Loan Demand Buoyed by Slight Drop in Rates

Wednesday, February 08, 2017

A slight decrease in mortgage rates last week gave home buyers a slight jolt to get moving. Total mortgage application volume, which includes refinancings and home purchases, increased 2.3 percent on a seasonally adjusted basis last week, the Mortgage Bankers Association reported Wednesday. That said, applications continue to run 23 percent below year-ago levels, mostly due to a big drop in refinancing applications.
Last week, mortgage applications for refinancings rose 2 percent on a seasonally adjusted basis, but they are 40 percent lower than a year ago, the MBA reports. Many borrowers may have already taken advantage of low mortgage rates over the past year, so the refinancing pool continues to shrink.
Applications for home purchases, viewed as a gauge of homebuying activity, also rose 2 percent last week. Home purchase applications are now 3.6 percent higher than a year ago.
“Mortgage rates continued to show volatility from week to week, decreasing 4 basis points to 4.35 percent last week after two weeks of increases,” says Joel Kan, an MBA economist. “Since reaching a recent peak of almost 4.5 percent toward the end of December, rates have bounced around the 4.3 percent mark for the past six weeks

Consumers Will Compromise to Buy Homes

Real Estate News | Wednesday, February 08, 2017

Consumers view homeownership as a priority and say they’re willing to make significant compromises in order to purchase a home, according to a survey of more than 1,000 consumers considering a home purchase in 2017, conducted by the online brokerage firm
Sixty-nine percent of survey respondents say they’re concerned they won’t have enough cash for a down payment in order to buy a home. As such, they’re willing to forgo some financial goals and investments to make sure they save enough.
Respondents said that saving for a home takes priority over saving for an emergency (61 percent) or contributing to retirement funds (60 percent). Seventy-two percent of survey respondents said they would limit their contributions to other investment funds in order to save enough to buy a home.
Surveyed consumers also say they’re willing to compromise on some elements of the home if it means they can move into a home this year. For example, 51 percent said they would consider buying a fixer-upper, and 36 percent said they would purchase a smaller home than what they desire.