Purchase loans drive mortgage apps higher
The weekly index of mortgage application activity increased in the week ending Nov. 18, with purchase applications taking the lead.
The Mortgage Bankers’ Association’s index shows a 5.5 per cent rise (adjusted) and 3 per cent rise (unadjusted) for the week with purchase applications rising 19 per cent (adjusted) and 13 per cent (unadjusted).
“The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310 thousand, the highest in the survey, which dates back to 1990," explained Michael Fratantoni, Chief Economist and Senior Vice President of Research & Technology at the Mortgage Bankers Association.
The refinance index was down 3 per cent to its lowest level since January 2016 and the refinance share of activity slipped to 58.2 per cent of total applications, from 61.9 per cent a week earlier.
Mortgage rates above 4 per cent for first time this year
There was a further rise in mortgage rates this week with 30-year FRM’s averaging 4.03 per cent with an average 0.5 point, up from 3.94 per cent a week ago.
Freddie Mac’s Primary Mortgage Market Survey shows a 15-year FRM averaging 3.25 per cent with an average 0.5 point, up from 3.14 per cent a week earlier.
A 5-year ARM averaged 3.12 per cent with an average 0.4 point, up from last week’s 3.07 per cent.
“In a short week leading up to the Thanksgiving holiday, the 10-year Treasury yield rose 8 basis points. The 30-year mortgage rate followed suit, rising 9 basis points to 4.03 percent. This increase marks the first week since 2015 that mortgage rates have risen above 4 percent," commented Sean Becketti, Freddie Mac’s chief economist.
Pent-up demand helps Virginia to balanced market
Sales in the Virginia market fell more than 10 per cent in October compared to the month before but the Virginia Association of Realtors reports a well-adjusted year-end performance.
“While the market is settling into the winter season, pent up demand remains a strong contributor,” stated 2017 VAR President Claire Forcier-Rowe. “Still recovering from the peak inventory constraints, buyers are moving quickly on available properties and taking advantage of low interest rates. It’s a great time to the enter the market, as financing remains so accessible, and it’s a great time to consider listing, as sellers can anticipate that prices will be buoyed by buyer eagerness.”
The median sales price for Virginia was up 5 per cent year-over-year to $262,500 in October, defying the usual trend for lower prices following summer highs.