The Federal Housing Finance Agency announced the maximum conforming loan limits for mortgages would be increasing in 2021. The new loan limits for one-unit properties will be $548,250, increasing from the 2020 limit of $510,400. The Housing and Economic Recovery Act (HERA) requires that the baseline confirming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the average U.S. home price. According to the seasonally adjusted Housing Price Index, home prices increased 7.42% between the third quarters of 2019 and 2020, therefore the conforming loan limit will increase the same amount. Areas of the country in which 115% of the local median home value exceeds the baseline CLL, the maximum loan limit will be higher than the baseline loan limit. HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling” on that limit of 150% of the baseline loan limit.

After two weeks of small decreases, the mortgage application numbers have increased 3.9% over the past week according to a report from the Mortgage Bankers Association. The refinance application volume jumped even higher, hitting a 5% increase last week and is now up 79% over last year’s totals from the same week. Refinances are now making up 71.1% of total mortgage applications. This week continued the over six month period of purchase activity being up over the same time last year.

Total home mortgage application volume dipped 0.5% last week after a 3.8% jump to end October according to a report from the Mortgage Bankers Association. However, the refinance volume increased by 1% from the previous week and is over 67% higher than this time in 2019. This 1% week-over-week increase is the highest increase in refinance applications since August of this year. Homebuying demand in total is up over 16% from last year, and would likely be even higher should more available homes be listed for sale to decrease competition.

 

• The FHA’s share of mortgage applications fell to 10.6% from 11.1%.
• The VA share of applications increased to 12.6% from 12.2%.

With home mortgage rates continuing to hover near record lows, mortgage application volume jumped 3.8% last week according to a report from the Mortgage Bankers Association. Refinance activity rose 6% from the previous week marking a level over 88% than this time last year. Refinance share’s of the application volume accounted for 68.7% of total applications this past week  while we saw a small dip in purchase applications, falling 1%. Purchase applications are still 25% higher than the same week a year ago.

 

• The FHA’s share of applications fell to 11.1% from 11.7%.
• The VA share of applications increased to 12.2% from 11.4%.

After two weeks of slight declines, mortgage applications regained their footing last week, rising 1.7% from the previous week. The refinance numbers led this rebound by increasing over 3% from the week prior. Refinances are now making up 66.7% of mortgage application volume. Purchase applications rose only 0.2% this past week, but remained 24% higher than this time last year.

 

• The FHA’s share of mortgage applications fell to 11.7% from 11.8%.
• The VA share of applications fell to 11.4% from 12.6%.

Mortgage application volume stayed relatively stagnant this week but did see a small decrease, down 0.7% from the week prior according to a report from the Mortgage Bankers Association. After hitting their highest levels since mid-August the week before, refinance volume experienced a slight 0.3% decrease this past week, but still remained 44% higher than this time last year. Almost 2/3 of home mortgage loan applications were for refinances in this last seven days.

 

• The FHA’s share of mortgage applications fell to 10.7% from 11%.
• The VA share of applications rose to 13.4% rom 12.2%.

After falling 4.8% the week prior, mortgage applications numbers have almost completely rebounded last week, gaining 4.6% according to a report from the Mortgage Bankers Association. Numbers in the refinance market also rose 8% hitting its highest levels since the middle of August, while making up 65.4% of total mortgage applications. Year-over-year purchase applications are un 21% marking the 20th straight week of year-over-year gains.

 

• The FHA’s share of mortgage applications fell to 11% from 11.4%.
• The VA share of applications rose to 12.2% from 11.9%.

Despite the economic roller coaster of 2020, home prices have continued to rise this year. With home mortgage rates at all-time lows, more buyers have entered the market creating competition for a low inventory of homes. While home prices rising during an economic downturn is not unusual, the house price appreciation we’ve seen this year is more dramatic than during any economic decline in the recent past. As sellers become worried about lower prices, they take their homes off market causing a decrease in supply, creating a shortage. This shortage will in turn cause prices to rise as buyers compete for limited inventory. If home mortgage rates continue to remain low, more buyers will enter the housing market to compete for the small amount of homes currently available driving up home prices even further. This raises the question, will some buyers be priced out of the market?