Average purchase mortgage requests have shrunk -10% since March.

Average Purchase Mortgage Request Down to $413,000

Rising mortgage rates are hampering mortgage demand as well as mortgage loan sizes, according to a survey of lenders by the Mortgage Bankers Association (MBA). 

For the week ending June 24, the average purchase loan request was $413,500, down -10% from the record high in March of $460,000.

Since home price appreciation is slowing, NOT reversing in most markets, this drop in average purchase loan request could mirror a shift in who is looking to buy.

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Uptick in Demand for Government-Backed Loans

The MBA reported that demand for FHA, VA and USDA purchase loans picked up during the week ending June 24.  Applications for FHA-loans accounted for 12% of all mortgage requests.  VA-backed loans accounted for 11.2% of all loans and USDA loan requests accounted for 0.6% of all purchase applications.

The average loan request for these government-backed loans was $321,600.  Buyers seeking conventional, conforming loans via Fannie Mae and Freddie Mac requested larger loans averaging $441,500.

MBA forecaster Joel Kan said, “Overall purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices and growing economic uncertainty.  Purchase applications were essential flat last week but were supported by a +6% increase in government loans.”

Applications for FHA-loans accounted for 12% of all mortgage requests.  VA-backed loans accounted for 11.2% of all loans and USDA loan requests accounted for 0.6% of all purchase applications.

Overall Look at Loan Happenings During Week Ending June 24

  • 30-year fixed-rate conforming mortgages (loan balances of $647,200 or less) had average rates of 5.84%, down from 5.98% the week prior. With points decreasing to 0.64 from 0.77 for 80% LTV loans, the effective rate decreased to 6.02%
  • Rates for 30-year, fixed-rate jumbo mortgages (greater than $647,200) averaged 5.42%, down from 5.49% the prior week. Points decreased to 0.28 from 0.45 for 80% LTV made the effective rate decrease to 5.50%.
  • 30-year, fixed-rate FHA mortgage held steady at 5.62%. The effective rate decreased to 5.95% as points decreased to 1.15 from 1.16 for 80% LTV loans.
  • Rates for 15-year fixed-rate mortgages (popular with borrowers refinancing existing loans) averaged 5.06%. With points dropping from 0.86 to 0.72, the effective rate went down to 5.24%
  • Rates averaged 4.64% for 5/1 adjustable-rate mortgages (ARMs), down from 4.78% the week prior. With points decreasing to 0.72 from 0.84, the effective rate decreased to 4.91%.

Thanks to the Mortgage Bankers Association and Inman.

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