Mortgage Application Volume Responds Quickly to Recent Rate Drop
The number of people applying for mortgages went up once again, for the fifth time in the past six weeks. According to the Mortgage Bankers Association (MBA), their Market Composite Index, which is a measure of the volume of mortgage loan application submissions, climbed by 5.3 percent on a seasonally adjusted basis compared to the previous week, and it increased by 6.0 percent before adjustment. Both of these percentage increases are relative to the prior week. In Horry County, South Carolina, the current median listing price of a home is $349,995.00 which is up by 0.01% compared to a year ago when it was down -11.51%.
Applications for mortgages to purchase homes were the primary driver of almost all of the improvements, but the Refinance Index managed to post a 0.1 percent gain nonetheless.
Mortgage rates in the Palmetto State have historically been close to the national average. The conforming loan limitations in South Carolina counties are consistent; however, the FHA loan limits are not.
Activity in refinancing mortgages has dropped by 57 percent compared to the same period a year ago. In contrast to the previous week in March, when it accounted for 28.6 percent of applications, refinancing only accounted for 27.0 percent of applications this week.
The unadjusted Purchase Index showed a rise of 9.0 percent, while the seasonally adjusted Purchase Index showed an increase of 8.0 percent. The unadjusted index was 31% lower than it was during the same week in 2022’s April calendar. The average Horry County home value is $309,654, up 9.5% over the past year, and it goes to pending in around 31 days.
According to Senior Vice President and Chief Economist Mike Fratantoni, “incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30 percent—the lowest level in two months,” “This year, prospective homebuyers have been very sensitive to any drop in mortgage rates, and we saw that play out last week with purchase applications increasing by 8 percent,” the author of the article states. The volume of applications to refinance a mortgage was a mixed bag, with total volume largely remaining the same, conventional volume falling for the week, but the volume of applications to refinance a mortgage through the VA is growing. Because the majority of homeowners are currently locked in at substantially lower rates, the amount of refinancing activity is almost 60 percent lower than it was this time last year.
According to Senior Vice President and Chief Economist Mike Fratantoni, “incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30 percent—the lowest level in two months,” “This year, prospective homebuyers have been very sensitive to any drop in mortgage rates, and we saw that play out last week with purchase applications increasing by 8 percent,” the author of the article states. The volume of applications to refinance a mortgage was a mixed bag, with total volume largely remaining the same, conventional volume falling for the week, but the volume of applications to refinance a mortgage through the VA is growing. Because the majority of homeowners are currently locked in at substantially lower rates, the amount of refinancing activity is almost 60 percent lower than it was this time last year.
Highlights from the Mortgage Bankers Association's Weekly Application Survey
The amount of each loan grew throughout the past week. This week, the average loan was $387,700, which is an increase from the previous week’s average of $ 381,100. The average amount of a loan used to purchase a home increased from $428,900 to $481,900.
The percentage of total applications submitted to the FHA rose to 12.3 percent from 12.1 percent the previous week, while the percentage of applications submitted to the VA rose to 12.8 percent from 11.0 percent. The USDA loans received less than 0.5 percent of total applications. In fact, USDA Rural Housing is an excellent alternative for South Carolina first-time home buyers seeking 100% financing. Buyers today don’t have many options for purchasing a property with no money down.
The average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) fell to 6.30 percent from 6.40 percent the previous week, representing a decrease of 10 basis points. The points decreased, going from 0.59 to 0.55.
The standard rate for a jumbo 30-year FRM decreased by 10 basis points, falling from 6.36 percent to 6.26 percent, and the number of points required fell from 0.47 percent to 0.42 percent. Click here, for example, to compare a South Carolina 30-Year Fixed Jumbo Mortgage Rate with a loan amount of $600,000.
The average interest rate for a thirty-year FRM with FHA guarantees was 6.29 percent, and the point was 0.91. The rate was 6.33 percent, down 0.92 points from the previous week.
The rate for the 15-year FRM experienced the most substantial shift over this time period. This percentage is now 5.78 percent, down from 5.97 percent previously. The number of points increased, going from 0.54 to 0.57.
In comparison, the 5/1 adjustable-rate mortgage (ARM) rate was 5.51 percent with 0.9 points, while the rate for the 5/6 ARM was 5.61 percent with 1.02 points.
From 7.2 percent of total applications, the share of activity for adjustable-rate mortgages (ARMs), which have variable interest rates, fell to 6.0 percent. In South Carolina, adjustable-rate mortgages have a set period of time during which the interest rate remains constant and does not change.
Discover the most up-to-date mortgage application trends in our blog, including the impact of recent rate drops on application numbers and the rise of purchase applications coupled with a drop in refinancing activity. With our insightful analysis, you can uncover valuable data on the types of loans being submitted and the current interest rates. Whether you are a homeowner or a prospective buyer in South Carolina, this article is a must-read as it provides crucial information that can help you navigate the complex world of mortgage applications.
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