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HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

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Logan Mohtashami on Omicron and pending home sales

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Mortgage

Mortgage applications recover as winter storms pass

30-year fixed rate reached 3.23% – the largest single-week increase in almost a year

Mortgage applications recovered slightly from last week, increasing 0.5% for the week ending Feb. 26, 2021 according to the latest report from the Mortgage Bankers Association.

A giant dip in applications was reported following the devastating winter storms in Texas the week of Feb. 8, but a week of normalized weather brought numbers back up, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting.

That is despite the fact that the 30-year fixed rate experienced its largest single-week increase in almost a year, reaching 3.23%.

The refinance share of mortgage activity decreased to 67.5% of total applications from 68.5% the previous week.

“The overall share of refinances declined for the fourth consecutive week, and conventional refinance applications fell more than 2% to the lowest level in four months,” Kan said. “Government refinance applications historically lag the more rate-sensitive movements of conventional applications, and that was true last week, as both FHA and VA refinancing volumes increased.”

The refinance index increased 0.1% from the previous week and was 7% higher year-over-year. The seasonally adjusted purchase index increased 2% from one week earlier, and the unadjusted purchase index increased 5% compared with the previous week.

“The housing market is entering the busy spring buying season with strong demand,” Kan said. “Purchase applications increased, with a rise in government applications – likely first-time buyers – pulling down the average loan size for the first time in six weeks.”

The FHA share of total mortgage applications increased to 12.1% from 11.2% the week prior. The VA share of total mortgage applications decreased to 12.3% from 11.9% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.23% from 3.08%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.33% from 3.23%, breaking a five-week stretch of decreases
  • The average contract interest rate for 30-year fixed-rate mortgages increased to 3.19% from 3%
  • The average contract interest rate for 15-year fixed-rate mortgages increased to 2.64% from 2.56%
  • The average contract interest rate for 5/1 ARMs increased to 2.84% from 2.83%

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