Real Estate News

Can mortgage growth sustain through the rest of the year?

Published: 02 May 2017

While changes in mortgage applications can be hard to anticipate, it seems the month of May at least has some positive trends to work with. This is based on the update about the state of application rates for the date of April 21. That source found multiple changes to indicate growth, including upticks for the Market Composite Index and the refinance mortgage activity, which grew by 1.6 percent in just a week.

With this fresh in mind, the month of May 2017 seems to have promise. There's still time for the overall pattern for the year to conform to different expectations, which can make previous forecasts valuable in guessing the way forward and what might happen next.

In January, a Forbes article addressed this year's possible trends, including comments from various experts. One of these, Redfin chief economist Nela Richardson, said that mortgage rates will "bump around" after an initial increase following the election year. She also mentioned the discrepancy between costs and location that seems to be an issue.

"The irony of the modern housing market is that the places where we are seeing wage growth are places where people can't live because they are too un-affordable," Richardson said specifically. "There is a mismatch."

More recently, Bankrate also reported on the changes in mortgages, this time focusing on the way rates have gone up as of May 1. According to this source, the 15 and 30-year fixed-mortgage rates both grew within the span of a year, by 5 and 4 percent, respectively.

Compared to this, the 5/1 ARM rate also increased by 5 points within the same range. The average monthly payment for 15-year fixed mortgages was around $200 higher than the comparable rate for the 30-year option, although both grew.