Mortgage Activity Holds Steady, While Government Lending Picks Up

Mortgage Interest Rates Drop

Mortgage applications technically dipped last week, but only by a mere 0.7%. Purchase loans fell 2% on their own, while refinance activity dropped just 0.3%. 

Considering the rate on 30-year, fixed-rate loans dropped to a new low, according to the Mortgage Bankers Association’s weekly survey, the dips in applications are surprising.

On the upside, activity on both refinance and purchase loans remains significantly higher than last year (up 24% and 44%, respectively).

Government-backed loans have also seen a notable jump for the week, rising 3% over the week, while VA refinances rose a whopping 11%. USDA loan applications also rose slightly.

“Refinance and purchase activity continue to run well ahead of last year’s pace, fueled by record-low rates and strong homebuyer demand,” says Joel Kan, associate vice president of economic and industry forecasting at MBA. “Housing supply is a challenge for many aspiring buyers, but activity should continue to stay strong the rest of the year.”

More in mortgage and housing news

  • The total share of loans in forbearance dropped to 6.32% last week, amounting to about 3.2 million homeowners. Nearly two-thirds of those homeowners are in the extension period of their forbearance.
  • Overall mortgage credit availability fell by almost 2% in September, indicating that mortgage standards are tightening. Availability of conforming loans fell the most at 9.5%.
  • Vacation destinations are seeing a rise in interest from homebuyers. According to research from Zillow, listing views in 20 popular vacation areas are up 50% over last year. The top spots include Ocean City, New Jersey; Cape Cod, Massachusetts; Brainerd, Minnesota; Park City, Utah; and Naples, Florida.
  • According to the latest Home Price Index from CoreLogic, August home prices increased 5.9% over the year and 1% over the month. The cause is largely dwindling supply, which fell 17% between August 2019 and August 2020. Home prices rose the most in Phoenix, jumping 9.8% over the year.

This week in mortgage rates

Rates either fell or held steady across all loan products this week. 

Here’s how rates looked for each one:

  • Conforming 30-year, fixed-rate loans: 3.00%, 0.32 points
  • Jumbo 30-year, fixed-rate loans: 3.30%, 0.35 points
  • FHA 30-year, fixed-rate loans: 3.12%, 0.35 points
  • 15-year, fixed-rate loans: 2.59%, 0.32 points

Check back here next week for the latest mortgage news.

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By Aly Yale / October 16th, 2020 / Categories: , / Tags:

Aly Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.