At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country.  An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.  For the week ended November 21st, the composite mortgage application index, which includes both home purchase mortgages and refinancings, decreased 4.3% driven by declines in both purchase and refinance applications.

For the week ended November 21st, the purchase application index declined 10.0% as compared to the prior week, which was up 12.0%.  The refinance application index declined 4.0% after increasing a modest 1% in the prior week.  The composite index, which includes both purchase and refinance mortgage applications, decreased 4.3% as compared to the prior week, which was up 4.9%.  Because it was the week before the Thanksgiving holiday, the decline in mortgage application activity was not unexpected and it is challenging to draw meaningful conclusions from the report.  Interest rates remained attractive with the average interest rate for conforming loans decreasing to 4.15%, as compared to 4.18% for the prior week.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

It is not unsurprising for application activity to decline the week before a holiday but the trend for the past month as compared to the prior year has been negative.  With interest rates remaining low it will be interesting to see if mortgage application activity picks up in December.  This is typically a slow time of year for purchase activity but existing home owners may want to refinance to lock in low interest rates before the end of the year.  Use the INTEREST RATES feature on FREEandCLEAR to view rates for lenders in your area and then use our Refinance Calculator or Mortgage Qualification Calculator to assess if now is a good time for you to refinance your mortgage or buy a home.

The FREEandCLEAR Mortgage Expert

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There are two primary measures of housing prices that we track at FREEandCLEAR: the Federal Housing Finance Agency (FHFA) House Price Index, which uses certain nationwide mortgage activity to track home prices and the S&P / Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan markets.  Both indices are reported on a monthly basis and include information for the month that is two months prior to the reporting date.

The FHFA House Price Index for November 2014 showed that September housing prices were flat as compared to August and increased 4.3% on a year-over-year basis (so as compared to September 2013).  The FHFA House Price Index for September came in below analyst projections for a 0.4% increase on a month-over-month basis and the annual change was less than the 4.7% annual increase in August.  The S&P / Case-Shiller Home Price Index for November 2014 showed that housing prices increased 0.3% in September as compared to August and increased 4.9% on a year-over-year basis, although this represented the smallest year-over-year increase in almost two years.  The S&P / Case-Shiller Home Price Index figures met analyst expectations with the monthly figure improving and the annual figure declining.  Although the indices showed mixed results, both figures show that nationwide housing prices continue to cool off.  It is important to highlight that these indices reflect the trend in nationwide housing prices and housing prices for a specific region or city can vary significantly.  The latest reports for these indices reinforce the idea that housing prices are stabilizing. (Source: Bloomberg)

What it Means for Mortgage Borrowers

The latest figures from the FHFA Housing Price Index and S&P / Case-Shiller Home Price Index suggest that the housing market is becoming more favorable for buyers.  Rising home prices makes home ownership less affordable, especially for first-time home buyers, so flattening prices is a welcome sign. Cooling housing prices are combining with lower interest rates to create more appealing real estate market conditions for home buyers as we head into 2015.  If you are thinking about buying a home, use the FREEandCLEAR Mortgage Selector to determine the mortgage size and program that are right for you and use the INTEREST RATES feature to compare interest rates for lenders in your city.

The FREEandCLEAR Mortgage Expert

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In our effort to cover important trends that affect the mortgage market, FREEandCLEAR keeps a close eye on existing home sales, which is the number of previously constructed housing units that are sold in a month.  The existing home sales figure is reported separately from the new home sales figure, which is the number of newly constructed homes that are sold in a month.  An increase in existing home sales reflects improvement in the housing market while a decrease in existing home sales reflects a weakening of the housing market.  In addition to reporting the number of housing units sold, the existing home sales report also includes information on the supply of units for sale as wells as the median and average existing home sales price.

The existing home sales report, issued on a monthly basis, includes statistics for the prior month.  The report for November 2014 showed that existing home sales in October increased 1.5% on a month-over-month basis and increased 2.5% on a year-over-year basis to an annualized 5.26 million units (so if you take the home sales figure for September and multiplied it by twelve), which exceeded expectations.  Sales of condominiums increased 3.3% to 630,000 units while sales of single-family homes increased 1.3% to 4.63 million units.  The number of existing homes available for sale, known as supply, decreased by 8,000 units, or 2.6%, to 2.22 million units.  The median existing home sales price decreased approximately 1.0% to $208,300 from $209,700.  For the fourth consecutive month, first-time home buyers represented 29% of all home buyers, consistent with our recent blog post about the decline in first-time home buyers over the past several years.  The October existing home sales figure came in above market expectations for the second consecutive month due to due to moderating housing prices and relatively low interest rates pulling buyers into the real estate market. (Source: Bloomberg, National Association of Realtors)

What it Means for Mortgage Borrowers

The uptick in existing home sales for the second straight month is an encouraging sign for the mortgage and real estate markets.  Although the increase in existing home sales is not very large, the latest figure signals that the housing and mortgage sectors are gradually heading in the right direction.  Consistently low participation by first-time home buyers, however, continues to hold the market back. More first-time home buyers will need to enter the market to truly jumpstart home sales.  First-time home buyers should check out FREEandCLEAR’s Mortgage Expert Insights to review money and time-saving mortgage tips and advice from a true mortgage expert with over 40 years of industry experience.

