Mortgage Rates Drop Again, Applications Rise Slightly

On Thursday, November 30, 2023, Freddie Mac released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.22 percent, down from last week when it averaged 7.29 percent. A year ago at this time, the 30-year FRM averaged 6.49 percent.

The 15-year fixed-rate mortgage averaged 6.56 percent, down from last week when it averaged 6.67 percent. A year ago at this time, the 15-year FRM averaged 5.76 percent.

“Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” said Sam Khater, Freddie Mac’s Chief Economist. “The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels. The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory.”

According to the Mortgage Bankers Association (MBA), mortgage applications increased 0.3 percent from one week earlier. The Refinance Index decreased 9 percent from the previous week and was 1 percent higher than the same week one year ago. The unadjusted Purchase Index decreased 31 percent compared with the previous week and was 19 percent lower than the same week one year ago. This week’s results include an adjustment for the observance of the Thanksgiving holiday.

“Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed rate dipping to 7.37 percent, the lowest level in 10 weeks. There was a slight increase in applications overall, driven by a 5 percent increase in purchase applications, but refinance applications decreased over the week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

Added Kan, “Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago. The purchase market remains depressed because of the ongoing low supply of existing homes on the market. Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”

More housing and market news

According to MBA’s Purchase Applications Payment Index (PAPI), homebuyer affordability declined in October, with the national median payment applied for by purchase applicants increasing to $2,199 from $2,155 in September.

MBA awarded more than $156,000 in scholarships under its Path to Diversity (P2D) Scholarship Program during the 2023 fiscal year ending September 30.

“MBA is committed to empowering industry professionals’ career growth through continued education, and the Path to Diversity Scholarship Program builds a foundation for increased opportunity and success,” said Amber Lawrence, MBA’s Associate Vice President of Diversity, Equity, and Inclusion. “Investing in diversity within the real estate finance industry opens doors, breaks barriers, and fosters inclusion for under-represented professionals.”

Freddie Mac scored 100% on the Human Rights Campaign (HRC) Foundation’s 2023-2024 Corporate Equality Index (CEI), a benchmarking tool that grades corporate policies, practices, and benefits pertinent to LGBTQ+ employees.

“We are honored to again be recognized by the Human Rights Campaign for our commitment to LGBTQ+ inclusion,” said Senior Vice President and Chief Diversity and Inclusion Officer Wendell Chambliss. “We are particularly humbled that we achieved 100%, even as HRC ramped up its criteria for this designation. At Freddie Mac, we are always striving to do more to support a workplace where our employees can bring their authentic selves to work. That freedom of individuality helps improve employee engagement, performance, and enthusiasm within our company as we meet our mission to make home possible for renters and buyers living in all communities.”

Additional mortgage activity  

• The refinance share of mortgage activity decreased to 30.6 percent of total applications from 32.4 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity decreased to 8.1 percent of total applications.
• The FHA share of total applications decreased to 13.5 percent from 14.8 percent the week prior.
• The VA share of total applications increased to 12.6 percent from 11.3 percent the week prior.
• The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

This week in mortgage rates

Rates drop again. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 7.22% (down from 7.29%)
• 15-year fixed-rate loans: 6.56% (down from 6.67%)

Check back next week for the most up-to-date mortgage and housing news.

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Nov 23 – Mortgage Rates Continue to Fall, Applications Increase

On Thursday, November 23, 2023, Freddie Mac released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.29 percent, down from last week when it averaged 7.44 percent. A year ago at this time, the 30-year FRM averaged 6.58 percent. This week’s results include an adjustment for the observance of Thanksgiving.

The 15-year fixed-rate mortgage averaged 6.67 percent, down from last week when it averaged 6.76 percent. A year ago at this time, the 15-year FRM averaged 5.9 percent.

“Mortgage rates continued to decrease heading into the Thanksgiving holiday,” said Sam Khater, Freddie Mac’s Chief Economist. “In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory. This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low.”

According to the Mortgage Bankers Association (MBA), mortgage applications increased 3 percent from one week earlier. The Refinance Index increased 2 percent from the previous week and was 4 percent lower than the same week one year ago. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 20 percent lower than the same week one year ago.

“U.S. bond yields continued to move lower as incoming data signaled a softer economy and more signs of cooling inflation. Most mortgage rates in our survey decreased, with the 30-year fixed mortgage rate decreasing to 7.41 percent, the lowest rate in two months,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Mortgage applications increased to their highest level in six weeks but remain at very low levels. Purchase applications were up almost four percent over the week, on a seasonally adjusted basis, as both Conventional and government purchase loans saw increases. The average loan size on a purchase application was $403,600, the lowest since January 2023. This is consistent with other sources of home sales data showing a gradually increasing first-time homebuyer share.”

Added Kan, “Refinance applications increased 1.6 percent last week, but the level of refinances continues to be well below historical averages, given that most borrowers already have a rate well below current market rates.” 

More housing and market news

The share of mortgage loans in forbearance decreased to 0.29% in October. According to MBA’s estimate, 145,000 homeowners are in forbearance plans.

