Mortgage Application Volume Rises as Rates Fall

A drop in interest rates due to global economic worries fueled an increase in mortgage applications last week, according to the Mortgage Bankers Association.

The MBA's Market Composite Index reported that the volume of mortgage loan applications lifted 8.8% on a seasonally adjusted basis from the previous week. The refinance index also increased by 11%, while the purchase index rose 0.4% from the week before.
This week's results include an adjustment to account for the Martin Luther King holiday, the MBA noted.

As a share of overall mortgage activity, refinance fell to 59% from 59.1% a week earlier. The FHA share also decreased during that time to 12.7% from 13.7%, while the VA share remained stable at 11.9%.

Conversely, the adjustable-rate mortgage and VA shares rose to 6.9% and 11.1%, respectively. The USDA share of total applications kept put at 0.7%.

Interest rates fell across the board from the previous week for all loan types.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) dropped four basis points to 4.02%, its lowest level since October. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased four basis points to 3.89%.

The 30-year fixed-rate mortgages backed by the FHA had its average contract rate fall three basis points to 3.83%. The average contract interest rate for 15-year fixed-rate mortgages fell a single basis point to 3.28%, while the rate for 5/1 ARMs dropped sharply by 11 basis points to 3.09%.

Lock your mortgage rates before its too late. An in depth analysis as to how Jobs Report affect Mortgage Rates.

The Bureau of Labor Statistics publishes its Non- Farm Payrolls report commonly known as “The Jobs Report” which gives a detailed picture of the employment changes across ten private labor market sectors including finance. Wall street closely watches this report for two reasons, one being that jobs and labor market are linked closely to the U.S economy and the other reason being that jobs are closely linked to Federal Reserve policy. So today is a volatile day for mortgage market.

Jobs report gives us a detailed look at the U.S labor market and also identifies which economic areas are expanding and contracting. It also lists the current U.S unemployment rate; an information which is vital to understanding investment climate. 

Job growth is paramount to economic growth and this in turn drives investment strategy. More capital a person has, more confident he becomes to buy homes or relocate. So it’s no coincidence that labor market’s rebound has increased home prices. Nationally, home values have recovered all of last seven year’s losses. 

In 2008-2009, when the U.S economy fell into recession, 7.4 million jobs were eliminated. Since then 12.6 million jobs have been added to the U.S economy – a 170 percent recovery in terms of employed people in US. And should the December Non- Farm Payrolls data read stronger than expected, then Feds may raise the Fed Funds Rate at its next meeting which is scheduled for the last week of January 2016.

Analysts expect 200,000 net new jobs were created in December of last year, if the Jobs report indicates a stronger than expected reading say in 249,000, then this could increase the mortgage rates. This is why you must consider locking your mortgage rates before the release of Job's Report. Once the report gets released it may be too late. To read more click here.

We at Peoples Privo Processing, we hope that home buyers and borrowers would lock in their rates before its too late. Peoples Privo processes loans faster with a 50 state foot print.

Mortgage market ended 2015 with a CRASH!!!

Mortgage Applications plummet in the final weeks of 2015, according to the Mortgage Application Survey released by Mortgage Bankers Association. This is most likely due to a rush on home loans in the beginning of December, before the Federal Reserve increased its funds rate for the first time in nearly a decade.

The seasonally adjusted Purchase Index decreased by 15 percent from two weeks earlier and the unadjusted Purchase Index decreased by 40 percent compared to two weeks ago. The Refinance Index decreased by 37 percent from two weeks ago and the refinance mortgage activity decreased to 55.4 percent of total mortgage applications from 56.1 percent the previous week.

This lull in the mortgage market has directly affected mortgage processors all over US. The number of files received has been pretty low. Hopefully there will be better signs of mortgage activity.

Peoples Privo Processing helps brokers and net branches process their loans faster, thereby freeing their precious time to generate more business.

To read more click here