Article Summary
Mortgage applications increased by 1.1% for the week ending May 9, according to the Mortgage Bankers Association. The rise in applications comes as economic uncertainty appears to fade, with volatility decreasing. The Federal Open Market Committee’s inaction led to small market movements and stabilized rates for most types of mortgages. Purchase applications increased by 2.3%, suggesting that the traditionally busy homebuying season is chugging along.
What This Means for You
- If you’re planning to buy a home, now might be a good time to submit your application, as purchase applications are up and rates are stabilizing.
- Refinance activity is 44% higher than the same time a year ago, which could mean more competition for home loans, but also potentially lower rates for those who qualify.
- Government-sponsored purchase loan application volume is up 40% from the year ago period, indicating that government-backed loans may be a viable option for some homebuyers.
- While lock activity for April has risen from both the month and year ago periods, purchase locks are lagging on an annual basis, which could affect the overall pace of the homebuying season.
Original Post
Mortgage shoppers submitted 1.1% more applications for the week ending May 9 than they did at the end of April, according to the Mortgage Bankers Association. The trade group’s Refinance Index also fell 0.4%, as volatility driven by economic uncertainty appears to fade.
Consumers watched rates for all but 15-year fixed-rate and jumbo mortgages rise, led by the average contract interest rate for 30-year FRMs rising two basis points to 6.86%. Rates stabilized last week on small market movements in reaction to the Federal Open Market Committee’s inaction, said Mike Fratantoni, senior vice president and chief economist at the MBA.
The news for the week was the growth in purchase applications, up 2.3 percent and almost 18 percent higher than last year’s pace, said Fratantoni in a press release.
Refinance activity is also 44% higher than the same time a year ago, when the average 30-year FRM sat around 7.08%. Additionally, government-sponsored purchase loan application volume was up 40% from the year ago period.
The overall activity suggests the traditionally busier homebuying season is chugging along, although some other data points to a muted pace.
Key Terms
- Mortgage Applications
- Purchase Applications
- Refinance Activity
- Federal Open Market Committee
- Homebuying Season
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