Week in Review - Application Numbers and Interest Rates

Here is some great information regarding applications received and interest rates for purchase and refinance transactions.

Below is excerpt from the Mortgage Bankers Association

"Refinance activity fell substantially last week," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Although rates remain low, there appears to be a smaller pool of borrowers who are willing and able to refinance at today's rates."

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.02 percent from 5.00 percent, with points decreasing to 1 from 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 4.34 percent from 4.33 percent, with points decreasing to 1.14 from 1.19 (including the origination fee) for 80 percent LTV loans.

As you can see rates moved up a bit but the cost of getting those rates decreased, which in some cases is a benefit to the borrower. I think we are likely to see a jump in applications for this week as compared to last week. Rates were mixed this week as early on there were indications of the market in a friendly position due to sales of 5 - Year Notes going well on Wednesday. However, the money left the market and pushed back on rates. This morning we had some more "unfriendly" market news, but rates pushed back for a slight improvement. Overall, rates were up about .125% on the 30 YR Fixed rate note but held constant for most other programs.

I still think we are in hold pattern to see where the overall trend goes.

The FHA Insured 30 YR. Fixed program is still an excellent option for first time home buyers. The rates are in the low 5% range and the changes for MIP and Upfront MIP haven't been put into effect keeping the overall costs of the loan lower than where they may go. Homeowner affordability is the key here.

Don't forget about the tax credit up to $8K for first time home buyers or up to $6500 for "move-up" buyers that have owned their home for at least the past 5 of 8 years.

That is a ton of mortgage market news for the week. As always, should you have any questions or concerns for you or your clients, please don't hesitate to contact me.

My goal will always be to make the loan financing process as worry free as possible.