On Thursday, May 16, 2024, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.02 percent, down from last week when it averaged 7.09 percent. A year ago at this time, the 30-year FRM averaged 6.39 percent.
The 15-year fixed-rate mortgage averaged 6.28 percent, down from last week when it averaged 6.38 percent. A year ago at this time, the 15-year FRM averaged 5.75 percent.
“Mortgage rates decreased for the second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.”
According to the Mortgage Bankers Association (MBA), mortgage applications increased 0.5 percent from one week earlier. The Refinance Index increased 5 percent from the previous week and was 7 percent higher than the same week one year ago. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 14 percent lower than the same week one year ago.
“Treasury yields continued to move lower last week, and mortgage rates declined for the second week in a row, with the 30-year fixed rate down 10 basis points to 7.08 percent, the lowest level since early April,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The decline in rates led to a small boost to refinance applications, including another strong week for VA refinances. However, the overall level of refinance activity remains low. Purchase applications decreased, driven largely by a 9 percent drop in FHA purchase applications. Conventional home purchase applications were down around one percent.”
Added Kan, “While the downward move in rates benefits prospective homebuyers, mortgage rates are still much higher than they were a year ago, while for-sale inventory remains tight.”
More housing and market news
According to MBA’s Builder Application Survey (BAS), mortgage applications for new home purchases increased 22.1 percent compared with a year ago. Compared with last month, applications increased by 2 percent.
“New home purchase activity increased at a healthy pace in April 2024 after a slight pause in March. Applications to purchase newly constructed homes increased 22 percent over the year and have now shown annual gains for 15 consecutive months,” said MBA’s Kan. “There continues to be healthy demand for new homes, given greater availability and other benefits over existing home purchases such as builder concessions and customization options. First-time homebuyers account for a growing share of purchase applications with the FHA share of applications at 26.3 percent in April, higher than the survey average of 18 percent dating back to 2013. Our estimate of new home sales increased more than 13 percent to 699,000 units, the strongest pace in three months.”
The delinquency rate for mortgage loans increased slightly to a seasonally adjusted rate of 3.94 percent in the first quarter of 2024. “Overall mortgage delinquencies increased slightly in the first quarter of 2024, but not across all three of the major loan types. Delinquencies declined for FHA loans, were relatively flat for Conventional loans, and increased for VA loans,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Notably, all three loan types saw an increase in delinquencies compared to one year ago. Higher unemployment, lower personal savings, increases in property taxes and insurance, and a run-up in credit card debt and delinquency contributed to conditions that would make it tougher for some homeowners to make their mortgage payments.”
Added Walsh, “At the end of 2023, the Department of Veterans Affairs encouraged mortgage servicers to implement a foreclosure moratorium until the end of May 2024. With this pause came an increase in VA loans that remained delinquent, but not in foreclosure inventory.”
Additional mortgage activity
- The refinance share of mortgage activity increased to 32 percent of total applications from 30.6 percent the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 7 percent of total applications.
- The FHA share of total applications decreased to 12.4 percent from 12.9 percent the week prior.
- The VA share of total applications increased to 12.7 percent from 11.7 percent the week prior.
- The USDA share of total applications remained unchanged from 0.4 percent the week prior.
This week in mortgage rates
Rates decrease. Here’s how average fixed rates broke down:
- 30-year fixed-rate loans: 7.02% (down from 7.09%)
- 15-year fixed-rate loans: 6.28% (down from 6.38%)
Check back next week for the most up-to-date mortgage and housing news.
May 9 – Mortgage Rates Decrease for the First Time Since March, Applications Rise
On Thursday, May 9, 2024, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.09 percent, down from last week when it averaged 7.22 percent. A year ago at this time, the 30-year FRM averaged 6.35 percent.
The 15-year fixed-rate mortgage averaged 6.38 percent, down from last week when it averaged 6.47 percent. A year ago at this time, the 15-year FRM averaged 5.75 percent.
“After a five week climb, mortgage rates ticked down following a weaker than expected jobs report,” said Sam Khater, Freddie Mac’s Chief Economist. “An environment where rates continue to hover above 7 percent impacts both sellers and buyers. Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated. These elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment.”
According to the Mortgage Bankers Association (MBA), mortgage applications increased 2.6 percent from one week earlier. The Refinance Index increased 5 percent from the previous week and was 6 percent lower than the same week one year ago. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 17 percent lower than the same week one year ago.
“Treasury rates and mortgage rates fell last week on the news of a slowing job market, with wage growth at the slowest pace since 2021, and the Federal Reserve’s announced plans to ease quantitative tightening in June and to maintain its view that another rate hike is unlikely. The Conventional 30-year rate dropped 11 basis points, and the FHA rate fell 17 basis points to 6.92 percent, back below 7% for the first time in three weeks,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Mortgage applications increased for the first time in three weeks, with refinances up 5 percent. Even with the increase, which included a 29 percent jump in VA refinances, refinance volume remains about 6 percent below last year’s already low levels.”
Added Fratantoni, “Driven by a 5 percent gain in FHA applications, purchase activity was up 2 percent. First-time homebuyers account for roughly half of purchase loans, and the government lending programs are an important source of financing for these homebuyers. The gain in FHA activity is a sign that this segment of the market is active.”
