Mortgage Applications Surge on Lower Rates – Industry Outlook

By September 20, 2017Industry Outlook

Mortgage Applications Surge on Lower Rates – According to the Mortgage Bankers Association, home buyers and homeowners are taking advantage of some of the lowest interest rates in a year. Mortgage applications for refinances and home purchases jumped 9.9 percent higher recently on a seasonally adjusted basis. The 30-year fixed-rate mortgage averaged 4.03 percent, dropping from 4.06 percent the MBA reports.

More Buyers Use Co-Borrowers on Mortgages – Based on a new report released by real estate data firm ATTOM Data Solutions, more home buyers have co-signers on their mortgage loans in order to help defray the rising costs of real estate. In the second quarter of this year, 22.8 percent of mortgage applications involved a co-borrower, up from 20.5 percent a year earlier, the report shows. Dozens of programs and private companies are emerging to act as co-borrowers for consumers by offering a down payment in return for a share of equity in the home, MarketWatch reports. Family members who help with a down payment may also be considered co-borrowers. Buyers who have a co-borrower tend to buy smaller but more expensive homes, according to ATTOM Data Solutions’ analysis. They also tend to have lower interest rates and put more money down on the home, which helps avoid the need for mortgage insurance.

The Impact Immigrants Have on Real Estate – According to the National Conference of State Legislatures, 13 percent of the nation’s population, about 42 million people are from foreign countries. “Immigrants are a big driving force for housing markets across the nation,” Kusum Mundra, an economics professor at Rutgers University in Newark, N.J. “Most want the American dream, which is to own a home.” It takes an average of five to 10 years for immigrants to be able to purchase a home after arriving in the U.S., says Gary Painter, director of social policy at the University of Southern California’s Sol Price Center for Social Innovation. “Just like those born in the U.S., immigrants view home buying as putting down roots in the community,” Painter says. “On average, where immigrants are settling, property values have gone up.”

A Sign That More Housing Inventory Is Coming – Fannie Mae’s latest Home Purchase Sentiment Index shows that homeowners who have decided to stay put in their current properties may soon be ready for a move. This would help relieve the current tight housing inventory. The evidence is in, the number of consumers who say now is a good time to sell a home neared an all-time high. The index, which is a measurement based on 1,000 consumers’ attitudes toward housing, rose 1.2 points in August to a reading of 88, reflecting a year-over-year jump of 21 percentage points in the number of consumers who looked favorably on selling.

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