All Posts Tagged: 30-year fixed mortgage

Numbers Count: Weekly mortgage data highlights

Karen Mayfield
Mortgage Banking

Numbers do count to us as 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: New home purchase applications up

Young couple carrying boxes through the front door.Mortgage applications for new home purchases increased by 5% in April from the previous month, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey data released May 12. The average loan size of new homes increased from $296,428 in March to $299,094 in April.

What counts: A rise in mortgage applications for new home sales is welcome amid growing concerns from Bank of the West Chief Economist Scott Anderson and others that the housing market was entering a rough patch. Frequently, new homes are sold to move-up buyers, which adds inventory in the existing home market for first-time buyers and others. Weather issues in many parts of the country delayed the start of spring buying season, so these numbers may indicate the buying season is finally picking up.

The numbers: Interest rates drop

The average interest rate last week for 30-year fixed-rate mortgages with conforming loan balances dropped to 4.3%, the lowest rate since November 2013, from 4.43% the prior week, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 9. Average rates also fell for 5/1 adjustable rate mortgages, 15-year fixed-rate mortgages and 30-year FHA mortgages. Average jumbo rates remained unchanged at 4.29%

What counts: Rates are down, and that’s good for both buyers and homeowners considering refinancing. If you are in a position to lock your rate on a mortgage, consider this sample calculation. Average rates on 30-year fixed-rate mortgages started this year at 4.72%. On a $200,000 30-year fixed-rate mortgage, the current rate of 4.3% compared to 4.72% would save a borrower $50 a month.

Similarly, homeowners on the fence about refinancing a mortgage should at least talk to a lender, given where rates are now and the rise last year in home values that gave many homeowners added equity in their property.

The average mortgage interest rate reduction in the first quarter was about 1.4 percentage points — or a savings of about 24%. On a $200,000 loan, that translates into interest savings of about $2,800 during the next 12 months. Freddie Mac estimated recently that in the first quarter, $6.5 billion in net home equity was cashed out during the refinancing of home mortgages.

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