Refinance

Severe winter weather and another hike in mortgage rates stifled loan volume for the week, according to the Mortgage Bankers Association.

While sales shot up from the same time last year, inventory reached its lowest level since Remax started its National Housing Report in 2007.

Origination volume hit a record high in 2020 as more borrowers tapped the equity in their homes and investors and second-home purchasers flocked to the market at levels unseen since before the Great Recession.

Between the dip in refis and the approach of the spring buying season, mortgage lenders are likely to start paying a little more attention to the purchase market, which is less rate-sensitive.

While its net income declined annually for the second consecutive year, CEO Hugh Frater touted Fannie Mae’s resiliency in a record year for providing mortgage liquidity.

The company purchased $1.1 trillion of single-family mortgages and $83 billion of multifamily loans during 2020.

But the average amount for a purchase loan increased to an all-time high, showing the upper end of the housing market remains strong.

After mortgage rates rose for three weeks, borrowers took advantage of a 3-basis-point dip and sparked a short-term refinancing rally, according to the Mortgage Bankers Association.

With the shift to a low-rate environment dominated by no cash-out refinancing, use of an alternative to traditional valuations has soared.

While financing costs are still low enough to offset sticker-shock from rising home prices, a slight increase in the average 30-year conforming rate weighed on borrowers, according to the Mortgage Bankers Association.