“For the first time since MBA began tracking the reasons for forbearance in October 2022, temporary hardships such as job loss, death, and divorce represent a larger share of loans in forbearance by reason than a COVID-19 hardship,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “This upward trend will continue, as Fannie Mae and Freddie Mac sunset the use of COVID-19 as a reason for delinquency starting in November 2023, and FHA’s COVID-19 forbearance period ends at the end of November 2023.”

Added Walsh, “Forbearance is still an option for many distressed homeowners, but in most cases, the requirements to obtain a forbearance will not be as streamlined as they were during the pandemic.” 

Additional mortgage activity  

• The refinance share of mortgage activity increased to 32.4 percent of total applications from 31.9 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity decreased to 8.3 percent of total applications.
• The FHA share of total applications increased to 14.8 percent from 14.4 percent the week prior.
• The VA share of total applications increased to 11.3 percent from 11.2 percent the week prior.
• The USDA share of total applications decreased to 0.4 from 0.5 percent the week prior.

This week in mortgage rates

Rates continue to slide down. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 7.29% (down from 7.44%)
• 15-year fixed-rate loans: 6.67% (down from 6.76%)

Check back next week for the most up-to-date mortgage and housing news.

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Nov 16 – Mortgage Rates Trend Down, Applications Rise

On Thursday, November 16, 2023, Freddie Mac released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing the 30-year fixed-rate mortgage (FRM) averaged 7.44 percent, down from last week when it averaged 7.5 percent. A year ago at this time, the 30-year FRM averaged 6.61 percent.

The 15-year fixed-rate mortgage averaged 6.76 percent, down from last week when it averaged 6.81 percent. A year ago at this time, the 15-year FRM averaged 5.98 percent.

“For the third straight week, mortgage rates trended down, as new data indicates that inflationary pressures are receding,” said Sam Khater, Freddie Mac’s Chief Economist. “The combination of continued economic strength, lower inflation, and lower mortgage rates should likely bring more potential homebuyers into the market.”

According to the Mortgage Bankers Association (MBA), mortgage applications increased 2.8 percent from one week earlier. The Refinance Index increased 2 percent from the previous week and was 7 percent lower than the same week one year ago. The unadjusted Purchase Index increased 0.3 percent compared with the previous week and was 12 percent lower than the same week one year ago.

“Although Treasury rates dipped midweek, mortgage rates were little changed on average through the week. The 30-year fixed mortgage rate remained at 7.61 percent, about 30 basis points lower than three weeks ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both purchase and refinance applications increased to the highest weekly pace in five weeks but remain at very low levels. Despite the recent downward trend, mortgage rates at current levels are still challenging for many prospective homebuyers and current homeowners.” 

More housing and market news

New home purchases increased in October by 6 percent compared with September 2023 and rose 39.7 percent compared with a year ago.

“Purchase activity for newly constructed homes continued its upward climb in October with purchase applications up 40 percent compared to a year ago, the ninth consecutive month of annual growth,” said MBA’s Kan. “Home builders have been able to temper this high-rate environment by offering buyers rate buydowns and other incentives. We estimate that the pace of home sales increased for the third straight month to a 715,000-unit annual pace — the strongest sales month since May 2023.”

Added Kan, “The FHA share of applications increased to 26 percent, the highest share since the survey began in 2013, as more first-time homebuyers turn to the new home market for more options and as some builders start to build more starter homes.”

According to the MBA, independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net loss of $1,015 on each loan they originated in the third quarter of 2023, an increase from the reported loss of $534 per loan in the second quarter of 2023.

The Federal Housing Finance Agency (FHFA) announced that the multi-family loan purchase caps for Fannie Mae and Freddie Mac in 2024 will be $70 billion. FHFA will require at least 50% of Fannie and Freddie’s multi-family businesses be mission-driven affordable housing. 

After the Federal Housing Authority released its annual report, Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), said, “The FHA program is healthy, with a high capital reserve ratio and delinquency levels that are now lower than before the pandemic. We applaud the tremendous efforts of HUD, FHA lenders, and mortgage servicers in managing risk, originating quality loans, and helping distressed homeowners exit forbearance and stay in their homes. The Fund’s capital reserve ratio is far above the statutory minimum reserve ratio and is well positioned to withstand any economic slowdown.”

According to the Mortgage Credit Availability Index (MCAI), mortgage credit availability increased in October. “Mortgage credit availability rose in October, but the growth was driven by increased activity in the Jumbo market. The Jumbo index increased by 2.7 percent to the highest level in 14 months — its third straight monthly increase,” said MBA’s Kan. “However, despite the uptick in credit availability recently, we are still close to the lowest levels since 2013. Loan offerings remain narrower as lenders have reduced capacity to cope with the lower origination volumes.”

Additional mortgage activity  

• The refinance share of mortgage activity increased to 31.9 percent of total applications from 31.4 percent the previous week.
• The adjustable-rate mortgage (ARM) share of activity decreased to 8.8 percent of total applications.
• The FHA share of total applications decreased to 14.4 percent from 14.7 percent the week prior.
• The VA share of total applications increased to 11.2 percent from 10.5 percent the week prior.
• The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

This week in mortgage rates

Rates trend down. Here’s how average fixed rates broke down:

• 30-year fixed-rate loans: 7.44% (down from 7.5%)
• 15-year fixed-rate loans: 6.76% (down from 6.81%)

Check back next week for the most up-to-date mortgage and housing news.

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