Latest Mortgage Applications Data

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the latest mortgage applications data.

  • No surprise. Mortgage applications for refinances are collapsing with a rise in mortgage rates. They fell 16 percent in one week and are down 43 percent from this time last year.
  • Mortgage applications to buy a home, however, are holding their ground despite the higher interest rates. Though down slightly from the prior week, they are up 11 percent from one year ago. The increased consumer confidence about home buying is simply too strong at the moment to be neutered by higher rates.
  • Expect further steep declines in refinance activity. If mortgage rates rise by another 50 basis points – from current 4.5% to 5.0% – then expect a slide in home buying in coastal regions of the country where home prices are very high. In the vast middle of the country and in the South, the rise in mortgage payments will be slight and will therefore not be a big hindrance to home buying.
  • One positive of falling refinance activity is that mortgage brokers and banks will now increase staffing resources to process home purchase applications. Last year when mortgage rates were at unimaginable lows, significant resources had to be dedicated to refis. Now those resources can be redeployed to process home purchase applications. Your home buyer should get quicker responses now. Moreover, commercial loans may also receive their due diligence, rather than being ignored, even though regulatory compliance remains quite burdensome for these type of construction and commercial real estate investment loans.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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  1. Housing Inflation coming on 2 fronts, with weak income growth and a lot new jobs being low paying jobs…. you will have a DTI problem coming down the line.

    Rates are still low enough to keep the 70% of the mortgage buyers going. However, laws of math are simple. With Mini Bubble home price action and rising interest rates you’re slowly taking buyers out of the system.

    You will really see the demand hit around 5.875%-6.375% range with home prices rising double digits

    My Interview on Bloomberg Financial recently on the impact of rising rates on the housing market

  2. 10 year note 2.72% after job report that shows the expansion for Bartenders is still strong.
    Agency Jumbo pricing 5%…

    DTI… Debt to income… if the cycle is lowing paying jobs then housing inflation.. 2 fronts… OUCH

    Remember your “stuck” comment a few months ago Mr. Yun