Mortgage Bankers Association

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Recent pullbacks in interest rates have lowered monthly payments, but amounts needed still make home buying unaffordable by most standards, according to new reports.

Activity fell despite an ongoing slide in rates, but elevated interest in VA loans, particularly refinances, managed to lift the government-sponsored index higher by a fraction, the Mortgage Bankers Association said.

Falling interest rates are behind a recent spike in government-backed lending as well as refinances, according to the Mortgage Bankers Association.

Decreasing availability of jumbo and non-QM products accounted for most of November's pullback, as other types of loan offerings saw minimal changes, the Mortgage Bankers Association said.

With a great deal of mortgage industry conversation revolving around how companies might best survive the current downturn, a theme has emerged around the value of offering more, even if the market expects to originate less.

Income-producing loans secured by real estate are under pressure at banks, the government-sponsored enterprises, insurers, and in CMBS to varying degrees.

Heightened government-backed activity also helped bring the average loan size down to its lowest mark in 2023, with purchase amounts falling below $400,000 for the first time since January, the Mortgage Bankers Association found.

Affordability decreased during the month across all racial groups and loan types tracked by the Mortgage Bankers Association.

Rising purchase activity countered falling refinances, as declining interest rates helped bring some aspiring buyers to market, the Mortgage Bankers Association said.

Both purchases and refinances saw an uptick in applications, but total numbers are still more than 16% lower from a year ago, the Mortgage Bankers Association said.

Loan activity overall came in higher for the second week in a row, with interest rates flattened following an extended volatile period, the Mortgage Bankers Association said.

A significant fallback in rates brought some borrowers back to the table but cooled interest in adjustable-rate loans, which had surged throughout October, the Mortgage Bankers Association said.

Despite the 10% jump in adjustable-rate mortgages, a decline in federally sponsored application volumes dragged overall numbers lower for the fifth time in six weeks, according to the Mortgage Bankers Association.

Despite the overall decline, refinances saw an uptick even as rates approached 8%, with volumes up in both conventional and government-sponsored markets, the Mortgage Bankers Association said.

The company's builder and mortgage banking segments both ended up in the black, as sales for new constructions outperform the existing-home market.

Adjustable-rate mortgages nabbed their largest share of activity in almost a year, as the 30-year conforming average inched closer to 8%, the Mortgage Bankers Association said.

But the industry will still have to go through some pain in 2024, Wharton Professor Susan Wachter told attendees at the Mortgage Bankers Association annual convention.

Federal Reserve Bank of Philadelphia President Patrick Harker said higher interest rates are making it more challenging for first-time home buyers by raising borrowing costs and limiting inventory, which is also leading to higher home prices

As housing-industry groups sought relief from the Federal Reserve, overall loan-application volumes eked out a weekly gain last week thanks to ARM activity, the Mortgage Bankers Association said.