Mortgage Bankers Association

Rising purchase activity countered falling refinances, as declining interest rates helped bring some aspiring buyers to market, the Mortgage Bankers Association said.

Loan activity overall came in higher for the second week in a row, with interest rates flattened following an extended volatile period, the Mortgage Bankers Association said.

But the industry will still have to go through some pain in 2024, Wharton Professor Susan Wachter told attendees at the Mortgage Bankers Association annual convention.

Loan activity fell for a second consecutive week, dropping to levels last seen in 1996, as a potential government shutdown loomed.

Purchase-loan activity dropped again to its most subdued level in close to three decades, while refinances saw their smallest numbers in eight months, according to the Mortgage Bankers Association.

While a majority of current forborne borrowers sought relief for reasons related to COVID-19, servicers are seeing a growing share of cases involving natural disasters or personal financial issues, the Mortgage Bankers Association said.

The Mortgage Bankers Association attributes this to muted demand for home purchases and companies trimming their operations.

Both loan volumes and interest rates came in mostly flat, but the jumbo average ran ahead of the conforming for the second week in a row, the Mortgage Bankers Association said.

The investor segment will have to be mindful as it gains ground, executives said Tuesday, noting that the sector takes experience, skill and savvy awareness of risks.

The Mortgage Bankers Association sees the likelihood of a rise in sales activity later this year based on recent construction trends, in a turnaround from the 2022 market.

Meanwhile, the average purchase loan amount surged to its highest level in 2023, showing signs of continued demand amid limited inventory.

Conventional and government-backed purchases both increased last week, even with a 12 basis point surge in the 30-year conforming average, the Mortgage Bankers Association said.

But overall availability still remained near a 10-year low in March, with government-backed products falling for the third time in four months, the Mortgage Bankers Association found.

The falloff in government-backed applications outpaced the overall decline, with volume down by over 8%, the Mortgage Bankers Association said.

The increase in federally backed loan activity helped drive overall volumes upward for the first time since early February, even as interest rates jumped again, according to the Mortgage Bankers Association.

A week after it dropped to a 28-year low, purchase activity decreased again by over 5%, according to the Mortgage Bankers Association.

Volumes fell 18% compared to the previous week, while refinance activity also pulled back.

Higher interest rates helped drive down refinances by 87% and purchases by 42% compared to last year.

The decline in loan activity and softening prices also helped drive down builder sentiment for the 11th month in a row.

Ongoing weakness in housing markets and the economy has now driven purchase activity to its lowest level since 2015, while overall application numbers decreased for the 10th time in 11 weeks.