Morning Briefing: New home mortgage applications down

by Steve Randall12 Jun 2015
New home mortgage applications down
There were 9 per cent fewer mortgage applications for new homes in May compared to the previous month. The Mortgage Bankers Association estimates new single-family home sales were running at a seasonally adjusted annual rate of 459,000 units in May 2015.

 "Mortgage applications to homebuilders declined in May following an improved start to the year. Consistent with the intent to complete new homes in time for the school year, applications fell at a similar rate between April and May last year. That said, application volume is 15% percent ahead of the same month last year," said Lynn Fisher, MBA's Vice President of Research and Economics.

The data shows that 67.4 per cent of loans were conventional mortgages, 19.1 per cent were FHA loans, 1.2 per cent were RHS/USDA and 12.3 per cent were VA. The average loan size of new homes increased from $315,670 in April to $320,744 in May.
Super-jumbo mortgages increase
There’s been an uptick in so-called super-jumbo home loans; mortgages for homes from $2 million to $20 million. The Wall Street Journal reports that many mortgage lenders consider them a “sweet spot”. It says that the typical super-jumbo borrower is a customer of the bank’s private bank division and well known to the lender. Along with a relationship that means the lenders are comfortable advancing large sums it seems that some mortgage investors prefer lenders to make fewer large loans: “It’s easier to underwrite one loan for $4 million than 10 loans at $400,000 each” says Alan Rosenbaum of Guardhill Financial Corp. The report says that the super-jumbo borrowers are usually making a choice to use finance for their home rather than needing to.
No rentals in Manhattan
A new report says there are currently “no apartments” to rent in Manhattan. Citi Habitats says that there is a vacancy rate of just 1.07 per cent. Rents are at a premium as a result with average New Yorkers paying $4,081 per month, up from $3,902 a year ago according to Douglas Elliman.
Maryland housing market strong in May
Maryland home sales increased by 13 per cent in May from a year earlier according the Maryland Association of Realtors. There was a 1.3 per cent drop in average price but median price was up 0.6 per cent. Pending units rose 15 per cent over the year. “May continues the strong market trends we have seen this year,” said MAR President Janice Kirkner.  "Most counties had double digit increases in home sales and predominantly stable prices. Homebuyers are clearly engaged in the market and are likely to remain so throughout the summer.”


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