Real Estate News

Mortgage Bankers Association shows April application drop after

Published: 17 May 2017

The Mortgage Bankers Association reported on both ups and downs for mortgage application rates this year. A release, most recently dated for May 10, said that the Market Composite Index grew 2.4 percent for the first week of May.

This statement also mentioned some upticks for other figures, including the Federal Housing Administration's percentage of total homes, which included a .1 percent rise. Mortgage activity refinancing also rose, these by .3 percent.

On the other hand, a more recent announcement from the same organization painted a general portrait of declining application rates, at least for April. In fact, the source said that the MBA estimated a 19.4 percent drop in the number of new homes sold between March and April, without seasonal adjustments. Approximately 68.5 percent of loan applications were for conventional ones, the release added.

The organization's Vice President of Research and Economics, Lynn Fisher, highlighted the main contrast between this year's April figures and the previous one's.

"For the first time this year, mortgage applications for new homes in April were lower than the same month a year ago," Fisher said. "Mortgage applications for new homes fell more than 20 percent in April after peaking in March, as they have the past 2 years."

Regardless of these trends, there's a possibility that changes in interest rates will be the dominant factor for the future housing market, at least for multifamily home sales, according to a Freddie Mac outlook statement from April 11.

This source said that the multifamily market could influence how market caps react. This is because the housing field has usually had this effect in the past. However, the statement also noted some uncertainty about the future, with rate changes shifting course and perhaps boding a gradual growth of cap rate change over the years.