According to the Mortgage Bankers Association, mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 16, 2017.
The Refinance Index increased 2 percent from the previous week to its highest level since November 2016. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.13 percent from 4.14 percent, with points increasing to 0.35 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Unadjusted mortgage purchase applications continued their upward trend since 2014.
Mortgage purchase applications continue to be relatively lower (by bubble standards) thanks to the curtailment of low credit score lending.
With mortgage rates generally trending upwards, we shall see how this plays out.
While the US stock market has been on an unprecedented bull market run (thanks in part to The Federal Reserve), the US housing market has only been on a bull run since February 2012.
But housing starts (particularly the single-family detached market) have been slow to come back after the disastrous overbuilding during the housing bubble years. In fact, 1 unit housing starts are back to 1990-1991 recession levels. Despite staggering Federal Reserve stimulus.
The May housing starts numbers were released and they continue to show slow going for housing starts. Housing starts declined 5.54% MoM from April to June, not what was expected by housing cheerleaders. 1-unit starts fell 3.87% MoM.
5+ unit (multifamily) starts fell almost 10% from April to March. Particularly since the huge surge in June 2015.
Fed rate hikes have consequences.
Building permits way out west fell a whopping 13%!
The National Association of Homebuilders (NAHB) released their monthly Market Index reflecting the sentiment of their members. Above 50 means that more members than not are optimistic.
Note that homebuilder optimism has been above 50 (for the most part) since June 2013. Homebuilders can thank The Fed for insanely low borrowing costs that greatly improved their mood. Builders can build single family detached houses and/or 5+ unit multifamily, so super low interest rates improve every builders’ mood. So the decline in the number of subprime borrowers getting mortgage originations is good news for multifamily builders but not so good for detached housing.
But for existing homeowners, candidates for refinancing are far fewer than they were even in 2016, according to Black Knight.
This helps explain the declining residential loan origination trend for both purchase and refis.
Inventories of existing homes are scarce and getting scarcer by the month. This helps drive up home prices, not good for folks currently renting and wanting to buy.
Tight inventory, interest rate increases, declining mortgage refis. Well, at least mortgage purchase applications are back to 1997 levels.
Yellen: I honestly thought that mortgage applications and refis would be higher given the trillions of dollars of stimulus we threw at it.
New York City, composed resrticted land masses such as Manhattan, Brooklyn and Staten Island, has the most expensive housing rents in the nation followed by another restricted land mass known as San Francisco.
Boston, of course, is located on the Atlantic Ocean and like New York City and San Francisco is massively congested.
On the flip side, Wichita KS has the lowest rents, followed by Decauter AL and Memphis TN. These cities are all in “fly-over” states and not on an oceanic coast. Ohio makes the list with Toledo OH and Oregon OH (next to Toledo). Apparently, few are willing to pay a Lake Erie premium.
New York City, San Francisco and Boston stick out like the proverbial sore thumb on a map of average rent.
Limited available space for construction of new housing supply and restrictions on land use are major drivers of rents. Of course, people and businesses are an important element in rent determination on the demand side. And environmental concerns can limit supply as well, such as in Phoenix AZ.