We deliver the absolute best lending experience through knowledge, communication, and passion for the home ownership experience.
Login to My Portal
At Groves Capital we deliver the absolute best lending experience through knowledge, communication, and passion for the home ownership experience.
Our mission supports the growth and strength of our communities and provides a pathway to the dream of home ownership.
Mortgage applications rose slightly for the second week, driven by an increase in refinancing. The Mortgage Bankers Association (MBA) said its Market Composite Index for the week ended August 5 increased 0.2 percent on a seasonally adjusted basis. The Refinance Index was up 3.5 percent from the previous week, its largest gain since early June, but was 82 percent lower than the same week in 2021 . Refinance applications constituted to 32.0 percent of the total received during the week. The share was 30.8 percent the prior week. [refiappschart] Purchase applications declined 1 percent week-over-week on a seasonally adjusted bases and 2 percent before adjustment. That index was 19 percent lower than the same week one year ago. [purchaseappschart] “Mortgage rates remained volatile last week – after drops in the previous two weeks, mortgage rates ended up rising four basis points. Mortgage applications were relatively flat, with a decline in purchase activity offset by an increase in refinance applications,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The purchase market continues to experience a slowdown, despite the strong job market. Activity has now fallen in five of the last six weeks, as buyers remain on the sidelines due to still-challenging affordability conditions and doubts about the strength of the economy .” Added Kan, “Refinance applications increased over three percent but remained more than 80 percent lower than a year ago in this higher rate environment.”
It will be a few weeks before we get the next installment of the bellwether home price indices (Case Shiller and FHFA), but today's Mortgage Monitor from Black Knight has an earlier look at June's results. Much like FHFA and Case Shiller, Black Knight's data for May had shown year-over-year appreciation that still looked reluctant to move too far under 20%. 19.3% was the official tally (Case Shiller was still over 20% and FHFA had fallen to 18.3%). Today's release shows a much sharper deceleration in June with the annual pace falling to 17.3%. While that's by far and away the largest decline since record-keeping began in the 1970s, there is at least one incredibly important caveat. Simply put, the price growth leading up to these declines also set records. As such, any remotely quick return to normalcy will end up producing huge declines. Moreover, let's not overlook the fact that 17.3% is still a staggeringly high year-over-year appreciation rate. It didn't even break above 15% during the housing boom in the mid 2000s that contributed to the financial crisis. Of course this is just the national average. Results vary widely by metro area, with several already more than 10% off their recent peak annual growth rate. The price decline speaks to the broader issues of affordability, both due to rampant post-pandemic appreciation and the abrupt surge toward higher mortgage rates in 2022. The net affect, unsurprisingly, is noticeable shift in inventory levels in certain metro areas. Some are back to 2017-2019 levels while the national average is still down more than 50%.
Mortgage application activity rose last week, reversing a series of declines that started in late June. The increase was modest; the Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, ticked up 1.2 percent on a seasonally adjusted basis, but both purchasing and refinancing volumes moved higher. On an unadjusted basis, the Composite Index increased 1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week, although it was still 82 percent lower than the same week one year ago. The share of applications that were for refinancing grew to 30.8 percent from 30.7 percent the previous week. The Purchase Index rose 1 percent both before and after seasonal adjustment. The unadjusted index was 16 percent lower than the same week one year ago. “Mortgage rates declined last week following another announcement of tighter monetary policy from the Federal Reserve, with the likelihood of more rate hikes to come,” according to Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Treasury yields dropped as a result, as investors continue to expect a weaker macroeconomic environment in the coming months. The 30-year fixed rate saw the largest weekly decline since 2020, falling 31 basis points to 5.43 percent. The drop in rates led to increases in both refinance and purchase applications, but compared to a year ago, activity is still depressed. Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity.”