Mortgage Applications Skyrocket First 3 Weeks of the Year

Jan 31, 2024

🏠The demand for purchase mortgages has experienced steady growth for the third consecutive week, with an 8 percent increase in applications for home loans, according to the Mortgage Bankers Association (MBA). Homebuyers are keen on seizing the opportunity presented by the recent decline in mortgage rates, positioning themselves for the upcoming spring homebuying season.

We engaged in discussions with several regional banks, and below we share their month-to-month loan application figures.

🏦 Conrad Eberhard at Flat Branch Mortgage

January 2023 – 65 Applications and a total of 9 loan officers = 7.2 applications per LO

December 2023- 142 Applications – 18 Loan Officers = 7.8 applications per LO

January 2024 – 212 Applications – 18 Loan Officers = 11.7 applications per LO

🏦 Local Bank #2

November 2023- 23 Applications

December 2023- 26 Applications

January 2024- 56 Applications

📈Despite a slight uptick in mortgage rates the previous week, the trend of increased purchase activity persists. The surge in applications is primarily attributed to conventional and FHA purchase loans, indicating the eagerness of buyers to act swiftly this season. Conversely, refinance applications have remained relatively low as homeowners find little incentive to refinance at current rate levels.

The MBA’s weekly surveys have consistently shown an upward trajectory in demand for purchase loans throughout the year.📆 Notably, there was a 9 percent surge in applications during the week ending on January 12, followed by a 6 percent increase during the week ending on January 5.

📉Mortgage rates have stabilized at 6.69 percent for 30-year fixed-rate conforming mortgages, a quarter of a percentage point higher than the recent low recorded on December 27. Fannie Mae economists predict the potential for mortgage rates to drop below 6 percent by the end of the year, despite their revised outlook of no longer expecting a recession in 2024.

Consumer expectations regarding mortgage rates have shifted significantly, with a record number of respondents believing that rates will continue to decrease throughout the year, as revealed by a Fannie Mae survey in December. This change in expectations may lead to more homeowners listing their properties for sale this spring, no longer feeling bound by their current mortgage rates.

Investors, indicated by the CME FedWatch Tool, have adjusted their predictions, now pricing in a 53 percent chance of the Federal Reserve cutting rates on March 20, a substantial decrease from the 88 percent probability predicted in December. The possibility of rate cuts may further impact the mortgage market, creating an environment of opportunity for potential homebuyers🌐

As of the week ending on January 19, the MBA reported average rates as follows: 6.78 percent for 30-year fixed-rate conforming mortgages, representing a slight increase from the previous week’s rate of 6.75 percent. Additionally, the effective rate climbed with points rising to 0.63 from 0.62 (including the origination fee) for loans with an 80 percent loan-to-value ratio.

Rates as in 1/31/2024

National Averages:

Conventional 6.75%

Government 6.05%

Gershman:

Conventional 20% Down

6.625%

FHA

3.5% Down

5.875%

Rates brought to you by Amber Moser with Gershman Mortgage

Disclaimer:

Rates are subject to change based on current market conditions. Rates based on 780 FICO score.

16253 Swingley Ridge Road, Suite 200, Chesterfield, MO 63017. NMLS ID# 138063.(800) 457-2357. This is for informational purposes only and not an offer to lend or extend credit. Subject to credit and income approval. Terms and conditions are subject to change pending agency and investor guidelines.

 

Resource: Inman