finance Archives - Hillwood Loves Realtor

Mortgage Activity Low as Rates Remain Above Seven Percent

Jesse Wade2023-09-13T10:24:55-05:00

By Jesse Wade on September 13, 2023 • Per the Mortgage Bankers Association’s (MBA) survey through the week ending September 8th, total mortgage activity decreased 0.8% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate rose six basis points to 7.27%. The FRM rate has remained above 7% since the start of August. The Market Composite Index, a measure of mortgage loan application volume, fell by 0.8% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity increased 1.3%, while refinancing activity decreased 5.4% week-over-week. Interest rates remained above seven percent for the sixth consecutive week. The combination of higher rates and low existing for-sale inventory have hampered potential buyers as the purchase index remained historically low. The seasonally adjusted purchase index was 27.5% lower than one year ago while the seasonally adjusted refinancing index was 31.1% lower than one year ago. The refinance share of mortgage activity fell from 30.0% to 29.1% over the week, while the adjustable-rate mortgage (ARM) share of activity rose to 7.5% from 6.7%. The average loan size for purchases was $410,900 at the start of September, down from $413,600 over the month of August. The average loan size for refinancing decreased from $255,900 over the month of August to $255,400. The average loan size for an ARM was up at start of September to $833,000 while the average loan size for a FRM fell to $329,200. Related ‹ Revolving Credit Growth Reaccelerates in JulyTags: finance, interest rates, mba, mortgage applications, mortgage bankers association, mortgage lending, refinancing

Mortgage Activity Low as Rates Remain Above Seven PercentJesse Wade2023-09-13T10:24:55-05:00

Lending Standards Tighten Further as Banks Expect More to Come

David Logan2023-08-03T13:19:46-05:00

According to the Federal Reserve Board’s July 2023 Senior Loan Officer Opinion Survey (SLOOS)—conducted for bank lending activity over the second quarter of 2023—banks reported that lending standards tightened for all residential real estate (RRE) and commercial real estate (CRE) loan categories. Demand for RRE and CRE loans weakened across all categories over the quarter. Moreover, banks expect their lending standards across all loan categories to tighten further over the second half of 2023. Expectations of more tightening were fueled by increased economic uncertainty and an expected deterioration of collateral values and credit quality of existing loans according to respondents. However, the net shares of banks expecting to tighten declined relative to Q1 2023 for each loan category. A higher net percentage of banks reported tighter residential mortgage lending standards in Q2 across all categories except subprime loans. The share of banks that tightened standards for subprime loans fell to 16.7% after more than doubling to 33.3% in Q1 2023. In contrast, that share nearly tripled for GSE-eligible RRE loans. Although the 3.5 percentage point increase was small in nominal terms, it was the largest of any loan category and brought the net share to the highest on record outside the second and third quarter of 2020. As standards for all RRE loan categories tightened, banks also reported weaker demand for all RRE loan categories. The net share of banks reporting weaker demand averaged 38.9% across loan categories—a large improvement from the 50.8% and 87.4% averages in Q4 2022 and Q1 2023, respectively. However, these may be “in name only” improvements. As demand weakens as significantly as it did in Q4 2022, the marginal declines each quarter thereafter are likely to become smaller if some lower bound on demand exists given prevailing economic conditions. Like the results for RRE, banks reported both tightened standards as well as weaker demand for all categories of commercial real estate loans, on net. Major shares (greater than 50%) of banks tightened standards for construction and land development loans (71.7%) and loans secured by multifamily properties (63.3%) in the second quarter. Additionally, roughly half of respondents indicated weaker demand for these loans in Q2 relative to Q1. Related ‹ New Home Sales Increasingly Backed by FHA LoansTags: ADC, bank lending, commercial real estate loans, construction lending, consumer lending, credit conditions, credit standards, finance, GSE, housing finance, residential real estate, senior loan officer survey, sloos, subprime

Lending Standards Tighten Further as Banks Expect More to ComeDavid Logan2023-08-03T13:19:46-05:00

New Home Sales Increasingly Backed by FHA Loans

David Logan2023-08-03T08:24:32-05:00

NAHB analysis of the most recent Quarterly Sales by Price and Financing report reveals that the share of new home sales backed by FHA loans climbed from 12.1% (revised) to 14.0% in the second quarter of 2023. It is the largest share since Q1 2021 but roughly three percentage points lower than the post-Great Recession average. Conventional loans financed 73.7% of new home sales, down one percentage point over the quarter and 2.7ppt, year-over-year. The share of VA-backed sales edged up from 5.2% to 5.4%, a 0.8 ppt decline over the past year. Cash purchases made up 6.5% of new home sales in the second quarter of 2023. The share has declined each of the past two quarters and is down 4.2 ppt over that period. The share of cash purchases has decreased 2.9 percentage points over the past year and has ranged from 4.1% to 10.7% since Q2 2020. Although cash sales make up a small portion of new home sales, they constitute a larger share of existing home sales. According to estimates from the National Association of Realtors, 26% of existing home transactions were all-cash sales in June 2023, up from 25.0% in May and June 2022. Price by Type of Financing Different sources of financing also serve distinct market segments, which is revealed in part by the median new home price associated with each. In the second quarter, the national median sales price of a new home was $416,100. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans, and cash were $458,100, $346,500, $392,600, and $364,800, respectively. The purchase price of new homes declined over the past year, regardless of means of financing. The largest drop occurred in cash sales prices which fell 20.1% over the year. This is in stark contrast to year-over-year price changes in the second quarter of 2021 and 2022 (see below). Related ‹ Homeownership Rates for Households Aged Under 35 Fell to 38.5%Tags: conventional loans, conventional loans market share, existsing home sales, FHA, FHA loans, finance, home price appreciation, housing finance, lending, mortgage lending, new home cash purchases, new home prices, new home sales, sales by financing, VA

New Home Sales Increasingly Backed by FHA LoansDavid Logan2023-08-03T08:24:32-05:00

Mortgage Activity Increases Despite Rates Topping 7%

Jesse Wade2023-07-12T11:19:20-05:00

By Jesse Wade on July 12, 2023 • Per the Mortgage Bankers Association’s (MBA) survey through the week ending July 7th, total mortgage activity increased 0.9% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate rose 22 basis points to 7.07%. The FRM rate has risen 30 basis points over the past month and topped 7% for the first time since November of 2022. The Market Composite Index, a measure of mortgage loan application volume, rose by 0.9% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity increased 1.7%, while refinancing activity decreased 1.3% week-over-week. With the Fed indicating that rates will remain higher until inflation has fully cooled, mortgage rates increased to their highest level since November of last year. The higher rates have kept potential buyers on the sideline and greatly diminished the demand for refinancing. The seasonally adjusted purchase index was 26.3% lower than one year ago while the seasonally adjusted refinancing index was 39.3% lower than one year ago. The refinance share of mortgage activity fell from 27.4% to 26.8% over the week, while the adjustable-rate mortgage (ARM) share of activity rose to 6.6% from 6.2%. The average loan size for purchases was $426,100 in the through the first week of July, down from $426,900 over the month of June. The average loan size for refinancing decreased from $260,700 over the month of June to $254,900 in the first week of July. The average loan size for an ARM was up at start of July to $759,200 while the average loan size for a FRM fell to $353,500. Related ‹ CPI Eases Further as Housing Inflation SlowsTags: finance, home purchases, housing finance, interest rates, mba, mortgage applications, mortgage bankers association, mortgage lending, refinancing

Mortgage Activity Increases Despite Rates Topping 7%Jesse Wade2023-07-12T11:19:20-05:00

About My Work

Recent Works

Recent Posts