The amount of home mortgage applications decreased for the third straight week, paced by a 5% drop in mortgage refinance applications. Overall total application volume was down 2.5% from the week prior. The main issue with application volume right now continues to be the low inventory levels pushing up home prices and discouraging some buyers from entering the market. Should inventory catch up to demand, home mortgage purchase applications should rebound as well.

 

• The FHA share of total mortgage applications remained at 11.7% this past week seeing almost no change.
• The VA share of total mortgage applications decreased to 9.8% from 10.3% the previous week.

Being a first time homebuyer may seem like a daunting situation, but these tips on things to avoid could make your life much more stress free.

1. Not having home insurance prepared: The lender will require you to have an insurance policy in effect the day of your closing. Forgetting to have your insurance ready will delay your closing.
2. Lower than necessary appraisals: If your appraisal comes in lower than your offer, it could be the reason you don’t receive funding to close. You’ll have to cover the difference in value to purchase price, negotiate with the seller, or be forced to back out of the deal.
3. Credit problems: Lenders will re-check your credit prior to close. Opening new credit accounts or making large credit purchases prior to close could ruin your chances of closing.
4. Homebuyer loan document issues: Make sure to check your loan documents for mistakes. If your name is misspelled or other things are incorrect, notify a loan officer as soon as you can.
5. Last minute walk through problems: Make sure to be proactive on your final walk through. If anything is in lesser condition than discussed, try to fix this as soon as possible to avoid delay.

According to the end of 2020 census, home prices in December increased 10.4% year-over-year from 2019. In November a similar gain was experienced, with home prices rising 9.5% in 2020 when compared to 2019. Last year started in a way that almost no one expected, but low interest rates allowed more homebuyers across the country to enter the housing market, shortening inventory, and causing a surplus of demand in the market. As inventory remains low this far into 2021, demand will continue to outweigh supply and home prices should remain high. While this comes as no surprise given the extremely hot housing market nationwide, this leads to the question of exactly how much higher home prices can go.

Last week mortgage application volume jumped 8.15% from the week prior. The previous two weeks application volume saw decreases after starting the year strong. Refinance volume was the highest, up 11% from the previous week, reaching the highest level since March 2020. This level of refinance activity was 59% higher than this time last year.

 

• The FHA share of mortgage application volume went down to 9.1% from 9.4% the previous week.
• The VA share of mortgage application volume went down also, dropping from 12.4% to 12.1% this week.

For the second week in a row, home mortgage application volume was down. Last week mortgage application volume dropped 4.1% despite being up 83% year-over-year. The second consecutive week of application volume decreases comes as mortgage rates see a slight uptick to close January.

 

• The FHA’s share of mortgage application volume increased to 9.4% from 9.3% the previous week.
• The VA’s share of mortgage applications decreased tp 12.4% from 13.8% the previous week.

Home mortgage application volume dipped 1.9% this past week after jumping 16.7% week-over-week the period prior. This dip was paced by a 5% drop in refinance activity. Despite last weeks slight drop, as the start to 2021 continues, we should see strong mortgage application numbers for both first time and repeat home buyers.

 

• FHA’s share of mortgage application volume decreased to 9.3% of total application volume this past week.
• VA’s share of mortgage application volume increased to 15.8% of total application volume during the same period.