Mortgage applications

Alternative data verifications used in non-qualified mortgage underwriting have increasingly been used by government-sponsored enterprises in response to expansive Biden-era housing goals, volatile rates and evolving technology.

Purchases and refinances both came in lower, with overall volumes 60% below numbers from a year ago.

Although refinances picked up after the July 4th holiday, they failed to offset a larger decline in purchases.

Average purchase-loan amounts shrank for the second week in a row and are currently 12% below their record size in March.

Overall mortgage volumes flattened last week, but average loan amounts, particularly for purchases, are shrinking according to the Mortgage Bankers Association.

But total volume is still 53% below last year’s level, while Fannie Mae found the dollar value of refinances down by over 70%.

Smaller average purchase-loan sizes, which contracted by almost 2%, point to potential signs of diminishing enthusiasm among homebuyers.

Elevated prices coupled with higher mortgage rates are leading to affordability challenges that have reduced borrowing volumes.

Refinances and purchases both slowed last week, while average loan sizes registered an uptick.

The numbers illustrate how quickly housing costs are increasing and the price buyers might pay if they wait to finance.

While the purchase index registered a tiny uptick, activity has fallen to nearly the same level seen during the first months of the pandemic shutdown.

A sustained downturn in 2022 activity has also led the Mortgage Bankers Association to revise its originations forecast for the year.

A 5% surge in purchase applications drove up overall activity, while average loan amounts also increased across all categories.

While longtime non-QM companies have originated mortgages in the segment for years, new contenders have come into the market as the number of potential customers who fit into the category grows.

Purchase numbers came in higher for both conventional and government activity, while the average loan amount shows signs of easing.

Surging interest rates have pushed refinance applications down by over 70% in a year, while ARMs have doubled their share in three months.

Meanwhile, adjustable-rate mortgages saw their largest volume share since 2019.

Refinances now also make up less than 40% of new applications, with numbers at their lowest since 2019, according to the Mortgage Bankers Association.

But the sluggish pace of refinances brought down overall application numbers last week.

Refinance applications came in 54% lower than a year ago, but average loan sizes accelerated, with the purchase amount setting another record.