Numbers Count: Weekly mortgage data highlights

Chad Royle
Posted by Chad Royle
Mortgage Banking

Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: Big surge for mortgage applications

Agent reviewing floor plans with a male-female couple.Mortgage applications shot through the roof in the first week of January — rising 49% from the week before, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey published Jan. 14. It was the biggest weekly gain in mortgage applications since 2008. Purchase applications jumped 24% from the prior week, and refinance applications soared 66%, according to the report. The average interest rate for 30-year fixed-rate conforming mortgages fell from 4.01% the prior week to 3.89%, the lowest level since May 2013.

What counts: We see an unusual convergence of economic strength and falling interest rates. This is great news for consumers looking to save money on housing costs. Low rates can make homeownership more affordable, and the 24% increase in purchase applications suggests prospective home buyers are taking advantage of these low rates.

Similarly, low rates may provide an opportunity for homeowners to lower their mortgage payments by refinancing. As general guidance and depending on how long you have left on your loan term, if rates are half a percentage point lower than the rate on your current mortgage, you may want to talk to a lender about refinancing.

The numbers: Negative equity decreased in Q3

The number of borrowers who owed more on their homes than their properties were worth fell in the third quarter to 5.1 million from 5.4 million in the second quarter, according to the latest CoreLogic Equity Report released Jan. 8. Of homes with a mortgage, 10.3% had negative equity in the third quarter, the report found.

What counts: That’s 300,000 more homeowners who may now be able to take advantage of the current low rates to refinance their mortgage, perhaps get a home equity line of credit, or sell their homes without losing money to buy another home or to relocate. The report is a reminder to those who have been underwater on their mortgage in the past to take another look at their home’s value.

Rising home prices have helped more than 4 million underwater homeowners return to positive equity in the past two years, according to CoreLogic’s data. Homeowners who could not qualify to refinance in the past or for a home equity loan or line of credit may be surprised to find they now do have enough equity to refinance or take out a home equity line.

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