Home mortgage loan applications fell 2% in the last week according to the newest report from the Mortgage Bankers Association, marking the third consecutive week of declines. The refinance index fell 3% last week, but remained 40% higher year-over-year. Purchase applications for home mortgages fell 0.2% from last week, but still saw a 28% year-over-year increase from last year marking the 15th week in a row of year-over-year gains.

• The FHA’s share of mortgage applications fell from 10.5% to 10.2%.
• The VA share of applications fell to 11.4% from 11.8%.

The process of home buying is ever changing as time passes and technology grows. One way the process has differed in recent years is buying homes essentially “sight unseen”. According to a study by Redfin, nearly 45% of people bought a home in the past year by making an offer on a home they had not toured in person. The amount of people buying a home without touring it in person is up 28% year-to-year from 2019. Below are some things to consider in regards to today’s new home buying process.

• Picking the right agent is even more important now. Having an agent who understands your tastes, preferences, and needs makes finding the right property easier for you. They will act as your eyes and ears in the buying process, so they need to understand what is important to you!
• Request the most in-depth video tour possible. In addition, having the measurements and floor plan available to you during the video tour will help you get a better feel for each room.
• Sellers may be biased against buyers who haven’t toured in person. When it comes time to make an offer, it’s important a buyer who never toured the home in person puts their best foot forward. Choosing a local mortgage lender, confirms the loan officer or client should be easily accessible by the seller’s agent should any questions arise.

Home mortgage application volume fell 3.3% last week after seeing a small spike in interest rates according to a report from the Mortgage Bankers Association. The refinance application volume fell 5% from the previous week also. Year-to-year the refinance application volume was still 38% higher than last year marking the thirteenth straight week of year-over-year gains. According to this report, the refinance share made up 64.6% of the mortgage activity in the last week. Overall the housing market remains a bright spot in the current economic activity. Housing supply could be increasing as well to better meet the strong demand for buying a home.

The forbearance rate for mortgages backed by Fannie Mae and Freddie Mac dropped 4.94% in the first week of August. The forbearance rate is now at 7.21%, representing 3.6 million mortgages in forbearance. Economists are watching to see what impact the July 31st expiration of the $600 a week enhanced unemployment benefits will have on the forbearance numbers. Although short term forbearance numbers may be lowering, with more time we should see a clearer picture of the true forbearance levels without the aid of the CARES Act.

As home mortgage interest rates and housing inventory continue to hit record lows, potential homebuyers are facing an increasingly competitive environment. According to Redfin more than half of the offers tracked in July faced competition. Homes priced between $400,000 and $500,000 were the most likely to be in a bidding war with over 55% of these homes facing a multiple offer situation. In the market for homes listed over $1.5 million, 46% of them received multiple offers in the month of July. As the already low home mortgage interest rates continue to drop, more homeowners will face competition for the median priced homes on the market. Being pre-approved and ready to put an offer on a home could make the difference in your offer being accepted or giving competition a chance to beat you to it!

https://www.redfin.com/news/june-2020-real-estate-bidding-wars-increase/

 

 

Despite historically low home mortgage loan interest rates, mortgage applications fell 5.1% last week according to the Mortgage Bankers Association. The refinance index fell 7% from one week earlier, but is still 84% higher than the same time last year. This week marked 11 straight weeks of year-over-year refinance activity growth. Mortgage refinance levels will continue to be high as people seek to lower their monthly mortgage payments in this uncertain time.

When discussing the mortgage and real estate markets, forecasting is very important. With today’s very uncertain future there are a few things regarding these markets we may be able to predict to take advantage of buying conditions.

1. Homes may be harder to find for buyers. Inventory has been low in 2020 and with 20% fewer existing homes for sale in May 2020 than May 2019, one could expect this trend to continue. Sellers may be uneasy opening their homes for open houses and prospective buyers.
2. Lack of affordability may hold back home sales. Resale home sales are up 30% year over year. The scarcity level of homes in the entry level-priced market has continued into the middle of the year causing first-time buyers to have less choice in options available to their budget.
3. Refinances levels continue to boom. Low mortgage rates make now a great time for home owners to refinance and this trend should continue as rates stay low throughout the end of 2020.

In the Blue Water Navy Vietnam Veterans Act passed by Congress last year, benefits to Navy veterans exposed to Agent Orange during the Vietnam War were provided. In the small print of the deal, it was written that the funding for these benefits would come from raising the fees on mortgages backed by the Veteran’s Administration. This fee hike in last year’s bill temporarily raised the VA mortgage funding fee from 2.15% to 2.3% for first-time buyers and from 3.3% to 3.6% for repeat buyers through January 1st, 2021. Since most veterans roll their fee into their loans, they are paying off their now higher fees with interest over the course of their loans. For now the attempt to have active-duty military and veterans pay for the benefits for other current or former members of the armed forces has been derailed thanks to an amendment by Kansas Senator Jerry Moran. His bill to provide funds to adapt housing for disabled vets was approved by Congress recently. Time will tell the final effects the Blue Water Navy Vietnam Veterans Act and any possible amendments will have on current and former armed services housing.

If you’re in the market to buy a home this Summer you’ll need to be careful navigating this uncertain time. In this high demand homebuying market, here are a few thing you may want to consider.

Know your market: On average, home prices jump 9% from January to June according to a new analysis from NerdWallet. Generally the inventory in this period is higher as well, but with the hot housing market this years inventory may be lower.

Get preapproved: Your credit score, debt-to-income ratio, and down payment will all factor into whether you get a home loan with favorable rates. Putting in an offer on a home with a lender’s preapproval may set you apart from other offers.

Prepare to be flexible: Between the increased mandates both state and nation wide and the need to keep all parties healthy during this unique time, being flexible in how you see the homes you’re looking at is important.

Determine where you’re willing to compromise: Supply for the housing market was tight to start 2020 and so far this year demand has outweighed additional supply. Going into this process knowing what you’re willing to compromise on will ensure you don’t miss a chance to submit an offer.

Consider waiting: Postponing your home purchase can be disappointing but depending on where you’re shopping, waiting could get you a lower price with less competition and increased financial security. Increasing your confidence in your decision by thinking everything through will make you feel more comfortable in any purchase you make!

For the ninth straight week the number of mortgage loan applications has climbed. In the last calendar week, the number of applications for home mortgage loans has risen 4.1% according to the Mortgage Bankers Association. Part of the rise in home mortgage loan numbers is the rise in the refinance rate (5%) over last week’s numbers. This 5% gain also represents a 112% increase in the refinance levels year-over-year. The share of home mortgage loan applications dedicated to refinances also saw a slight gain from 64.2% to 64.8% of total application volume. Some more detailed information regarding this week’s application data is as follows:

• FHA’s share of mortgage applications fell this week to 10.8% from 11.1%
• VA’s share of applications fell to 10.8% from 11%

There appears to still be high buyer demand in the market moving into the end of the summer.