Mortgage application volume fell sharply to 7.1 percent for last week based on a survey from the Mortgage Bankers Association’s latest report ending October 12, 2018, still the data did not factor in the Columbus Day holiday.
Home loan refinance applications were down 38.1 percent lower than a year ago and fell 39.0 percent from the week before. Rates have incrementally moved up 96 basis points in the past year, and in the past four weeks rates have moved 22 basis points higher. The result is less borrowers able to benefit from lower rates, home loan refinance volume stifled and moved down 39.0 percent the from the week before and fell to 38.1 percent of total applications last week.
For 30-year fixed conforming home loan, purchases with loan balances $453,100 or less rates moved to their highest since February 2011 from 5.05 percent, to 5.10 percent, with higher points from 0.51 to 0.55 not including an origination fee for 80 percent (LTV) loan-to-value, 20 percent down payment loans.
To purchase a home, mortgage applications fell 6 percent for the week. Compared with the same week one year ago application volume was 2.5 percent higher. Homebuyer mortgagor is still strong but market affordability showed signs before rates began to move up as lack of inventory made home prices sharply higher. The combination of rising rates and higher home prices are evident as to why the refinance and home purchasing are slowing down.
Applications for FHA home loans fell 10.4 percent from 10.5 percent the week before. VA applications actually increased to 10.4 percent from 10.0 percent the week before. USDA applications stayed the same at 0.8 from the week before.
Earlier this week October 16, 2018, at the Mortgage Bankers Association (MBA) Annual Convention and Expo in Washington, D.C. MBA chief economist and senior vice president for research and industry technology Mike Fratantoni, said “We are seeing some deceleration in the rate of home price growth, but believe this is a healthy pause for the market, as it will allow income growth to catch up to the recent run-up in home values.”
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