Morning Briefing: Mortgage applications higher last week

by Steve Randall10 Dec 2015
Mortgage applications higher last week
Mortgage applications for the week ending Dec. 4 increased according to the latest data from the Mortgage Bankers Association. The Market Composite Index increased 1.2 per cent on a seasonally adjusted basis from one week earlier. The Refinance Index increased 4 per cent; the seasonally adjusted Purchase Index increased 0.04 per cent; the unadjusted Purchase Index increased 36 per cent compared with the previous week and was 29 per cent higher than the same week one year ago.

The refinance share of mortgage activity increased to 58.7 per cent of total applications from 56.6 percent the previous week; ARM share increased to 6.2 per cent; FHA share increased to 14.0 per cent from 13.2 per cent; VA share decreased to 10.8 per cent from 11.3 per cent; USDA share remained unchanged at 0.7 per cent.
 
Bubble trouble for San Francisco
Homes in San Francisco are in a bubble or heading into one according to real estate experts. Zillow asked their opinions for its Home Price Expectations Survey and a third believe there’s already a bubble in SF with another 20 per cent expecting one in the next year.

"A handful of markets – especially the Bay Area – are very hot right now, and it's possible home values may actually begin to fall somewhat in these places as more residents are priced out amidst rising affordability concerns, especially when interest rates rise," said Zillow Chief Economist Dr. Svenja Gudell. "Whether those local conditions constitute a 'bubble' is up for debate, even among economists.”

Some experts said they think bubble conditions are already present in Miami, Los Angeles, Houston, San Diego, and Seattle. A quarter of respondents said they think there is significant risk of a housing bubble in the next three years in Boston. (The same number of panelists said there is no risk of a bubble in Boston in the next five years).  
 
Houston home sales lower again
Home sales in the Houston market were lower for the second straight month in November. Figures from the Houston Association of Realtors show that there were 4,595 single-family home sales in the month, down 10.5 per cent from the same month in 2014. Only homes in the $150,000 to $250,000 price range increased sales but there was a 22 percent drop in luxury home sales, accounting for a decline in average price to $262,064 (down 3.5 per cent year-over-year). The median price increased from a year earlier though to $200,000; a 2.2 per cent rise and the highest ever level for November.

Sales of all property types totaled 5,623 units, down 10.1 percent compared to last November. Total dollar volume fell 13.5 percent to $1.4 billion. “The Houston housing market saw further correction in November and will likely exit the year with exactly the declines that were forecast coming off record-setting sales in 2014 and an environment of limited inventory and plunging oil prices,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties.
 

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