Expectation isn’t what drives markets, but rather investable assets, demand and supply.
Last week, the Mortgage Bankers Association [MBA] reported that mortgage applications for last week were flat. Well, considering the historic low inventory, the creeping upward trend of the markets and the fact that the eastern seaboard sustained a powerful Nor’easter, it is amazing that applications didn’t fall!
Even before spring starts, the hype about flat mortgage apps is ridiculous!
MBA stated, ” Mortgage applications increased 0.3% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 2, 2018.”
Volume was 5% lower than the same week from 2017.”The average loan amount on purchase applications, at $320,100, was the highest since November 2017, as supply constraints likely continued to weigh down lower dollar purchase transactions,” MBA economist Joel Kan said.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased slightly, but hit its highest level since January 2014 — 4.65%, from 4.64%. Points decreased to 0.58 from 0.63 — including the origination fee — for 80% loan-to-value ratio loans.
According to the MBA, homebuyers are less concerned about mortgage rates than they are about the inventory crisis, especially as it affects the entry-level home.
Low inventory across the nation continues to push home prices higher, with property values increasing 6.6% in January as compared to 2017.
The refinance share of mortgage activity remained unchanged from the previous week at 41.8% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 7.3% of total applications, its highest level since June 2017.
The FHA share of total applications decreased to 10.1% from 10.3% the week prior. The VA share of total applications decreased to 9.9% from 10.7% the week prior. The USDA share of total applications increased to 0.9% from 0.8% the week prior.
Homes with purchase prices that are less than 75% of the local area median had price growth of 9% during 2017, according to CoreLogic analysts.