Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday.
- Mortgage rates are back up, reversing last week’s dip! The average rate of a 30-year mortgage rose to 5.5% this week, the highest level since June, and almost twice the rate of one year ago. After years of low rates, a reversal began earlier this year when the Fed started lifting interest rates—which indirectly impact mortgage rates—in an attempt to rein in inflation.
- As one might expect, as rates rose to the highest level in two months, demand for mortgages has weakened, since higher rates add hundreds of dollars or more to the monthly cost of owning a home. CNBC reports that overall mortgage applications dropped 1% last week compared to the previous week. But, government mortgage applications increased 4%, “which is potentially a sign of more first-time homebuyer activity,” said Joel Kan, a Mortgage Bankers Association (MBA) economist.
- One small step for Homepoint could be one large step toward improving home affordability. At least that’s the plan as Mortgage Professional America (MPA) reported that the lender announced that it’s cutting the price of its conforming conventional loans by 75 basis points for U.S. buyers in certain zip codes in 20 states based on the high percentage of loans issued to people below the Area Median Income (AMI).
- And the decline in refis continues! In its 2022 U.S. Residential Property Mortgage Origination Report, ATTOM found that the dwindling refinance mortgage market saw activity plummet by nearly 36% in the second quarter as rates rose to nearly 6%. The Q2 drop outpaced increases in home purchases and home-equity lending. Total mortgages also dropped 13% between the first quarter of 2022 and the second.
- Homeowners, particularly those locked in at high rates, wary of refinancing should consider loan recasting, which might be a better option, writes the US News & World Report. The recast will “naturally lower your payments, and you won’t need a new loan with new terms.”
- Lastly, the GI Bill continues to fail Native American veterans interested in homeownership, according to NPR. This is because “banks won’t finance a GI bill home loan on tribal land” because they have no collateral—the ability to repossess the property—if the loan defaults. The Native American Direct Loan was created 30 years ago as a workaround, but, according to a new report, it has only been used 89 times in the past decade.