Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday afternoon.
- According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association, mortgage applications decreased the week of September 2, 2022, by 0.8%, compared to last week’s 3.7% drop.
- The Mortgage Refinance Index decreased 1% from the previous week and was 83% lower than the same week in 2021.
- Year-over-year mortgage rates are 3% lower than in 2021, while mortgage applications are 23% lower.
- The MBA’s overall Market Composite Index sits at its lowest level in 22 years.
- The rate of 30-year fixed-rate mortgages currently sits at 5.89%. This is 2.5 percentage points higher than the beginning of 2022 when rates sat at 3.22%, and are the highest rates since 2008.
- The Federal Reserve’s spiking of interest rates and ongoing efforts against inflation is believed to have been a cause of current mortgage rates.
- Per the latest CoreLogic Home Price Index, the current rate of 30-year, fixed-rate mortgages caused a homebuyer pullback and led to a 3% home price drop from June to July.
- According to CNBC, this drop in home prices is also causing a decline in homeowner wealth.
- Yahoo Finance has cautioned investors that Mortgage REITs could be a risky investment at the moment; Annaly Capital Management Inc. has a beta (risk level) of 1.21, higher than the average of 1.0.
- However, MBA Chief Economist Mike Fratantoni says that a strong job market could still lead to an increase in home purchases.
High prices aren’t always a good thing for sellers and investors. Current market conditions and mortgage rates are seeing buyers opting out entirely, experts are saying. To increase demand, prices might have to decrease. We’ll see if this market shift continues and what this means for buyers.