Warm Weather Brings Out Homebuyers

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.