According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week for 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. It was the third consecutive week rates have increased. But despite rising rates, home buyers remained active. In fact, the MBA’s Purchase Index was up 5 percent from one week earlier. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says most of the activity came from buyers of newer, more expensive homes. “Despite higher mortgage rates, purchase applications had a strong week, mostly driven by a 6 percent increase in conventional loan applications,” Kan said. “As home-price appreciation continues at a double-digit pace, buyers of newer, pricier homes continue to dominate purchase activity, while the share of first-time buyer activity remains depressed.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
Archive for December 2021
Pending Home Sales Spike 7.5% In October
The National Association of Realtors’ Pending Home Sales Index tracks the number of contracts to buy homes that are signed each month. Because it measures contract signings, which precede closings by a number of weeks, it can be a good indicator of future existing-home sales. In October, the index saw a significant spike, rising 7.5 percent from the month before. Lawrence Yun, NAR’s chief economist, says it’s a sign that buyer demand remains high. “Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” Yun said. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.” Regionally, the Midwest and South saw the most activity, with the Midwest up 11.8 percent and the South rising 8 percent. (source)