The FREEandCLEAR Mortgage Expert

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At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country.  An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.  For the week ended November 14th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, increased 4.9% driven by strong growth in purchase applications.

For the week ended November 14th, the purchase application index increased a robust 12.0% as compared to the prior week, which was up 1.0%.  The refinance application index increased a modest 1% although the result reversed a negative trend as the refinance index was down 11.0% for the prior week.  The composite index, which includes both purchase and refinance mortgage applications, increased 4.9% as compared to the prior week, which was down 0.9%.  The boost in home purchase mortgage applications was a welcome sign following the deceleration in purchase application activity for the prior week.  Interest rates remained relatively steady with the average interest rate for conforming loans decreasing very slightly to 4.18%, as compared to 4.19% for the prior week.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

Low interest rates seem to be slowly pulling home buyers into the real estate market.  Although the purchase application index showed positive momentum for the week ended November 14th, purchase mortgage application activity for 2014 is down as compared to 2013.  That means mortgage lenders should still be aggressively pursuing new mortgage business.  Steady interest rates and active lenders means that it remains a good time for borrowers to purchase a home or refinance their existing mortgage.  Check out our Mortgage Qualification Calculator to determine what size mortgage you can afford and our Refinance Calculator to assess if you should refinance your mortgage.  You can also use our INTEREST RATES feature to keep track of interest rates and fees for lenders in your area.

The FREEandCLEAR Mortgage Expert

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A key report that reflects the strength of the housing market is the monthly Housing Starts report released jointly by the U.S. Census Bureau, U.S. Department of Commerce and U.S. Department of Housing & Urban Development.  The Housing Starts report includes two pieces of data: starts and permits.  A housing start is counted when construction begins on a new single or multifamily property.  A permit is counted when a permit is issued by a local government to a property owner or builder to begin construction on a new single or multifamily property. Because construction typically begins soon after a new permit is issued, housing starts and permits are typically highly correlated.

The Housing Starts report issued in November 2014 showed that housing starts declined while permits increased in October after both figures rebounded in September.  The housing starts figures tend to fluctuate on a monthly basis so although the October figures came in slightly below analyst expectations the results were not totally unexpected.  The report showed that housing starts declined 2.8% in October to approximately 1,009,00 units while permits grew for the second consecutive month, increasing 4.8% to 1,008,000.  The decrease in housing starts was driven by a 15.4% decline in the multifamily segment while single family housing starts showed an increase of 4.2% for the second month in a row.  Multifamily permits increased 10.0% in October while single family permits rose by a more modest 1.4%.  The single family segment is larger than the multifamily segment.  The Housing Starts report continues to fluctuate on a monthly basis as the October figures compare to a 6.3% increase in starts and a 1.5% increase in permits in September. (Source: Bloomberg)

What it Means for Mortgage Borrowers

Housing starts continue to fluctuate from month to month but positive figures for both single family housing starts and permits could mean that home buyers have more single family new home inventory available in the future.  Additional housing supply helps to alleviate pricing pressure and could mean that there are more affordable options for home buyers, at least in the new home market.  If you are thinking about buying a home, use the FREEandCLEAR Mortgage Selector to determine the mortgage size and program that are right for you.  Prospective home buyers can also use the INTEREST RATES feature on FREEandCLEAR to review interest rates and fees for lenders in their area.

The FREEandCLEAR Mortgage Expert

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The National Association of Home Builders Housing Market Index is one of the key housing market statistics that we track at FREEandCLEAR.  The Housing Market Index incorporates factors such as current and expected new home sales and interest level from potential new home buyers.  It is important to highlight that the index focuses on new home sales, so homes built by builders that have never been lived in before, as opposed to existing home sales, which represents a larger portion of the overall housing market.

