The volume of applications to secure a purchase mortgage loan for a home in the U.S. ticked up 9 percent in the absolute last week, representing a 7 percent increase on a seasonally adjusted basis from a 28-year low.
That being said, purchase mortgage activity was still down over 40 percent on a year-over-year basis, as are pending home sales in San Francisco proper. And according to the Mortgage Bankers Association, “borrowers are waiting on the sidelines for rates to come back down,” despite the fact that the Fed is now laying the groundwork for a prolonged period of higher rates and the futures market concurs, none of which should catch any plugged-in readers, other than the most obstinate, by surprise.
or maybe buyers were waiting for rates to come back down and now they are being told they are not, so they all jump in. “Buy now or be rated out forever”?
Buyers are betting on refinancing a few months or years down the line. Not sure if that’s a winning strategy but basically tons of buyers have been unable to buy in the last couple of years that they think now is the time even if rates are high. That’s my take at least.
From last month, In this volatile housing market, here’s how to know when the bottom is in, 13th ‘graph:
I think Ms. Evangelou will be surprised when those mortgages at around 5.75 percent do not arrive in the second quarter, but perhaps she means after The Fed reaches its terminal rate.
And of course the difference in rates between when you purchase now and at a future date needs to be sufficiently large in order to make refinancing worth the fees and headache you’ll be signing yourself up for.
Not so. Wells Fargo had a 5.75% 30 year jumbo as of Friday morning. Then later on that day the 10 year yield had its biggest drop in like 20 years or something.
Granted. I think, however, that both of those are short-term reactions to the news. Just before posting this the futures market is pricing in a 48 percent probability that the Fed won’t raise the fed funds rate at all during the March FOMC meeting.
Just got an email this morning. Wells is now down to 5.5 % for 30 year jumbos. Can we possibly see the 4’s again? That would have seemed impossible two months ago.
I wonder if the collapse of SVB will affect properly values in the Bay Area?
Or rather is the collapse of SVB an effect from a common cause of economic weakness that will also affect property values. I’m sure more details will come out, but it appears that a combination of cash burn by tech companies and a weakness in the value of MBS (mortgages securities) assets is what did SVB in.
‘At the end of 2022, SVB estimated that almost 96 per cent of its $173.1bn in deposits exceeded or were not covered by FDIC insurance”
https://www.ft.com/content/6943e05b-6b0d-4f67-9a35-9664fb456504
Yes: think of the realtors!!!
SVB’s going to reopen on Monday under control by their regulator. The startups that had their operating capital on deposit there in amounts exceeding the FDIC insurance level and didn’t get in before the close on Friday had better hope that they are going to be able to gain access to all of their funds, because if they can’t meet payroll from other sources they’re going to layoff employees and to the extent those at-risk employees own real estate or were in the market to purchase, that will have the obvious knock-on effect on property values in the Bay Area. We’ll have to wait and see about the severity.
UPDATE: With the benchmark 30-year mortgage rate still hovering around 6.5 percent, despite last week’s banking kerfuffle, purchase mortgage application volume ticked up 2 percent on a seasonally adjusted basis. And as such, purchase mortgage activity in the U.S. was only 36 percent lower than at the same time last year.