30-Second Update: Mortgage Applications Surge, Rates Near Lowest Level in Two Years!

According to the Mortgage Bankers Association’s seasonally-adjusted index, mortgage applications surged 26.8% in the week ending June 7th.  In addition, overall mortgage volume was 41% higher than this time a year ago.  Mortgage rates, which have dropped to their lowest level in nearly 2 years helped propel the surge in applications and volume.  Refinances, which are the most rate-sensitive, jumped a remarkable 47% week-to-week and 97% annually.  Mortgage applications to purchase a home, which usually react slower to drops in rates, increased 10%. 

Overall, the current lower interest rate environment is having a tremendous positive impact on the housing market.   Freddie Mac Chief Economist Sam Khater stated, “These low rates are good news for current homeowners.  With rates dipping this low, there are over $2 trillion worth of outstanding mortgages eligible to be refinanced, meaning the majority of what was originated in 2018 is now eligible.”

Whether you are in the market for a new home or getting ready to refinance, this is a great time to start the process and see what you qualify for.  Call Advisors Mortgage today to see how we can help.

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Home Appreciation is Improving and Refi’s are Hot!

According to CoreLogic, since this time last year, home prices have increased by 3.6%!  Since last month, they have increased by 1%.  CoreLogic also forecasts that home prices will continue to appreciate by about 4.7% over the next year.

Dr. Frank Nothaft, Chief Economist for CoreLogic said, “The pickup in sales between March and April has helped to counter the recent slowing in annual home price growth.”  Dr. Nothaft also said, “Mortgage rates are 0.6% below what they were one year ago and incomes are up, which has improved affordability for buyers.”

With these appreciation improvements and low interest rates, it is clear that this is a great time to purchase a home.  Speaking of interest rates, the MBA released their application index, and it shows that refinances are up 6% for the week and 33% over the last year.  Refinances now make up about 42% of all mortgage applications.  With the latest decline in interest rates, many homeowners are taking advantage of the savings and refinancing their current loans.

Whether you are in the market for a new home or getting ready to refinance, this is a great time to start the process and see what you qualify for.  Call Advisors Mortgage today to see how we can help.

Source: CoreLogic


30-Second Update:  Rates Are Low, Can They Go Lower?

Earlier this month, the Federal Open Market Committee announced that no foreseeable moves to interest rates were expected “for some time.”  Markets have now reversed their position, however, and now believe the Federal Reserve will likely cut rates twice in upcoming months (possibly September and January 2020).  According to CME’s FedWatch tool, futures trading indicated a 63% chance of a September rate cut and a 62% probability of another rate cut in January.  Since 1983, the average length of time from a rate hike to the next rate cut has been seven months.   With the most recent tightening occurring back in December, a September cut would be ten months apart, putting us closely in line with historical averages. 

Even with two possible interest rate cuts on the horizon, as of the week ending May 23rd, mortgage rates have fallen for the fourth straight week.  This marks the lowest level since January 2018.  This low interest rate environment is proving to be extremely beneficial to those looking to purchase a new home, in addition to homeowners looking to refinance into a lower interest rate, or pull cash out for home improvement or debt consolidation. 



Loan Applications on the Rise and Home Sales Bouncing Back

The Mortgage Bankers Association released their weekly loan application report, and we see that while weekly purchase applications were slightly lower, they are up about 7% since this time last year.   Refinances are up about 8% for the week and 30% from a year ago.  Both of these readings are very favorable since they came from a week where interest rates ticked slightly higher.

Existing Homes Sales data was reported, showing that for the month of April there were 5.19 million homes sold across the nation. This came in slightly lower than last month’s number of 5.21 and about 4.4% lower than where we were this time last year.  When digging deeper into this report, we see that even though this number is slightly lower, it appears that the trend is improving.  Since the decline is lessening, this report actually points to a favorable trend and that more homes are beginning to sell.  This report serves as a good gauge of the housing market, since there are more existing homes than new homes.

With historically low rates, strong levels of demand, and forecasts of appreciation on the rise, we are seeing a lot of strength in the housing market.  It is a great time to purchase or refinance a home.


30-Second Update:  Home Builder Confidence hits Seven Month High

The latest National Association of Home Builders Housing Market Index, which measures builder’s confidence in newly built, single-family homes, rose three points to 66 in May.  This is the highest reading since October of 2018.  To keep things in perspective, any reading above 50 is considered positive.  This report is a direct reflection of strong reported home sales, allowing builders to be more optimistic about the housing market.   Economists use this index to gauge the status of the home building industry.  If builders are more confident in the housing market, they will be more likely to break ground on more houses, which would lead to more jobs and improve the economy as a whole.

Economists continue to cite the low interest rate environment, along with a strong labor market, and rising wages as key factors propelling the housing market.  Michael Murray, Chief Operating Officer of D.R. Horton stated, “We see that some of the demand that was displaced in the fall will probably elongate a selling season this year in the spring and into the early summer as those buyers have returned and more continue to come into the market, seeing it’s still a great time to buy a home.”   


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