Mortgage Applications Rise, Valuation Perception Gap Tightens

Mortgage Applications Rise, Valuation Perception Gap Tightens

July 11, 2018
$2 bills
Today’s housing data showed a rising level of home loan applications and a narrowing in the opinion differences between appraisers and homeowners.
The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 6 found the Market Composite Index up by 2.5 percent on a seasonally adjusted basis from one week earlier, although the unadjusted index collapsed by 18 percent compared with the previous week. The seasonally adjusted Purchase Index increased seven percent from one week earlier, but the unadjusted index fell 15 percent compared with the previous week—although it was 8 percent higher than the same week one year ago. The Refinance Index decreased four percent from the previous week to its lowest level since December 2000 and the refinance share of mortgage activity decreased to its lowest level since August 2008, 34.8 percent of total applications, from 37.2 percent the previous week.
Among the federal programs, the FHA share of total applications decreased to 10 percent from 10.2 percent the week prior while the VA share of total applications increased to 11.3 percent from 10.7 percent and the USDA share of total applications remained unchanged at 0.8 percent.
Separately, new data from Quicken Loans has found the gap between appraisal values and homeowner expectations is at its closest point since February 2015. The National Quicken Loans Home Price Perception Index reported that the average home appraisal in June was a mere 0.25 percent lower than what the owners estimated, while the average appraisal value fell 0.63 percent from May to June, according to the National Quicken Loans Home Value Index—although on a year-over-year basis, the average appraisal value was up by 4.57 percent.
“The home value growth in June reflects a much healthier housing market than we have seen in years past,” said Bill Banfield, Quicken Loans’ executive vice president of capital markets. “Some fluctuation month-to-month is normal for a well-functioning real estate market. The annual appraisal changes are also in a healthy range. This slow rise, not straying too far from the inflation rate, helps keep control of affordability.”