Salt Lake City Market Update, first week of March
Gorgeous Sandy Home
Price: $299,900
Bedrooms: 5
Bathrooms: 2 Full, 2 Partial
Garage: 2
Square Feet: 3,102
MBA: Mortgage loan applications increase 2.7%
The number of mortgage applications last week rose 2.7% on a seasonally adjusted basis from the prior week, once again pushed up by refinancing activity that remains at the highest level since May 2009, according to the Mortgage Bankers Association.
The MBA said the index rose 2.3% on an unadjusted basis. The seasonally adjusted refinance index climbed 2.8% for the week ended Aug. 27 from the week earlier. The purchase index rose 1.8% for the week.
“Refinancing activity picked up again last week, reaching new 15-month highs, as borrowers took advantage of even lower mortgage rates,” MBA vice president of research and economics Michael Fratantoni said. “The drop in mortgage rates was in line with Treasury rates as the latest data continue to show weak economic growth and an exceptionally weak housing market.”
In four-week moving averages, the seasonally adjusted market index is up 5.2%, the purchase index is down 0.2% and the refinance index is up 6.3%.
Fratantoni said the sharp decline in the firm’s purchase application index in May foreshadowed the drops in home sales the following two months, and he doesn’t expect sales activity to increase for August or September.
Refinancings accounted for 82.9% of all mortgage applications last week, up from 82.4% the week prior and at the highest level since January 2009. MBA said the unadjusted purchase index decreased 0.4% from the prior week and is 37% lower than the year ago.
Interest rates for 30-year fixed and 15-year fixed mortgages continue descending to the lowest rates ever recorded by the MBA survey. The average rate for the 30-year fell to 4.43% from 4.55% and the 15-year decreased to 3.88% from 3.91%.
The Mortgage Maxx weekly index, which adjusts data to reflect the number of households applying for a mortgage, showed application activity rose 6.9% last week after dropping 2.4% the week before.
What is going on with the Salt Lake Real Estate Market?
I have not seen it this slow in the 7 years. Right now showings are slow…very slow. Prices are very attractive and interest rates are crazy low. So where are all of the buyers? Most of my buyers need to sell first and that has been the problem. Prices will need to come down a little more to intice buyers. We will keep you posted.
Mortgage Rates Drop Below 4% on 15-Year Loans
Washington
A plunge in mortgage rates is giving homeowners a rare opportunity to lock in a 15-year fixed-rate loan for less than 4 percent.
Rates haven’t dipped this low in decades. For those who can qualify, it is the chance to pay off a home in half the time while saving tens of thousands of dollars — if not more.
But the lower rates on short-term loans are not likely to ignite the refinancing market. Most people can’t afford the higher monthly payments required by a 15-year fixed mortgage compared with a more traditional 30-year loan.
“That’s not what most people need right now. They need lower payments,” said Leif Thomsen, CEO of Walpole, Mass.-based lender Mortgage Master Inc.
High unemployment, slow job growth and tight credit have hampered the housing industry. And fewer people are also in position to refinance, because low real estate prices have left many with little equity in their homes. Many people who would qualify have already refinanced in the past year.
The average rate on the 15-year fixed loan dropped to 3.95 percent last week, according to mortgage company Freddie Mac. That is the lowest on records the company has kept since 1991. The average rate for a 30-year fixed loan fell to 4.49 percent. Rates haven’t been that low since the 1950s, when longer-term mortgages typically lasted 20 to 25 years.
There might not seem to be a huge difference in the two rates, both of which are historically low. But consider the savings on a $200,000 mortgage over 15 years at the current rates.
A borrower who refinances over that term could expect to save $65,000 in interest compared with the 30-year fixed loan. Still, they would pay $1,474 a month before taxes and insurance. With the 30-year loan, the payments would be $1,010 a month.
Rates on five-year adjustable-rate mortgages averaged 3.63 percent, down from 3.76 percent a week earlier.
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