Tag Archives: Mortgage rates

MBA Significantly Increases Forecast for Home Purchase Lending

28 Jul

Purchase Originations Now Projected to Top $800 Billion in Both 2015 and 2016

WASHINGTON, D.C. (July 22, 2015) – The Mortgage Bankers Association (MBA) today released its updated mortgage finance and economic forecasts. The revision included a significant increase in the volume of purchase originations. MBA now projects that purchase originations will reach $801 billion in 2015 and $885 billion in 2016. That is an increase of $71 billion and $94 billion, respectively, over the association’s previous forecast.

Mike Fratantoni, MBA’s Chief Economist, along with senior MBA economists Lynn Fisher and Joel Kan, explained the drivers behind the increased forecast in MBA’s July Economic and Mortgage Finance Commentary, released today:

The housing market recovery has shifted to a higher gear. We have revised upwards our estimates and forecasts for home sales and home prices, and the cash share of purchases has declined.  All of these factors point to higher levels of purchase originations. Revisions to our purchase origination forecast in July result from changes in our expectations   about the rate at which purchase applications and housing sales translate into dollars of mortgage originations.

Overall, we believe that pull-through rates have increased, reflecting incremental but important changes in borrower behavior and lender underwriting practices, as well as changing average loan sizes and falling cash shares.  As a result of the changes outlined, purchase originations are now expected to increase to $801 billion in 2015, an upward revision from $730 billion in last month’s forecast, and from $638 billion in 2014. For 2016, we increased our forecast to $885 billion in purchase originations.

More sales are being financed, and more applications are being approved.  And we expect that this trend will continue into 2016 and beyond, as the broader economy and job market continue to improve.  The stronger job market and somewhat higher levels of inflation will lead the Fed to hike in September, and we expect that mortgage rates will hit 4.5 percent by the end of the year.  However, the positive of the stronger job market will outweigh any negative of somewhat higher mortgage rates.

The increase in rates will continue to nudge refinance volume down as expected.  Our forecast for refinance mortgage originations remains the same as last month. Refinances are expected to be $551 billion in 2015, compared to $484 billion in 2014. As a result, total originations are expected to be $1.35 trillion in 2015 and $1.26 trillion in 2016, compared to $1.12 trillion in 2014.

Click here to view a full copy of MBA’s July Economic and Mortgage Finance Commentary. Click here to view a full copy of MBA’s Mortgage Finance Forecast and click here to view a full copy of MBA’s Economist Forecast.

Freddie Mac Weekly Survey: Rates Edge Higher

19 Feb

Mortgage rates edged higher for a second week, with Freddie Mac’s weekly survey showing that lenders were offering conventional 30-year loans at an average 3.76%, up from 3.69% last week.

This year’s low point came the first week of February, when Freddie’s widely watched survey showed the average rate for 30-year fixed loans had sunk to 3.59%.

The latest survey, released Thursday, pegged the average for a 15-year fixed home loan at 3.05%, up from 2.99%. The start rate for adjustable loans that are fixed for the first five years was unchanged at 2.97%.

The low rates have stoked the latest round of a series of refinance booms in recent years as homeowners seek to lock in cheap long-term funds.

No-cost loans, which don’t require borrowers to pay lender fees, discount points or charges for appraisals and title insurance, recently dropped to rates as low as 3.625% for a 30-year fixed mortgage, said Laguna Niguel loan broker Jeff Lazerson.

The rate has since risen to 4% for the no-cost mortgages but borrowers who pay all third-party charges plus a point — 1% of the loan amount — can still get a 30-year fixed loan at 3.625%, Lazerson said.

Freddie Mac asks lenders early each week about the terms they are offering to solid borrowers seeking mortgages up to $417,000 that conform to guidelines set by Freddie and Fannie Mae, the other mortgage finance giant.

The borrowers would have paid a little more than half of 1% of the loan balance in upfront lender fees and discount points to obtain the fixed-rate loans. Payments for such services as appraisals and title insurance are not included.

The survey provides a consistent gauge of mortgage trends, but actual rates may change rapidly and are influenced by many factors, including the credit scores, debt loads and downpayments of borrowers.

See the survey at this link:


Freddie Mac: Mortgage Rates Fall to 4.27 Percent

18 Apr

From DSNews  April 17, 2014

Average fixed mortgage rates declined for the second straight week, bringing them to a six-week low—and easing affordability conditions slightly as the homebuying season gets under way.

Per Freddie Mac’s [1] Primary Mortgage Market Survey [2], the 30-year fixed rate mortgage (FRM) this week averaged a rate of 4.27 percent (0.7 point), down from 4.34 percent last week. A year ago, the 30-year FRM sat at 3.41 percent.

At the same time, the 15-year FRM averaged 3.33 percent (0.6 point), down from an average 3.38 percent.

Frank Nothaft, VP and chief economist for Freddie Mac, said the latest decline fits with a disappointing—though not dismal—construction report [3] showing homebuilding rising at a rate of 2.8 percent in March.

