Tag Archives: Refinance

Refinance volumes dropped in the first quarter to a post-recession low, according to stats released by the Federal Housing Finance Agency (FHFA). Meanwhile, the share of refinances done through the Home Affordable Refinance Program (HARP) continued to pull back, slipping to about 21 percent of total activity.

The refinance side of the mortgage market saw yet another pickup in application activity in mid-May, boosting total volumes for the third straight week. Mike Fratantoni, MBA's chief economist, said the recent downward trend in mortgage rates—which hit a six-month low last week—has helped push up demand for loans.

In its Weekly Mortgage Applications Survey, the Mortgage Bankers Association (MBA) reported a 3.6 percent rise in application volumes for the week ending May 9. In a significant turn from recent trends, refinances were entirely responsible for the bump in overall applications. Still, refinance application numbers remain down nearly 80 percent compared to last year.

According to monthly application data released by the Mortgage Bankers Association and compiled by Capital Economics, total application activity in April was down 4.8 percent month-over-month, slipping further from March’s 2.9 percent decline. The entirety of the decline came from another drop in refinance application volumes, which were down 10.8 percent over the month, the biggest drop so far this year.

According to Freddie Mac's latest report, 39 percent of refinancers last quarter chose to shorten their term, up slightly over the prior quarter and the highest share since 1992. Meanwhile, the share of borrowers extracting home equity stayed relatively low. Together, the two stats suggest borrowers are seeking to strengthen their own equity positions as home values continue to rise, the company says.

The Mortgage Bankers Association’s (MBA) measure of mortgage application volume saw another decline last week, driving applications down further to their lowest level since the start of the new millennium. “Both purchase and refinance activity fell last week, and the market composite index is at its lowest level since December 2000,” said MBA chief economist Mike Fratantoni.

Even a slight drop in mortgage rates did both bolster February refinances through the Home Affordable Refinance Program (HARP), the Federal Housing Finance Agency (FHFA) reported. Representing 21 percent of all refinances the GSEs completed in February, 26,964 HARP refinances were completed over the month, according to the FHFA's latest Refinance Report.

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, mortgage applications declined in the last week, though loan sizes are seeing record highs. Meanwhile, the average loan size for purchase applications has reached its highest level in the history of the survey at $280,500, coinciding with the trend in rising purchase activity for larger loan amounts.

A weaker-than-expected first quarter has researchers at Fannie Mae amending their forecast for growth in 2014, but they still project acceleration as the year progresses. “The April economic forecast is similar to February and March, where slow growth has been the common denominator, but we expect to see a slight pickup beginning this quarter,” explained Doug Duncan, chief economist at Fannie Mae.

Lenders closed on a greater share of mortgages last month compared to February—and they did it at a faster pace, according to mortgage software provider Ellie Mae. The company’s latest Origination Insight Report, released this week, shows that out of a sampling of loan applications initiated 90 days prior to March, 58 percent closed last month. That rate is up from 55.3 percent in February and from the 2013 average of 54 percent.