More housing and market news
Mortgage credit availability increased by 0.1 percent to 94 in April. “Mortgage credit availability was little changed in April, with credit categories such as Conventional, conforming, and Jumbo seeing very small monthly gains,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The supply of credit has stabilized, expanding slightly over the past four months but remaining close to 2012 lows. Lenders continue to reduce capacity with mortgage rates still above 7 percent and origination volume moving at a slow pace. Even with challenging affordability conditions and fairly strong housing demand, credit remains tight and housing supply low.”
Commercial and multifamily mortgage loan originations remained essentially unchanged in the first quarter of 2024 compared with a year ago. They decreased 23 percent from the fourth quarter of 2023.
Additional mortgage activity
- The refinance share of mortgage activity increased to 30.6 percent of total applications from 30.2 percent the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 7.7 percent of total applications.
- The FHA share of total applications increased to 12.9 percent from 12.7 percent the week prior.
- The VA share of total applications increased to 11.7 percent from 11.3 percent the week prior.
- The USDA share of total applications remained unchanged from 0.4 percent the week prior.
This week in mortgage rates
Rates fall. Here’s how average fixed rates broke down:
- 30-year fixed-rate loans: 7.09% (down from 7.22%)
- 15-year fixed-rate loans: 6.38% (down from 6.47%)
Check back next week for the most up-to-date mortgage and housing news.
May 2 – Mortgage Rates Increase at Key Time, Applications Fall
On Thursday, May 2, 2024, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.22 percent, up from last week when it averaged 7.17 percent. A year ago at this time, the 30-year FRM averaged 6.39 percent.
The 15-year fixed-rate mortgage averaged 6.47 percent, up from last week when it averaged 6.44 percent. A year ago at this time, the 15-year FRM averaged 5.76 percent.
“The 30-year fixed-rate mortgage increased for the fifth consecutive week as we enter the heart of Spring Homebuying Season,” said Sam Khater, Freddie Mac’s Chief Economist. “On average, more than one-third of home sales for the entire year occur between March and June. With two months left of this historically busy period, potential homebuyers will likely not see relief from rising rates anytime soon. However, many seem to have acclimated to these higher rates, as demonstrated by the recently released pending home sales data coming in at the highest level in a year.”
According to the Mortgage Bankers Association (MBA), mortgage applications decreased 2.3 percent from one week earlier. The Refinance Index decreased 3 percent from the previous week and was 1 percent lower than the same week one year ago. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent lower than the same week one year ago.
“Inflation remains stubbornly high, and this trend is convincing markets that rates, including mortgage rates, are going to stay higher for longer. No doubt, this is a headwind for the housing and mortgage markets, with the 30-year fixed mortgage rate increasing to 7.29 percent last week, the highest level since November 2023,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Application volume for both purchase and refinances declined over the week and remain well below last year’s pace. One notable trend is that the ARM share has reached its highest level for the year at 7.8 percent. Prospective homebuyers are looking for ways to improve affordability, and switching to an ARM is one means of doing that, with ARM rates in the mid-6 percent range for loans with an initial fixed period of five years.”
More housing and market news
On May 1, the Federal Reserve left interest rates unchanged after a Commerce Department report last week showed consumer prices rose 2.7% year-over-year in March, above the central bank’s 2% target.
Chairman Jerome Powell said the board is unlikely to hike interest rates at the next policy meeting, and they are “prepared to maintain the current target range for the federal funds rate for as long as appropriate.”
In response to the Federal Reserve’s FOMC statement, Fratantoni said, “With our April forecast, we lowered our figures for originations and marked up our expectations for mortgage rates, and today’s FOMC decision confirms those revised expectations. We expect mortgage rates to drop later this year, but not as far or as fast as we previously had predicted.”
Mortgage applications remained flat in March. “Homebuyer affordability conditions remain volatile as recent economic data continues to show that the economy and job market are strong. These factors will keep mortgage rates at elevated levels for the near future, sidelining some prospective buyers from entering the housing market,” said Edward Seiler, MBA’s Associate Vice President, Housing Economics, and Executive Director, Research Institute for Housing America. “While rates remain elevated and housing supply is low, we do expect to see renewed activity as mortgage rates decline to low-to-mid 6 percent range by the end of the year.”
Additional mortgage activity
- The refinance share of mortgage activity decreased to 30.2 percent of total applications from 30.8 percent the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 7.8 percent of total applications.
- The FHA share of total applications decreased to 12.7 percent from 12.8 percent the week prior.
- The VA share of total applications decreased to 11.3 percent from 11.7 percent the week prior.
- The USDA share of total applications remained unchanged from 0.4 percent the week prior.
This week in mortgage rates
Rates rise again. Here’s how average fixed rates broke down:
- 30-year fixed-rate loans: 7.22% (up from 7.17%)
- 15-year fixed-rate loans: 6.47% (up from 6.44%)
Check back next week for the most up-to-date mortgage and housing news.
This information is distributed for professional use and is not intended to be shared with, or viewed by, consumers. To the average consumer, the information here may be misleading or exclude important disclosures.
Information contained in this article may include links or references to third-party resources or content. Embrace Home Loans does not endorse or guarantee the accuracy of this third-party information. If you follow these links, you will be linking to a third-party website not operated by Embrace. We are not responsible for the content of that website and its privacy & security policies may differ from those practiced by Embrace.
The post Mortgage Rates Go Down and Applications Go Up, Albeit Marginally appeared first on Embrace Home Loans.