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Mortgage apps continue slide after last week’s free fall

Purchase, refi activity decline continues amid falling rates, prices

spiral stairs

Mortgage applications continued their decline after last week’s 9.2% free fall, dropping another 1% for the week ending June 20, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

This comes despite mortgage rates continuing their decline, and a serious slowdown in home price appreciation.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1% on a seasonally adjusted basis from one week earlier to the lowest level since April 2014.  On an unadjusted basis, the Index decreased 2% compared with the previous week. 

The Refinance Index decreased 1% from the previous week to the lowest level since May 2014.

“Another dip in mortgage applications is particularly disappointing after the welcome news of increased home sales earlier this week,” said Quicken Loans vice president Bill Banfield. “While we have seen many of the indicators regain the footing they lost in the recession, housing cannot reach its stride until the employment picture attains stability.” 

The seasonally adjusted Purchase Index decreased 1% from one week earlier to the lowest level since May 2014.  The unadjusted Purchase Index decreased 2% compared with the previous week and was 18% lower than the same week one year ago.

The refinance share of mortgage activity remained unchanged at 52% of total applications from the previous week.  The adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.33% from 4.36%, with points decreasing to 0.18 from  0.24 (including the origination fee) for 80% loan-to-value ratio loans.  The effective rate decreased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.28% from 4.32%, with points increasing to 0.12 from 0.09 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.03% from 4.07%, with points increasing to -0.38 from -0.39 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.47% from 3.50%, with points increasing to 0.19 from 0.16 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.23% from 3.20%, with points remaining unchanged from 0.27 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 
 

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