, says the increases were broad based. “Results for the month were broad based with gains in every city in our 20-city composite; 14 of the 20 cities saw accelerating prices,” Lazzara said. “As has been the case since mid-2019, after a long period of decelerating price increases, the national, 10-city, and 20-city composites all rose at a faster rate in January than they had done in December.” In other words, high buyer demand combined with a lower number of homes for sale had begun to push prices upward after an extended downward trend. However, Lazzara cautions that their data predates the effects of the coronavirus and the impact that it may have on home prices. (source)