“Also, permits fell 2.4 percent in March to a seasonally adjusted annual rate of 990,000, which followed a slight downward revision of 4,000 permits in February,” Nothaft said.

Numbers were mixed in adjustable rates. According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent (0.5 point), down from 3.09 percent in the prior week, while the 1-year ARM averaged 2.44 percent, up a few basis points.

Bankrate.com [4] also saw a drop in its weekly national survey [5], recording the 30-year fixed at 4.43 percent and the 15-year fixed at 3.48 percent.

“Mortgage rates dropped for the second week in a row amid mixed economic news abroad and in the United States,” said Polyana da Costa, senior mortgage analyst for the finance site. “Despite some recent economic news, the United States is still perceived by investors as one of the safest places to park their money.”

Article printed from DSNews.com: http://dsnews.com

URL to article: http://dsnews.com/freddie-mac-mortgage-rates-fall-4-27-percent/

Spring Selling Season Predicted To Start Early

18 Feb

from The Motley Fool  at fool.com February 15, 2014

If you’re considering selling your home in 2014, now is the time to get ready. Not next month, not next week, not tomorrow. Right now.

Why? Because buyers are already on the hunt.
The Internet is the new curb appeal

Last month will likely be remembered for polar vortexes, widespread snow, and historic traffic jams. Lost in the shuffle is that while American’s were sitting inside trying to stay warm, they were looking at houses for sale on the Internet.
Experian Marketing Services released its monthly most visited real estate website rankings earlier this week for web traffic in January. The results are eye popping.
Web traffic to real estate websites was up 25% from December to 364 million visits. Zillow (NASDAQ: Z ) led the way with over 57 million visits and Trulia (NYSE: TRLA ) limped into second at over 30 million visits.
If you’re considering selling and your home is not yet online, then every day you’re missing out on thousands (or even millions) of potential buyers viewing your home.
Even more incentive for buyers Spring is coming, and that is certainly driving a lot of the interest in homes currently listed for sale. But there are other factors at play.
Mortgage rates have declined over the past month and are currently trending back toward 4% for traditionally structured, well qualified loans. This is a significant development for buyers, as interest rates are a huge driver of home affordability.
For example, a traditional 30 year, $150,000 mortgage at 4.5% would have a monthly payment of $760. If rates declined to 4.25%, the payment would change to $738.
For borrowers on the edge of qualifying for a mortgage, that $22 per month savings could make the difference between getting a loan approval or not. Over the life of the loan, that 0.25% difference saves the borrower $7,963!
For buyers, the time is now! Buy low and sell high, right? For buyers, the time to buy low is quickly ending, creating a sense of urgency to buy now before prices rise too high or interest rates return to more historically normal levels.
According to CoreLogic and reported by Realtor.org, home prices in 2013 saw the largest percentage increase across the board since 2005, north of 11% as of December. The appreciation was most pronounced in the states that were hit hardest in the real estate collapse: Nevada rose 23.9%, California 19.7%, and Michigan 14% rounding out the top three.
Buyers are ready. Are you?


Mortgage Rates Continue Downward Trend

11 Feb
weekly mortgage rates freddie mac
Daniel Acker/Bloomberg via Getty Images

WASHINGTON — Average U.S. rates for fixed mortgages fell this week as the latest data continued to indicate a pause in the housing market’s recovery.

Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan declined to 4.23 percent from 4.32 percent last week. The average for the 15-year loan slipped to 3.33 percent from 3.40 percent.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. Saying the economy was gaining strength, the Fed pushed ahead last week with a plan to reduce the bond purchases, which have kept long-term interest rates low.

Data released Tuesday by real estate specialist CoreLogic (CLGX) showed that U.S. home prices slipped from November to December, and the year-over-year increase slowed, likely a result of weaker sales at the end of last year.

The December decline was the third straight month-to-month drop.

Home prices had risen for eight straight months through September. For all of 2013, prices rose a healthy 11 percent.

The Commerce Department reported Monday that U.S. construction spending rose modestly in December, slowing from healthy gains a month earlier.

Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast that both will likely rise around 5 percent, down from double-digit gains in 2013.

Steady job gains are putting more people to work and enabling them to buy a home. And rising prices should encourage more owners to sell their homes. A larger supply of available homes would likely boost sales.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

  • The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan rose to 0.7 point from 0.6 point.
  • The average rate on a one-year adjustable-rate mortgage fell to 2.51 percent from 2.55 percent. The fee increased to 0.5 point from 0.4 point.
  • The average rate on a five-year adjustable mortgage slipped to 3.08 percent from 3.12 percent. The fee held at 0.5 point.

Here’s a look at rates for fixed and adjustable mortgages this week and over the past year. (All values in percentage points):

Loan type Current avg. Last week 52-week high 52-week low
30-year fixed 4.23 4.32 4.58 3.35
15-year fixed 3.33 3.40 3.60 2.56
5-year adjustable 3.08 3.12 3.28 2.56
1-year adjustable 2.51 2.55 2.71 2.51
Source: Freddie Mac Primary Mortgage Market Survey