Mortgage News October 2018

MBA – The Mortgage Bankers Association reported that the applications to buy a new home declined by 2.1% in October 2018 in comparison to October 2017. Applications were also down 11% in comparison to September 2018. This study does not include any adjustments for seasonal patterns. Due to the survey results and other assumptions. MBA also estimates that new single family home sales were at 673,000 in October an increase of September sales rates by 4.7, which were totaling 643,000.



70.9% were conventional loan applications, FHA loans were at 17.1 percent, VA loans 11.2 and RHS/USDA applications were at about 0.7%. Average loan size descreased from $333,086 in September to $331,732 in October 2018. While there were some swings on yearly basis for a new home sales in 2018, the ytd sales pace is 7% higher than in 2017. On the other hand the average size of the loan application is on its lowest point since July 2017, this is normally a sign there has been some new inventory in the real estate sector and that the prices are getting stabilized.



With having mortgage rates on the rise and some prices of homes skyrocketing, a new time has emerged in mortgage lending, the time when aged assumption may no longer apply to mortgages. Rising of mortgage rates eliminate the ability of refinancing for many mortgage borrowers. There is also an affordability and inventory factor which are keeping this market from living up to its full potential and as the hosuing market keeps evolving, shifts in demand of mortgages will shape the winners and loosers in the industry.
The implications of these changes in loan demand go far beyond the bottom line for mortgage lenders and will influence as the direction as the size of several key components of the mortgage industry. Companies will seek to invest more heavily in technology to develop more efficient process and less bureaucracy to improve the borrower experience.



Given the size of role providers as Freddie Mac and Fannie Mae play in the mortgage industry sector, shifts in loan demand will in no doubt influence and recreate policymakers with the future of the government-sponsored companies.
Changes in the demand for loans (both purchase and refinance) can create a distinct outcomes for technology investment and innovation, industry employment and evolvement as for GSE reform. So in the upcoming years we can expect major changes in the mortgage process as well as the flexibility of loans provided.

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