Mortgage News - First Rate Financial

19 December 2024

Just in time for the big jump in interest rates seen after yesterday's Fed announcement, the latest Existing Home Sales data from the National Association of Realtors (NAR) shows sales at the highest seasonally adjusted pace since March. Compared to the same time last year, sales are up 6.1%--the best year over year improvement since June 2021. To be fair to the data, it is definitely looking better than most of the past year and a half. It's also true that adding 1 to 1 is a 100% increase while adding 1 to 100 is only a 1% increase. In other words, it's great that we're up 6.1% year over year--no objections there--but in broader context, we're really just muddling through home sales purgatory. Much like our assessment of things like mortgage applications, this sideways grind at long-term lows could also be seen as a "can't get any worse" moment. Therefore, it can only get better. NAR's Yun agrees, saying "Home sales momentum is building. More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%." It remains to be seen how home sales will react now that rates are back over 7%--a development is perhaps too recent to have been considered in Yun's assessment. Continue Reading

Modest Refi Surge Was Fun While it Lasted

18 December 2024

Heading into the first part of December, mortgage rates were at their lowest levels in a month and a half. Much of the improvement from the recent highs occurred in a single week (the last week of November). That made for an obvious and logical uptick in refinance applications the following week, according to the Mortgage Bankers Association's (MBA) application survey. In the latest numbers reported this morning, the refinance index didn't change much after that, which is "good" at face value because it means refi activity remained at the modestly elevated levels reported last week. But things start looking less than good when we add context from the September mini-refi-surge. As has been and continues to be the case, none of the recent activity amounts to much when compared to the true refi booms of the past. Unfortunately, that line will have an even harder time moving up in the coming weeks. This afternoon's Fed announcement was not well received by the rate market. Mortgage rates are moving up quickly even though the Fed cut its policy rate. The average lender is already back up to the recent highs seen in early November. Movement in purchase applications has been less interesting and less eventful by comparison. Simply put, there hasn't been much movement for at least a year. Other highlights from today's data: Refi apps accounted for 46.7% of the total vs 46.8 last time FHA share of total apps increased to 17.6 from 16.5 VA share declined to Continue Reading

Highest Building Permits Since February Despite Slower Housing Starts

18 December 2024

The Census Bureau releases its report on New Residential Construction each month which offers 3 key metrics: building permits, housing starts, and housing completions. Of those, the first two are most closely watched. There is typically a solid buffer between permits and starts. After all, housing construction cannot "start" unless it is "permitted." Oftentimes, there's a divergence between housing starts and building permits on any given month. This is one of them. This data series has been fairly unremarkable recently. Construction continues running above pre-pandemic levels, but new homes have been started at a slower and slower pace. That might sound problematic until one considers that 2024 has seen the highest pace of completions since 2006. Bottom line, housing definitely surged in 2021 and early 2022, and it has definitely cooled off since then, but the cooling has been very orderly compared to some past episodes. One last nuance to consider in today's data (and in general, for this data series) is the divergence between single and multifamily housing starts. Single fam has been doing much better recently--still easily holding above pre-pandemic levels. Multifamily starts, however, are near their lowest levels in a decade. Continue Reading

Builder Confidence Remains Low, But Sales Expectations Are Increasing

17 December 2024

The National Association of Home Builders (NAHB) and Wells Fargo publish the Housing Market Index (HMI) each month. The industry refers to this as "builder confidence" and December's number came out today. It was right in line with November's, and it suggests builders are increasingly honing in on a relatively gloomy baseline in the bigger picture. There are several ways to approach the languishing of the index, with the easiest being some combination of single family construction (which capture the initial drop in 2022) and multi-family construction (which, along with persistently high rates, helps explain why the index may not have recovered). Both are charted below. Ultimately, actual construction figures are a better indicator of the housing market than sentiment surveys, but the latter can offer some insight to trends and future opportunities. On that note, the component of the builder survey that tracks the outlook for 6 months into the future continues moving to the highest levels since 2022. As seen the following chart, it's less "sideways" and better described as gently trending higher. Other highlights from today's release: 31% of builders cut prices in December, vs 31% in Nov Average price reduction was also unchanged at 5% Sales incentives were used in 60% of transactions, also unchanged from Nov Continue Reading

Mortgage Applications Surge (Relatively) as Rates Drop (Relatively)

11 December 2024

The Mortgage Bankers Association is out with the latest survey of mortgage applications and refinance activity led the charge this week. In fact, purchase activity declined a bit and refis saw their best weekly gains since September. The following chart shows the week over week change in the refi index: At first glance, it would be easy to assume that this is due to some sort of distortion in the week after Thanksgiving, but if that was the case, we would have seen a similar outlier in the other direction last week. It's more likely that the sharp decline in rates is the x factor. Notably, MBA's weekly survey data only shows rates declining from 6.69 to 6.67, but MND's daily rates tell a different story with a drop from 6.88 to 6.68. That 0.20% decline would certainly be enough to account for the jump in activity, especially in a market where the outright activity is so historically low. Other highlights from this week's MBA survey: Refi share of total apps increased to 46.8% from 38.7% Share of VA applications increased to 16.3% from 13.6% 5/1 ARM rates dropped to 5.81 from 6.24 Continue Reading

Mortgage Purchase Demand Continues Surging, Sort Of...

4 December 2024

Type	Rate	APR
30 Year Fixed	6.82%	7.02%
15 Year Fixed	6.25%	6.45%
30 Year FHA	6.23%	6.43%
30 Year Jumbo	7.10%	7.3%
5/1 ARM	6.45%	6.65%
30 Year VA	6.26%	6.46%

4/04/2024@9AM CST

* Based on loan amounts of $200,000+

* Subject to credit and income requirements

* Restrictions apply

All conventional rates and APRs assume 80% financing on a $200,000 loan value with max loan of $484,00. Offers may terminate at any time without notice. Rate/APR calculated on a 365 day year with typical closing costs. Rates/APRs subject to change in closing costs and properties. All rates as of date posted on this website with 30 day lock period. Signed loan application required to lock rate. Rates may be higher for credit scores below 740 middle score. APR will change with loan amount and percentage of home being financed.