Skip to main content

Fewer Mortgage Applications, Higher Home Prices

Phil Hall
Nov 01, 2017
October witnessed the financial equivalent of a fall harvest for mortgage applications, according to the Mortgage Bankers Association’s (MBA) latest Builder Application Survey

Mortgage applications were on the decline last week as home prices continue to soar.
According to the latest data from the Mortgage Bankers Association (MBA) covering the week ending Oct. 27, the Market Composite Index fell by 2.6 percent on a seasonally adjusted basis and by three percent on an unadjusted basis from one week earlier. The seasonally adjusted Purchase Index was one percent lower from one week earlier, while the unadjusted index was two percent lower, although the latter was also 10 percent higher than the same week one year ago. The Refinance Index took a five percent tumble as the refinance share of mortgage activity decreased to 48.7 percent of total applications from 49.5 percent the previous week.
Among the federal programs, the FHA share of total applications increased to 10.4 percent from 9.8 percent the week prior while the VA share of total applications decreased to 9.9 percent from 10.1 percent and the USDA share of total applications increased to 0.8 percent from 0.7 percent.
While fewer mortgage applications were being processed, home prices were setting new records. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.1 percent annual gain in August, up from 5.9 percent in July. The 10-City Composite annual increase came in at 5.3 percent, up from 5.2 percent in the previous month, while the 20-City Composite posted a 5.9 percent year-over-year gain, up from 5.8 percent in the previous month. Seattle led the major metro markets with a 13.2 percent year-over-year price increase, followed by Las Vegas with an 8.6 percent increase and San Diego with a 7.8 percent increase.
“Home price increases appear to be unstoppable,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The ongoing rise in home prices poses questions of why prices are climbing and whether they will continue to outpace most of the economy. Currently, low mortgage rates combined with an improving economy are supporting home prices. Low interest rates raise the value of both real and financial long-lived assets. The price gains are not simply a rebound from the financial crisis; nationally and in nine of the 20 cities in the report, home prices have reached new all-time highs. However, home prices will not rise forever. Measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking. The Federal Reserve is pushing short term interest rates upward and mortgage rates are likely to follow over time, removing a key factor supporting rising home prices.”

Nov 01, 2017
loanDepot And mellohome Introduce Home Services Bundle

loanDepot, Inc. and its sister company mellohome are launching a proprietary bundle of home buying and selling services.

Industry News
Jul 30, 2021
Gateway Mortgage Surpasses 165 Mortgage Centers With 10 New Additions

Gateway Mortgage reported significant growth in the company, prompting it to open 10 new locations across Colorado, Idaho, Oklahoma, Texas, Oregon, and Wyoming.

Industry News
Jul 30, 2021
FHFA Requires 30-Day Notice Prior To Eviction

Wednesday, the Federal Housing Finance Agency (FHFA) announced that tenants of multi-family properties must be given 30 days notice to vacate before the tenant is required to leave the premise.

Industry News
Jul 29, 2021
Houston-Based Stewart Acquires Title First Agency

Ohio-Based Agency Has 20 Offices And Operates in 32 States

Industry News
Jul 28, 2021
Planet Home Lending Reports Total Origination Volume Of $6.8B In Q2 2021

Planet Home Lending's total origination volume reached $6.8 billion in Q2 2021, up 77% from $3.9 billion in Q2 2020.

Industry News
Jul 22, 2021
FHFA Ends Controversial Refinance Fee

The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries, starting August 1, 2021.

Analysis and Data
Jul 19, 2021