Home buyers are flooding the market and heating up the competition for new listings and offers. Multiple offers, offers at or above list price, and houses going in as little as a few hours from the listing. Its madness!! Read a small excerpt below for more information and remember to always give us a call before you go home shopping so youre ready to write on the spot in this buyer saturated market. 608-834-5000 According to mortgage origination software firm Ellie Mae, which handles more than 3 million mortgage applications per year, purchase mortgage closings grabbed an additional four percentage points in market share this past February as compared to the month prior, marking the eighth consecutive month during which purchase market share climbed. Purchase loans as a percentage of all closings have increased 25 percentage points in the past 12 months. There are several reasons why todays purchase loans are gaining market share. The first is that home prices have steadily and slowly climbed nationwide, which has created an urgency among todays U.S. buyers. Home values are up more than 10 percent annually in many U.S. cities going back to 2011, with values are up more than twenty percent in select cities including San Francisco, Los Angeles and Las Vegas. Home supplies remain tight, too. In February, for the 18th straight month, home supply was below 6.0 months nationwide. Supplies of less than six months suggest a Sellers Market, which is characterized by rising prices and multiple-offer situations. In addition to rising values, rising mortgage rates have contributed to an increase in purchase market share. Last year, Februarys mortgage rates hovered near 3.5% nationally. This year, theyre almost one point higher. The jump has reduced the number of refinance-eligible households nationwide, which has reduced the number of refinance closings. According to the Federal Home Finance Agency (FHFA), there was a 339% decrease in the number of closed refinances for the 12 months ending in January. However, refinance opportunities remain plentiful. With mortgage rates moored in the mid-4s, there are literally millions of U.S. homeowners eligible to refinance who have yet to get started despite the typical refinancing household saving than 25% monthly via a refinance. This includes homeowners using the Home Affordable Refinance Program (HARP) and other streamline refinance programs, too. Lastly, purchases may be outnumbering refinances because more purchase loans are making it through the underwriting process. In February, Ellie Mae reports that 62% of purchase loan applications made it through to closing, the highest rate since the firm began tracking such information in 2011. By contrast, just forty-seven percent of refinance applications actually closed.
Posted on: Wed, 09 Apr 2014 19:23:34 +0000
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