Loan Demand Mostly Flat, But…
Mortgage application volume barely budged last week, rising just 0.9 percent, as mortgage rates mostly held steady. But a different story emerges when looking at mortgage activity—both for refinancings and home purchases—compared to a year ago. On that scale, loan applications are up nearly 28 percent over the past 12 months.
Most of the increases from this year have been due to an uptick in refinancing applications, the Mortgage Bankers Association reports. These rose 1 percent last week, but are 43 percent higher than a year ago. Meanwhile, applications for home purchases – viewed as a gauge for the housing sector – increased 1 percent last week and are 7 percent higher compared to a year ago, MBA reports.
“Although the pace of job growth slowed in August, purchase volume continues to run strong,” says Mike Fratantoni, MBA’s chief economist. “This strength is broad based, with growth at both the high and low ends of the market.”
MBA reports the average 30-year fixed-rate mortgage averaged 3.68 percent last week, up slightly from 3.67 percent the week prior.
Overall, closed mortgage volume in the second quarter posted a strong finish. Lenders originated $518 billion in first-lien mortgage originations during the second quarter, which marks the highest volume since the second quarter of 2013, according to new data released by Black Knight Financial Services.
“While purchase originations jumped more than 50 percent from Q1, refinances saw only an eight percent increase over that period, and were actually down from the same time last year, despite the number of potential refinance candidates outpacing 2015 by over 1 million in every month since March,” says Ben Graboske, vice president at Black Knight Data & Analytics. “That said, refinance lending has risen for three consecutive quarters, and accounted for $221 billion in originations in Q2.”
Source: “Mortgage Applications Up Just 0.9% as Interest Rates Stall,” CNBC (Sept. 7, 2016)
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