For November 2014, the Housing Market Index rebounded to 58 as compared to 54 in October 2014.  The November figure exceeded expectations driven by increases in the three components that comprise the index — new home sales, future sales and home buyer traffic.  The new home sales component of the index increased 5 points, the future sales component increased two points and the home buyer traffic component, which has been lackluster most of the year, increased 4 points.  The November figure bodes well for new home sales and the boost in future sales and home buyer traffic provide signs for optimism as we close out 2014 and look toward 2015.  Lower interest rates and flattening home price appear to be having a positive effect on the housing market index although it is too early to tell if the November figure is the beginning of a sustained improvement in the new home market. (Source: Bloomberg)

What it Means for Mortgage Borrowers

The rebound in the Housing Market Index after a decline in October means that home buyers may be responding to lower interest rates although many first-time home buyers continue to sit on the sidelines due to tighter lending guidelines and down payment requirements.  Although smaller than the existing home market, the new home market may offer compelling entry point for buyers looks to purchase a home for the first time.  The FREEandCLEAR First-Time Home Buyer Mortgage Cheat Sheet addresses the key topics borrowers should understand before getting a mortgage for the first time. Borrower should also keep tabs on mortgage rates using the INTEREST RATES feature on FREEandCLEAR.

The FREEandCLEAR Mortgage Expert

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At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country.  An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.  For the week ended November 7th, the composite mortgage application index, which includes both home purchase mortgages and refinancings, decreased slightly with home purchase mortgage applications inching up and refinancing applications continuing their recent downward slide.

For the week ended November 7th, the purchase application index increased 1.0% as compared to the prior week, which was up 3.0%.  The decrease in the refinance application index accelerated as the index declined 11.0% as compared to the prior week, which was down 6.0%.  The composite index, which includes both purchase and refinance mortgage applications, decreased 0.9% as compared to the prior week, which was down 2.6%.  The drop-off in refinance applications dragged down the composite application index, which declined for the third consecutive week.  Industry analysts were hoping to see continued momentum in the home purchase mortgage market and although the purchase application index increased, the deceleration relative to the prior week is somewhat disappointing.  Interest rates remained relatively steady with the average interest rate for conforming loans increasing to 4.19%, as compared to 4.17% for the prior week.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

The lackluster performance of the purchase application index means that home sales will likely remain relatively flat over the next several weeks.  Analysts had hoped that the decline in interest rates in October would trigger a meaningful increase in home purchase activity.  Although last week’s mortgage application index report showed signs of life in the home purchase market, this week’s report suggests that uptick in activity was relatively temporary.  This is not bad news for borrowers though.  A decline in mortgage application activity means that lenders should be more aggressive in trying to generate new business.  Borrowers can potentially take advantage of lender competition by negotiating better terms for their mortgages.  Check out our step-by-step discussion on how to compare and select mortgages and use our newly updated INTEREST RATES feature to review interest rates and fees for lenders in your area.

The FREEandCLEAR Mortgage Expert

www.freeandclear.com

At FREEandCLEAR, we follow the Mortgage Bankers’ Association (MBA) mortgage applications index which measures both purchase and refinance applications for mortgage lenders across the country.  An increase in the MBA applications index reflects an increase in mortgage applications while a decrease in the index reflects a decline in mortgage applications.  For the week ended October 31st, the composite mortgage application index, which includes both home purchase mortgages and refinancings, decreased for the second consecutive week although home purchase mortgage applications increased, reversing a recent downward trend.

For the week ended October 31st, the purchase applications index increased 3.0% as compared to the prior week, which was down 5.0%.  The refinance applications index decreased 6.0% as compared to the prior week, which was down 7.0%.  The composite index, which includes both purchase and refinance mortgage applications, decreased 2.6% as compared to the prior week, which was down 6.6%.  Although the composite applications index declined for the second consecutive week, the increase in purchase mortgage applications is a positive sign.  In good news for the real estate market, the decline in interest rates over much of October resulted in an uptick in purchase applications toward the end of the month.  For the week, interest rates inched up slightly with the average interest rate for conforming loans increasing to 4.17%, as compared to 4.13% for the prior week.  (Source: Bloomberg)

What it Means for Mortgage Borrowers

The increase in purchase mortgage activity is a welcome development for the home purchase real estate market.  Although it is too early to tell, lower interest rates and moderating housing prices could be bringing home buyers into the marketplace.  It will be interesting to watch the mortgage applications index over the coming weeks to see if this week’s results are the start of a new positive trend for purchase applications or a temporary increase due to lower interest rates.  As always, the FREEandCLEAR Mortgage Expert Blog will be keeping a close eye on the mortgage applications index as well as all the developments in the mortgage and real estate markets so check back frequently and check out our COMPARE LENDERS feature to keep tabs on interest rates for lenders in your area.

The FREEandCLEAR Mortgage Expert

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