Loan Demand Jumps – Industry Outlook

By January 23, 2018Industry Outlook

Mortgage Rates on the Rise –According to Freddie Mac’s weekly mortgage market survey, the average fixed-rate mortgages rose for the second consecutive week. “This is the highest weekly average for the 30-year fixed-rate mortgage since May of 2017,” says Len Kiefer, Freddie Mac’s deputy chief economist. “Some may be wondering if this is the last time we’ll see a three handle on the 30-year mortgage rate. Never say never, but inflation is firming, the Federal Reserve is watching broad-based economic growth, and labor markets are tightening. This means upward pressure is building on long-term rates like the 30-year fixed-rate mortgage.”

Loan Demand JumpsThe Mortgage Bankers Association reported recently that mortgage applications for refinances and home purchases surged by 4.1 percent on a seasonally adjusted basis, even as interest rates rose. More consumers are growing concerned that the long run of record low rates may be coming to an end. As such, they’re rushing to lock in rates before any more upticks. Applications to purchase a home increased 3 percent and refinance applications rose 4 percent. Typically, refinance applications drop when interest rates rise so applications have shifted from normal patterns. 

Employers Can Now Add to Down Payments – Based on a Fannie Mae and Freddie Mac approved down payment crowdfunding platform called HomeFundMe, employers are allowed to help workers put a down payment on a home, similar to how companies contribute to a 401(k). This new program allows borrowers to crowdfund their down payment from several sources, including their employer. CMG Financial, a mortgage banking firm, created the HomeFundMe program. Employers can contribute directly to employees’ HomeFundMe accounts to help raise funds for a down payment on a home. HomeFundMe explains: “The HomeFundMe Affinity Portal allows employers to add HomeFundMe to their benefit packages, with the option to elect to match donations in any amount. Employers simply have to share the customized crowdfunding platform with employees, and HomeFundMe will provide all the materials necessary to communicate the benefit.”

Foreclosed Homes Dip to 12-Year Low – According to ATTOM Data Solutions, a real estate data firm, foreclosures hit a 12-year low in 2017, and the distressed properties remain increasingly difficult to find in many markets. Foreclosure filings in 2017, which included default notices, scheduled auctions, and bank repossessions dropped to the lowest level since 2005. This is due “to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified and lowest risk borrowers” says Daren Blomquist, senior vice president at ATTOM Data Solutions.

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