According to the Mortgage Bankers Association, purchase
applications have risen 3 percent last week in comparison to the previous week
on a seasonally adjusted basis. CF Funding is happy to see applications rise as
the weather has improved, allowing for more homebuyers to shop around and meet
with lending specialists. The increase
was mainly seen in conventional loans, which saw a 4.0 percent increase in
purchase applications.
Unfortunately, home purchase applications are still down 17
percent on an unadjusted basis from one year ago. Overall mortgage application
activity saw a 3.5 percent decrease from one week earlier. According to CNBC, “some
[are] still blaming the weak home sales market on rough weather in much of the
nation” and “All-cash buyers continue to represent an outsized share of the
housing market at over one- third of all sales.”
Refinances have seen a drop as interest rates rise, with an
8 percent decrease last week in comparison to the previous week. Refinances
currently cover about 54 percent of mortgage activity, which is down about 68%
from last year (when interest rates were lower). This is the lowest amount seen since April
2010. Experts predict that refinances will continue to decrease in 2014 as
rates continue to rise. According to the MBA, an increase in purchases will
make up for some of this loss, but will not completely level out the decrease. There
are many homeowners who could still benefit from a refinance this year before
rates rise, and CF Funding loan specialists can offer a free consultation for
those considering a refinance.
Average contract interest rates for a 30-year fixed mortgage
with loan balances $417,000 or less were at 4.56 percent (highest since
January), an increase from the previous week’s 4.5 percent. Average contract interest rates for a 30-year
with jumbo loan balances were at 4.45, an increase from the previous week’s
4.39 percent. Adjustable-rate mortgages saw no change last week, covering 8
percent of total applications.
Although interest rate increases may be discouraging to some
homebuyers, CF Funding urges readers to stay optimistic, as a rise in rates is
a sign of economic improvement, and allows homeowners to gain positive equity
in their homes. CF Funding hopes to see a continued increase in purchase
applications as the weather continues to improve. Those who are considering
buying a home and would like to compare loan options from multiple lenders
should contact a CF Funding loan specialist today by visiting www.cffunding.com or calling (630)328-8900.
