Article Summary
New American Funding reports a 60% growth last year, attributing it to the consolidation of loan originators and the return of the move-up buyer. This year, 74% of their applications are purchase applications, with a significant number from refinancing. The Florida market is experiencing a high level of sales price reductions, leading to an increase in the number of applications. Despite concerns about the future and first-time homebuyers, lenders are experiencing growth in their application activity and taking steps to accommodate the increasing demand.
What This Means for You
- Be aware of the increasing demand for mortgage applications and the factors driving it.
- Consider refinancing as an option to consolidate your high-interest debt.
- First-time homebuyers need to be mindful of the challenges they may face, such as inflation and managing financial obligations like student loan debt.
- Monitor the housing market and economic trends for opportunities and risks.
Original Post
“I think the last few years have paid off for us. First off, we grew 60% last year,” Arvielo said. “So I think the consolidation of loan originators is part of it. I think the move-up buyer is driving the market, meaning a former first-time home buyer [who] now has a significant amount of equity.”
Arvielo says that 74% of the applications submitted this week to NAF were purchase applications.
“I think people have been sitting on the sidelines waiting for these big rate drops we thought were going to happen…but that tiny 6.8% interest rate, well, it’s better than the sevens.”
Arvielo imagines this leading to a bustling refi market. “I think the refinance market is gonna continue to increase, because you’ve got people paying high credit card debt. We have more card loan debt than we’ve had in many, many years. So people are using their equity to consolidate,” she said.
Florida-based Jay Promisco, president at Sierra Pacific Mortgage, attributes the applications uptick to the state experiencing a high level of sales price reductions. “It’s becoming a buyer’s market here, and that’s kind of transpired ever since the kind of hurricane action in September,” he said.
Promisco agrees with Arvielo that after three years of interest rates at this level, the consumer has finally decided that now is not a bad time to buy. However, he said that certain regional markets are skewing the numbers.
Joseph Panebianco, CEO and president of AnnieMac Home Mortgage, says the company has seen a 17% increase year over year in application activity. In tandem, the company is growing its recruiting and sales efforts.
“We’re in a process where rates have come down from their high, which is always very helpful. I think people realize that what was potentially going to be a booming economy has sort of muddied, I’d say, by tariffs. So to make a long story short, interest rates are more accommodating now than they were just a year ago,” he said.
Panebianco continued, “The housing market has had more time for real incomes to increase…There are still some tight markets, but I think [we’re] seeing more inventory than we’ve been we’ve seen. Employment across the economy is still very robust; rumors of the demise of the
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