Daily Market Update: Mortgage applications down in weekly survey

by MPA07 May 2015
Mortgage applications down in weekly survey
The latest Mortgage Bankers Association data on mortgage applications shows that there were 4.6 per cent fewer applications for the week ending May 1. The Refinance Index decreased 8 per cent from the previous week to the lowest level since January. Mike Fratantoni, MBA's chief economist commented: "Refinance volume dropped last week as rates in the US increased sharply towards the end of the week, with signs of recovery in Europe lifting rates across the globe. Purchase activity increased slightly over the week, and the average loan amount for a purchase application reached a record high, a sign that the mix of purchase activity is still skewed toward higher priced homes.”

The refinance share of mortgage activity decreased to 53 per cent of total applications from 55 per cent the previous week. The adjustable-rate mortgage share of activity increased to 6.1 per cent of total applications.  The average loan size for purchase applications rose to a survey high of $297,400.

The FHA share of total applications increased to 14.0 per cent from 13.7 per cent the week prior. The VA share of total applications increased to 11.9 per cent from 11.3 per cent the week prior. The USDA share of total applications remained unchanged at 0.8 per cent from the week prior.
 
Mortgage delinquencies down to lowest since 2007
The level of mortgage delinquencies has fallen to the lowest level since 2007 according to new figures from the MBA. Mortgages that are at least 30 days late were down in the first quarter of this year to 5.54 per cent compared to 6.11 per cent in the same period last year. Low interest rates, higher house prices and tighter conditions from mortgage lenders and banks have helped bring the number down. Of the homes that are in foreclosure 73 per cent were originated before the financial crisis and the overall rate of foreclosures is now 2.2 per cent nationally, less than half the level at the height of the crisis.
 
Builders report gradual increase in housing market pace
Housing markets in 68 of 360 metros have returned to or exceeded their normal pre-crisis levels according to a new report from the National Association of Home Builders. It means that there has been net improvement in 7 markets. The nationwide score shows that markets are averaging 91 per cent of normal housing and economic activity. NAHB chairman Tom Woods said: “A strengthening economy and low interest rates should spur the release of pent-up demand and keep housing moving forward this year.” Baton Rouge, La., is still leading the major metros at 43 per cent better than its last normal market level. Other major metros doing well include Austin, Texas; Honolulu; Houston; Oklahoma City; San Jose, Calif.; Los Angeles; Salt Lake City; Charleston, S.C.; and Nashville, Tenn. 
 

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